Professor Astrid Kunze at NHH Norwegian School of Economics: “Here Are 5 Things We Need To Do To Close The Gender Wage Gap”
Listening to young people. Communicating with students and young people fresh into the workforce must be a two-way street. Those with more influence and experience should offer motivation and advice, while also keeping a keen ear out for ways that systems and hierarchies can be improved.
As part of my series about “The five things we need to do to close the gender wage gap,” I had the pleasure of interviewing Astrid Kunze, Professor of Economics at NHH Norwegian School of Economics. She has conducted research on how public policies affect women’s labour market performance. She is a contributor to the Handbook on Women and the Economy, published with Oxford University Press in 2018. In 2020, she received a 6-year grant from the Norwegian Research Council for her project on “challenges to shaping an inclusive work-life in rapidly changing labour markets.”
“Labour markets are gender segregated. Even though patterns of employment are changing, men are overrepresented in high-paying jobs in the tech sector and many STEM fields. Women, by contrast, are overrepresented in the caring sector and education, both of which tend to be lower-paying roles.”
Thank you so much for joining us in this interview series! Can you tell us the ‘backstory’ that brought you to this career path?
After finishing school, I didn’t have an academic career in mind. Instead, I did an elite traineeship at Bayer AG — the German multinational pharmaceutical and biotechnology company. The training programme was a mix of practical experiences and university-level courses which sparked my interest in working with empirical data.
After completing the apprenticeship and trainee programmes, I decided I wanted to apply my interest in empirical data to studying economics. I embarked on a Master’s degree at Bielefeld University, during which time I aspired to work for a prominent think tank. It was after that, while I was studying for my PhD at University College London (UCL), that I first came into contact with economic and labour market issues relating to the gender gap. This has since shaped the type of questions I’m interested in highlighting in my research.
Can you share the most interesting story that happened to you since you began this career?
Looking back, it’s interesting that one reason why I left the corporate world was because I felt it was very male-dominated. During my three years at Bayer AG, I observed that most managers were men, and several of them had a doctoral degree. Now that I’m in academia, I find myself in another, perhaps even more, male-dominated profession, given that my chosen area of study is economics. Comparing my perceptions of the corporate and academic worlds, I believe the former is currently ahead when it comes to diversity and inclusion policies.
Ok let’s jump to the main focus of our interview. Even in 2023, women still earn about 81 cents for every dollar a man makes. Can you explain three of the main factors that are causing the wage gap?
Labour markets are gender segregated. Even though patterns of employment are changing, men are overrepresented in high-paying jobs in the tech sector and many STEM fields. Women, by contrast, are overrepresented in the caring sector and education, both of which tend to be lower-paying roles.
Women are also more likely to be part-time workers. Usually, they switch from full-time work to part-time when they start having children. This coincides with the period where we observe women’s earnings drop, often to a large extent. This trend has not been observed among men.
However, even within the same industries and companies, the gender gap is especially pronounced when we look at the highest-earning positions. This phenomenon is referred to as the ‘glass ceiling’. For instance, only around seven percent of CEOs at the largest corporations in the US, UK, and Norway are women.
To note, there are two important factors which used to contribute to women earning less, but they have grown less relevant or even been reversed. One is that women used to have less access to higher education than men. This has now been flipped in several countries, with more women attending universities than men. The second is that women used to have less work experience than men, but today this has largely evened out.
Can you share with our readers what your work is doing to help close the gender wage gap?
One of the main goals of my research is to understand the causes behind the gender pay gap, and which policies can effectively reduce it.
In several studies, I have analysed data on the complete employment and wage histories of women in Germany and Norway. These studies suggest that even though when men and women first enter the labour market, gender wage gaps are small, it begins to widen early on.
One of the studies conducted in Germany revealed that right before the birth of a first child, women’s wages experience a dip which might show they already start forgoing promotions. After giving birth, we found women return to work on lower wages.
This wage decrease after giving birth is smaller when we consider the average woman, not just those who are returning to full-time employment. The drop is also more significant for women in high-skilled employment than for those in low-skilled employment. This suggests planning one’s career well into the future is extremely important.
I have also studied career progression and hierarchies in firms, and whether women receiving promotions into managerial and leadership positions could help close the gender gap. We show that a gender promotion gap exists at all levels of the corporate ladder, not just at the top of these hierarchies.
This can be improved by increasing the proportion of female bosses across all levels of management, as we find it reduces the gender gap in promotions. This suggests that organisations may be able to encourage women into the career pipeline by maintaining a good gender balance in management.
Can you recommend 5 things that need to be done on a broader societal level to close the gender wage gap. Please share a story or example for each.
First, the policy aspect. I think we need to talk about developing anti-discrimination laws and parental leave policies that protect women against unequal pay and offer wage-related financial benefits. As a side note, this should also be extended to cover workers from minority communities.
Second, career planning. We should talk more about our incomes. Many parents make use of parental leave policies, but I think there is not enough discussion or serious planning that goes on between them and their employers about what happens afterwards. Children have significant care needs long after parental leave is over, so careers must be planned with children in mind. I think the EU directive on wage transparency points us in the right direction.
Third, showing young people their options. Firms and universities should go into schools far more frequently and explain to pupils — both boys and girls alike — what occupations and careers are available to them. This is a wonderful opportunity to motivate these young people and show they are valued members of their society.
Fourth, listening to young people. Communicating with students and young people fresh into the workforce must be a two-way street. Those with more influence and experience should offer motivation and advice, while also keeping a keen ear out for ways that systems and hierarchies can be improved.
Fifth, education. Firms and universities must take diversity and inclusion seriously. Many already do, but there is still room for progress. For instance, economists are often consulted for advice when it comes to investing and purchasing stocks. This same level of expertise exists in the field of diversity, inclusion, and equality. Universities need to do more to produce and disseminate this information, and corporations should be more active in consulting experts.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My quote is “Women helping women”.
I’ve co-authored research which shows that the promotion probability of women relative to men in private firms increases if the share of female bosses increases. This is a great example of “women helping women”, a result which is consistent with the possibility that female bosses may be better or important mentors for women. I think this is a compelling finding.
Looking back at my career, I had several mentors or sponsors, both men and women, who gave me support and were an important factor in decisions I made. I was lucky to meet several great people during my studies and early career, with whom I am still in close contact.
This was very meaningful, thank you so much. We wish you only continued success on your great work!
