Over the past two decades, there has been halting progress on narrowing the gender pay gap: As of 2024, women still make about 84 cents for every dollar that men earn, a marginal change from the 80 cents to the dollar that women earned back in 2002. Even as women have made inroads in corporate America and across sectors that were historically dominated by men, pay equity has remained stubbornly out of reach.
According to new research, that isn’t likely to change anytime soon. In a paper by the Centre for Economic Policy Research (CEPR), a group of economists found that in the U.S. and other high-income nations—namely Canada, Italy, and the United Kingdom—the narrowing of the pay gap can largely be attributed to people entering and exiting the workforce. Their findings don’t bode well for efforts to eradicate the pay gap. “We project that the gender pay gap will not disappear in the high-income countries in our study,” the authors wrote.
How the pay gap has narrowed
Their findings indicate that between the 1970s and early aughts, the headway in closing the gender pay gap could actually be attributed to new workers entering the labor market and young men earning less, on average, than they had in previous years. In the U.S., the average 25-year-old male worker dropped from the 50th percentile of wage distribution in 1976 to the 39th percentile in 1995. Women of the same age didn’t see significant gains, moving from the 31st percentile in 1976 to the 32nd percentile in 1995.
What little change has happened in the past two decades has, for the most part, been due to older generations retiring and leaving the workforce, according to the CEPR paper. That’s because older workers were, on average, more likely to have wider pay gaps between men and women. The choice of college major also seems to have a bearing on entry-level pay disparities between men and women, despite the fact that women make up a greater share of the college-educated labor force: About 63% of the pay gap for college graduates entering the workforce can be explained by differences in degrees. (While many women in the workforce are highly educated, the pay gap between college-educated workers is not any narrower than the gap between those who lack college degrees.)
Why pay disparities persist
Experts have put forth several theories for why this progress has stagnated—and why the pay gap actually increases as women get older. A Pew analysis from 2023 suggests that becoming parents can have a major impact on women’s earnings potential, while men are more likely to remain in the labor force and even see a pay bump as a result of having children.
Women are more likely to be pushed into certain jobs; while female representation in STEM and other high-paying industries has increased, women are still underrepresented in those jobs—not to mention management roles—on the whole. They’re also more likely to face discrimination and other barriers to progressing in the workplace, and the pay gap is even wider for women of color.
That’s not to say that women can’t achieve greater pay equity in the workplace: The CEPR researchers posit that the pay gap could still be minimized, especially when it comes to workers who are later in their career. Many companies now conduct regular pay equity audits to help address potential gender-based disparities, while some have embraced pay transparency. Employers have expanded parental leave benefits and childcare subsidies to help mitigate the disproportionate impact of having children on women’s careers. Even as companies double down on return-to-office policies, there are plenty of leaders who continue to see the value in allowing remote work, which can help give working mothers the flexibility they so often need to fully participate in the workforce.