Gender Pay Gap in France

INTRODUCTION

            Attention on the economic position of women has presided over numerous publications on social analysis. According to Persson (1998), in the nineteenth century it was part of the movement towards the emancipation of women, and discussion and analysis focused on the sexual division of labour in society and the very different roles assigned to men and women. As time progressed, more and more women did enter the labour market. The extreme form of sexual division where women were responsible for housework and men for market work gradually lost favour in industrial societies. While the number and percentage of women who work for pay have been increasing for over a hundred years, this phenomenon accelerated greatly after World War II (Headlee & Elfin 1996). The innovations of the 20th century also have brought about huge economic and social changes. Industrialization, urbanization, and more recently, globalization of the economy have transformed countries from an agrarian, primary sector economy, to one that is service-oriented and technology-driven. As women entered the labour market in growing numbers, it became evident that their place was not the same as that of men. And when it did coincide, the pay was not the same.

It is not surprising then that the wage gap in pay between men and women has been a central, recurrent topic for empirical investigation and theorizing by economists and sociologists. Early nineteenth century research focused on this new, emerging form of gender division of labour, and economists and sociologists, both male and female, analysed and discussed the patterns and causes of occupational segregation by sex and the role that discrimination and segregation played in the women’s comparatively lower pay (Persoon 1998). The two disciplines offer divergent interpretations of the phenomenon. Most labour economists, while recognising the possibility of sex discrimination in pay argue that whatever gender inequality exists reflects differences in choices men and women make about investment in human capital, occupational selection, and labour force participation, and the rational responses of employers to labour market conditions. This paper discusses the prevailing gender pay gap in France and looks into its causes.

THE FRENCH LANDSCAPE

            It is often regarded as something of a paradox that the marked decreases in the sex differentials in labour force participation rates and wage rates that have taken place in industrialised countries over the last few decades have not been accompanied by corresponding decreases in the occupational segregation by sex in the labour market. The situation in France underlines the previous statement and provides one clear case in point. Gender inequalities in France are substantial even though not dramatic by international standards. France constitutionally recognises the principle of gender equality in the preamble to the 1946 Constitution: ‘the law guarantees to women in all fields, rights equal to those of men’ (Stevens 2003). In more detail, Stevens noted that Articles L.140.2 and after in the Labour Code state that ‘every employer is obliged to ensure that payment for identical work, or for work with identical value is equal for both men and women’, with ‘payment’ meaning ‘wage or basic or minimum pay, and all the other benefits paid, whether directly or indirectly […] by the employer due to the employee’s occupation’ (2003:244). Work requiring a comparable set of the following is considered as having equal value: Professional knowledge formalized by a diploma, degree or professional experience; skills stemming from experience acquired; responsibilities; and physical and mental workload.

But although collective agreements and minimum wage laws are in principle gender-neutral, women still end up earning less than men, and this has been the case for most of recorded history. The gender pay gap in the labour market has always meant that wage differentials have favoured men. However, the increasing similarity between the patterns of women’s and men’s working lives (the drop in the amount of breaks for childbirth, etc.) and the rise in women’s qualification levels have, in recent years, altered the respective positions of men and women in the labour market. However, despite all this, the gender pay gap in France has not altered accordingly and is still present. The overall level of the pay gap is stable: it has not diminished over the past few years. News in France still contains issues that male-female inequalities are persisting in the French labour market attesting to the continuing concern in France about gender wage inequality. That gender inequality in general remains a problem for France is further documented by the United Nation’s most recent Gender-related development index, where France ranks 17th, behind many of its continental neighbours, the U.S., the U.K. and Australia (as cited in Meurs & Meng 2004). In general terms, the discrepancy in pay between women and men in France stood at around 25% in 1998 (Altonji & Blank 1999). The gap, if it is calculated on the basis of all wages taken together, i.e. from both full and part-time work, remained stable during the 90s. More particularly, in terms of full-time wages, the gender pay gap shrank in the 90’s (Meurs & Meng 2004).

The examination of the gender pay gap in France and its persistence in recent years underlines the high concentration of women in part-time work. Two trends marked the 1990s: the rapid growth of part-time work, and its feminisation. This increase in part-time work has been put up with by women workers rather than sought for, and is basically a case of people ‘making do’ with part-time jobs (Altonji & Blank 1999). When analysing the gender pay gap, the fact that women do not have the same types of job as men, do not work in the same sectors, and do not work in the same professions as men should not been under-estimated. Occupational segregation is still a reality, and the impact of this ‘sectoral’ and structural difference can explain almost 50% of the gender pay gap (Meurs & Meng 2004). A history of occupational segregation by gender and the associated salary inequities has been well documented. Research by economists and sociologists has revealed that the wage differential between men and women is only partially explained by the characteristics of the worker (such as education level) or the job (England 1992; Gibelman & Schervish 1997). The wages of French women over the past twenty years have shown some convergence and some divergence: convergence with men's wages and divergence as the gap between the best and worst paid women has widened. According to Johnson & Stafford (as cited in Persson 1998), the potential reasons why men and women have different occupational distributions are: (1) direct employer discrimination against women in certain jobs; (2) institutional discrimination (legal or otherwise) that restricts women from working in ‘non-traditional’ jobs; (3) women’s non-pecuniary preferences regarding different occupations; and (4) their relative abilities in different jobs as compared to men.

The most recent econometric study of the gender pay gap (using the Blinder/Oaxaca decomposition technique) also shows that out of a total gap of 25.4% (2002 employment survey), working time is the biggest determinant (12% of the gap); job characteristics (8%); whereas human capital plays a negative role in France (i.e. it has become a positive factor for women), but only at the level of 1.4% (Meurs and Ponthieux 2005). The gender pay gap therefore ranks rather high on the policy agenda. In order to close the gender pay gap, a new draft law on equal pay earlier this year is in the process of being drawn up (Silvera 2006). In this draft law there is the provision to make collective bargaining compulsory, in order to abolish pay gaps by December 2010. In conjunction with this drafted law, France have already made it compulsory to negotiate equality in companies and sectors and to introduce the issue of equality in all normal bargaining topics, including pay. However, only few (around 50) companies respected this obligation. The new draft law contains four main themes, of which the abolition of the gender pay gap is the most important. The French case is a clear example of legislation which imposes on employers the obligation to justify pay differentials.

DIFFERENCES IN HOURLY WAGES

            In a market economy, the rate of pay per hour puts a price on people’s time (Joshi & Paci 1998). If the market in human time is operating neutrally and efficiently, it will pay the same rate to persons of equal skills and productivity in equally desirable jobs, and is generally considered fair. Wages will differ as do the skills they offer, but they can also vary for a host of other reasons. Higher pay for men than women is just one of the many ways in which wage rates have often been observed to differ. This gap in the price of time for men compared to women determines not only who waits for whom, but has enormous consequences for their respective incomes, for which parent takes time off work to look after children, for the domestic division of labour, for the incentive to women to get educated, for their financial independence on the family, and for their vulnerability to the risk of poverty. Joshi & Paci (1998) also argued that the differential wages of men and women are a consequence of the different ways that they typically allocate their time over the life cycle. Women take the brunt of the domestic burden because they face low wages. Women face low wages because many of them choose not to commit themselves wholeheartedly to the labour force. These mechanisms may work both ways. Below is a table presenting the French male-female hourly wage differences by various categories such as private, public, full-time, part-time, outsourcing, apprenticeship, internship, manager and professional, semi-professional, clerk and labourer [1].

In the above table, it is evident that job segregation is likely to have a major impact on the gender wage gap. Indeed, the male/female ratio of hourly wages increases as one goes down the hierarchical scale. This appears to favour women as far as labourers are concerned. More generally, gender differences in monthly average wages amount to 134.1%. However, once one controls for the working hours, the gender gap decreases to 115%. The biggest gender gap occurs among private, long-term employees with men earning on average 121% more than women.

CAUSES OF GENDER PAY GAP

According to Weichselbaumer & Winter-Ebmer (2005), to take into account differences in working hours and the impact of the income tax system, most estimates are based on differences in gross hourly wages. The gender pay gap is then calculated as the ratio of women’s average gross hourly wage to men’s average gross hourly wage, or as the difference between men’s and women’s gross hourly wage as a percentage of men’s average gross hourly wage. Yet estimates of the gender pay gap differ widely, depending on the data available, the specific sample, and the method used. As a consequence, there is wide variation in results over time, between countries and even among studies for a particular country.

Numerous studies have been conducted to explain the pay gap, often based on one or a combination of economic theories. Results vary, but none can account for the entire difference in the average earnings of women and men. The most common economic theory concerning the reasons for the pay gap is the theories of human capital (Hughes 1996). Human capital theory attributes income differences to variations in education, experience and commitment to the labour force. Evidence suggests, however, that these differences only play a minor role in the persistence of the gender pay gap. The improved educational situation and the increased female participation rate have diminished gender specific differences in individual characteristics, although in some countries gender differences in experience still play a role. Instead, the gender pay gap seems more related to the level of occupational segregation and the wage structure. Women tend to work in different occupations and industries than men and are penalized because of that. The extent of the penalty may differ, though, depending on the wage structure; a more compressed wage structure is likely to diminish the gender pay gap. This implies that in order to reduce the gender pay gap not only differences in activity and employment rates need to be addressed, but also differences in the wage structure and differences in the remuneration between men and women.

It is important to note that this theoretical model exclude discrimination. The part of the gender pay gap that can not be attributed to differences in human capital or job characteristics may be the result of discrimination, an incomplete listing of the relevant explanatory variables, or both (Blau & Kahn 2000; Rice 1999; Rubery, Grimshaw & Figueiredo 2002). The persistence of the pay gap is likely due to a variety of factors. Inequality in the workplace is founded on social inequality. Although women have always worked, their work has traditionally been afforded less market value than men's. When women began entering the labour force, they were directed toward jobs which replicated their work in the home. This led to a devaluation of their capacity as workers, since qualities relating to their job performance were often presumed to be a result of ‘natural’ ability rather than skill. This presumption of inherent ability or talent came to affect the way jobs were evaluated when pay equity legislation and policy were developed. Additionally, the gender pay gap cannot be only explained by gender differences in average human capital characteristics, occupational segregation and direct discrimination by employers, but also by the under-valuation of women's work in

female-dominated occupations and industries as well (Meurs & Ponthieux 2005).

             The gender pay gap may also be related to the overall structure of wages, that is ‘the array of prices determined for labour market skills and the rewards to employment in particular sectors’ (Blau & Kahn 2000). Especially following the work of Juhn, Murphy & Pierce (1991) on trends in race differentials, the gender pay gap has been analysed within the context of the overall structure of wages. The logic behind this is rather straightforward. Since women, on average, tend to have less labour market experience than men and work in different occupations, the gender pay gap will increase if the return to experience will increase or if the occupational wage differences will increase. The same reasoning applies when the gender pay gap is compared between countries; countries with a relative high rewards to skills and experience and a relative large wage dispersion will tend to have larger gender pay gaps – all else equal. As quoted from Blau and Kahn (2000:81):

“If, as the human capital model suggests, women have less experience than men, on average, the higher the return to experience received by workers regardless of sex, the larger will be the gender gap in pay. Similarly, if women tend to work in different occupations and industries than men, perhaps due to discrimination or other factors, the higher the premium received by workers, both male and female, for working in the male sector, the larger will be the gender pay gap”.

CONCLUSION

            Differences in the rate of pay received by men and women are important from the points of view of the functioning of the economy and of fairness – efficiency as well as equity (Joshi & Paci 1998). Equity within the labour market would entail that equally productive workers (assuming equally desirable jobs) receive equal pay, irrespective of gender, race or age. The efficient allocation of resources requires that workers receive a wage equal to their value product, at the margin. For the labour market to operate efficiently, equally productive workers (with the same preference) should receive equal pay. If they do not, it will, among other things, reinforce differences in the time each group allocates to paid and unpaid work, to acquiring skills and building up human capital. Low returns on the latter for women may well inhibit the development of their full potential to contribute to the economy. As argued by England (1992), lower wages for women have grave consequences. The ability of the growing number of single and divorced women to support themselves and their children hinges on progress in women's earnings. Sociological evidence also shows that women's earnings affect their marital power. Low wages for women reinforce the patriarchal nature of the family; raising women's wages would promote egalitarian marriages.

            France, in their drive to close the pay gender gap in their country, enlisted the involvement of trade unions in this end. To date, according to Silvera (2006) a national inter-sector agreement on gender balance and occupational gender equality was signed on 1 March 2004 by all major unions. It includes a section on equal pay. Companies committed themselves to reducing the residual gap (estimated at 5% by INSEE), which cannot be explained by sectoral or structural effects. Specific action, in order to catch up gradually within time limits, can be embarked upon. At sector level, criteria used for job evaluation will be examined in order to rectify any discriminatory effects and take better account of all skills. Solutions will be sought to limit the effects on pay of absences related to parenthood.

The persistence of the gender pay gap emphasizes the need for multi-faceted policies targeted both on increasing the female labour market participation rate as well as on institutional factors such as wage formation systems and the overall level of wage inequality. This is one of France’s major priorities in the formulation of its laws nowadays. The studies which have shown that one of the leading issues in France is the gender pay disparity is now being effectively remedied by the government, in order to promote for better working conditions for the people of their country, regardless of gender.

References:
This paper contains references. It has been omitted to prevent this paper from being copied.
Our samples are meant to show you the way we write, so that if you order from us, you will know the quality of your paper.
  Order now, we’ll send your paper on your due date.
Email Vic at ivythesis@yahoo.com today.