NEWS & INSIGHT
NEW STUDY FINDS THAT PAY DISCRIMINATION LEADS WOMEN TO CHOOSE TO WORK LESS SCHOOL : Aarhus School of Business and Social Sciences (Aarhus BSS), Aarhus University COUNTRY : Denmark
Women may be working less than their male counterparts because they are demotivated by their knowledge of salary discrimination, according to a new take on the gender pay gap from Aarhus BSS. “There is a psychological effect here that might be overlooked,” suggested Aarhus BSS assistant professor Nickolas Gagnon. “A major factor accounting for the fact that women earn less than men is that they work less due to reduced hours, maternity leave and so on, but our findings indicate that this may partly be a vicious cycle that needs to be broken.” The comments relate to a study exploring the effects of paying women and men different rates for the same work. Together with researchers at Maastricht University, Gagnon used an online data-collecting platform to ‘hire’ 4,000 workers in the UK for a basic clerical task. Workers were then divided into pairs and assigned wages, with pairs paid the same as each other in some cases and different rates in others. In all cases, they were told how much their paired participants were being paid, however where there was a salary discrepancy only some were told it was because of their gender.
The results showed a 14 per cent decrease in how much participants were willing to work; in other words, their labour supply, among those who knew they were paid less for reasons of gender, compared to those paid equally. Labour supply was also down 10 per cent when comparing those paid less because of their gender compared to those who were paid less and simply not told why. Women reacted much more negatively to being discriminated against than men, with their labour supply dropping by 20 per cent when they knew their pay was less because of their gender, compared to working under an equal pay regime. “Our studies show that gender discrimination leads workers to reduce how much work we supply,” Gagnon concluded. “Workers cannot punish their employer by changing their labour supply, so they work less even though they end up financially hurting themselves.” TBD
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Ambition • ISSUE 3 • 2025 11
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