Read The Times Australia

Daily Bulletin

How skills and personality traits contribute to the gender pay gap

  • Written by: Anita Staneva, Post Doctoral Research Fellow, University of Sydney
image

The gender pay gap in Australia currently stands at 15.3%, but this number hides other differences in how men and women are paid. It is important to note that the gender wage gap varies by income level. At higher income levels women earn up to 23% less than men, but the gap is negligible at lower income levels.

Our recent research looked at the effect of different psychological traits (e.g. extraversion) and cognitive skills (e.g. working memory) in explaining the gender pay gap in Australia, and found significant differences in how men and women are rewarded or penalised.

Women on high incomes, for example, see a larger benefit for their word-reading ability skills than men. But all women are penalised for being “agreeable” when men aren’t. The differences in how these attributes are treated lead to men and women making different career choices, which also has an impact on income.

Our study looked at data on word-reading, working memory and matching symbols tests (cognitive skills); as well as conscientiousness, openness to experience, agreeableness, extroversion and emotional stability (psychological traits) from the Household, Income and Labour Dynamics in Australia survey (HILDA).

The working memory task asked participants to repeat in reverse order long strings of single-digit numbers. Matching symbols involved participants matching symbols to numbers within 90 seconds, and word-reading saw participants read 50 irregularly spelled words, listed in order of difficulty.

The psychological traits were tested with a self assessment, asking respondents to assess the degree to which the trait describes them, from “Does not describe me at all” to “Describes me very well”.

Of the psychological traits we studied, conscientiousness and agreeableness had the greater influence on the gender wage gap. On average, men are rewarded more for being more conscientious than women are. Women are penalised more for being agreeable than men.

While there aren’t significant differences in cognitive skill levels between the genders, women are rewarded more for them than men. Our study suggests that when it comes to national word-reading test, which is intended to provide an estimate of premorbid intelligence, women at higher income levels receive a significantly higher reward. Specifically, scoring higher in the word-reading task, higher income women receive an 8% wage benefit, while men only receive a 5% benefit.

Conscientiousness is positive for both men and women. Individuals who possess this trait are often characterised as hardworking, productive, punctual, organised and accepting of responsibility. The results for conscientiousness indicate a wage premium of more than 5% for men and about 3% for women at the bottom end of income levels. However, women on high incomes gain a slight wage advantage.

People who are highly agreeable are often labelled as compassionate, polite and kind, which may seem advantageous to the career success. Women who are highly agreeable, however, received a wage penalty. This was especially prominent for women on high incomes. The impact on men of appearing agreeable was insignificant, giving them a significant wage advantage.

While this finding may seem puzzling at first glance, more agreeable women may be too passive in conflict situations, poor wage negotiators, or simply sort into the lower paying occupations.

Finally, we found that both cognitive skills and psychological traits have a significant predictive relationship to career choices.

Men and women with similar attributes enter different occupations at very different rates. Greater extroversion (i.e. being sociable, outgoing but also dominant and ambitious) is associated with a higher likelihood that men are employed as managers or service sector workers, while for women the effect of this trait is insignificant across most occupations.

There are some straightforward policy implications from this analysis. Understanding the underlying sources of the gender differences in pay means some of the gap can be reduced by considering personality and cognitive attributes. For example, we could invest in programs aimed at improving non-cognitive skills among women - where the biggest differences are.

Research suggests that gains would be greater from investing in programs in early childhood. One study followed people from a preschool program and showed that programs to boost character skills translated into success in adulthood.

Authors: Anita Staneva, Post Doctoral Research Fellow, University of Sydney

Read more http://theconversation.com/how-skills-and-personality-traits-contribute-to-the-gender-pay-gap-81684

Business News

The Rise of Digital Marketplaces in the Australian Trade Sector

For decades, the Australian trade and construction sector operated almost entirely on word-of-mouth recommendations and local community networks. Small business owners typically relied on local newspa...

Daily Bulletin - avatar Daily Bulletin

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

How to Transform Your Daily Work Ute Into a Weekend Touring Rig

In 2025, Australians purchased a record 1.24 million new vehicles, with the Ford Ranger and Toyota...

Why Dental Tourism in Mumbai is the Smart Choice

Dental tourism in Mumbai is gaining more attention in recent times. Mumbai is not only the financi...

South African Consular Services Expand to Six Australian Cities

South Africans living in Adelaide, Brisbane and Canberra will now be able to access passport, identi...

How Long Does a Solar Home Battery Last? LFP Cycles and Warranty Explained

A battery does not usually reach its advertised cycle count and suddenly stop working. Capacity ch...

How to Hire a Nanny: A Complete Guide for Families

Finding the right childcare professional can make everyday family life easier and give parents gre...

The Blue-Collar Shortage Employers Can't Solve With More Applicants

Australia's hiring market has cooled considerably since the post-pandemic frenzy of 2021 and 2022. F...

The Playground as Classroom: How Line Markings Are Reinforcing What Students Learn Inside

For a long time, the playground was treated as a break from learning rather than part of it. A place...

How Technology Is Changing the Way Gardens Are Maintained

Garden maintenance has always been a hands on ritual. Mowing on a schedule, watering by instinct, an...

One Blocked Drain Can Become a Whole House Plumbing Problem: How It Happens

A blocked hand basin feels local. So does a slow shower. Homeowners naturally focus on the fixture...