Gender Differences in the Labor Market: Wages and Employment Polarization
Author: Hadas Fuchs Policy Research

This chapter examines the determinants of the gender wage gap, looking at a number of factors, and finds that most of the wage gap between men and women can be explained by the personal and demographic characteristics of male and female workers.

This chapter examines the determinants of the gender wage gap based on individual and demographic characteristics of workers – including the use of a unique database that includes bagrut and psychometric scores, which serve to a certain extent as an indicator of each worker’s qualifications. In general, Israel’s labor market is becoming more equal from a gender perspective. Women’s employment rates continue to rise, and Jewish women have nearly reached the same employment rates as Jewish men. In addition, the wage gap has been decreasing. The gross wage gap was 39% in 2014 – a gap mostly explained by the different characteristics of female and male workers in the labor market. After controlling for different variables, especially the differences in working hours and choice of occupations between the genders, the wage gap dropped to 13%.

Most of the wage gap is explained by the different characteristics of men and women in the labor market. The most influential factor in explaining the gap is the disparity in working hours between men and women, followed by differences in occupation choice between the genders. While the wage gap is almost nonexistent in the field of education, in industries such as medicine and engineering, the gender wage gap is higher than 20 percent. In other words, although it seems that gender wage gaps exist in at least some occupations, most of the wage gap is related to differences in the number of working hours and in differences in the occupation pursued (which begins to take shape at an early age).

Achievement in mathematical subjects, where men have a large advantage, also has an impact on the wage gap. The lower achievements of women in math and science extend back as far as high school with fewer girls taking high level bagrut exams in math and science and continuing on to academic studies and work in these fields. Although the share of women in academia is overall higher than men, the share of female students in the technology fields has not changed over the years and stands at only 20%-30%. The study found that there is a majority of male workers in the technological fields, which are the most profitable, and even among female graduates with a degree in computer science, there was a drop in those actually working in the field.

This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2016edited by Prof. Avi Weiss.