Gender Wage Gaps in Israel

Abstract

Israel’s gender wage gap is substantially larger than the OECD average, and it has been trending upward over the past decade. This study finds that the gender gap in monthly wages of employees at the outset of their careers, a stage when people are also forming and expanding their families, reaches 33%. The lion’s share of this disparity can be attributed to family attributes. Marriage and the birth of children greatly widen the gender wage gap, as they reinforce the tendency toward specialisation within the household, with the mother taking more responsibility for housework and most of the breadwinning burden falling on the father. Consequently, women tend to choose employment that is less remunerative but more conducive to integrating career and family life – a choice that may also impact earlier decisions on fields of study in school, which then limit career options downstream. A relatively small share of the disparity, 4.5 percentage points, can be explained by gender differences in fields of study and employment sectors. Although the issue is not one of lower abilities among girls, female pupils study math and science – fields that lead to relatively higher-wage employment – at lower levels in upper secondary schools than their male counterparts, which reduces their subsequent likelihood to study these subjects at the academic level. Women are more likely to be employed in the service industries than in the manufacturing and infrastructure industries, where wages are higher. To the extent that women’s choice of study subjects arises from normative biases transmitted to them by their parents, teachers, and society at large, it is important that this issue be understood and rectified. Girls should be encouraged to study math and science at higher levels, both in secondary school and in higher education. This needs to be supplemented by a major improvement in Israel’s early childhood education system – first and foremost for the children, but also in terms of availability and cost for mothers wanting to work more hours. It is also recommended that paternity leave be instituted, and that tax benefits and the “work grant” (also commonly known as the negative income tax) for young mothers be increased.