Mend the Pay Gap

A new report from the Organisation of Economic Cooperation and Development found that the gender pay gap for well-educated American women is worse than that of every other OECD country except Brazil, Chile, Mexico, Israel and the Slovak Republic.

The report looks at trends in education in the group’s 35 relatively wealthy member countries, examining everything from the number of hours a teacher teaches, to the value of a degree in countries around the world.

It shows that women are increasingly pursuing tertiary education—that is, community college, bachelors degree, masters, or doctoral degrees. In 2014, 58% of graduates from their first institution of post-high-school education in the US were women. But for those efforts, female full-time workers earned just 68% of what men did. That 32% gap is seen for 35- to 44-year-olds in the US, as well as 55- to 64-year-olds, suggesting things aren’t improving too much.

Some of this is attributable to career choice. Among US women, 19% go into teacher training and education or health and welfare, which are relatively lower paying jobs. This is a global phenomenon. In 2014 there were, on average, three times more men than women graduating with a degree in engineering and four times more women than men getting education degrees among the OECD countries.

But in the US, the pay gap between teaching and more lucrative professions far surpasses that of its OECD counterparts, exacerbating the overall gender pay differential. Women in teaching and education earn 61% of what those who study manufacturing, engineering, construction and computing make. That pay gap is much larger than the average percentage among OECD countries.

There was some good news for American women in the report. They may get paid a lot less for their work than men, but educated American women are among the highest paid female workers in the world. Also, those women who were better-educated were healthier: 95% of highly-literate adults reported being in good health, compared to 64% of those with low literacy rates.

The report showed that overall, the Americans continue to make gains in completing some form of higher education. The share of all adults (25-64) in the US with tertiary education—45%—is 10 percentage points higher than the average of other countries.

But that advantage is shrinking fast. For younger adults, the US has a 5-percentage-point lead over the average of its OECD peers, compared to a 16-percentage-point gain over those aged 55 to 64. “This is not due to a decrease in the share of tertiary-educated adults in the Unites States, but rather to a more rapid increase in the tertiary attainment rate in other countries,” the report said.

The report shows unambiguously that education pays off in the long term. People with tertiary qualifications earn, on average, 55% more than those with high school or equivalent degrees. And the benefits of educating citizens, such as future tax revenues, far outweigh the costs of not educating them, in unemployment and social insurance.

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