New perspectives on the gender pay gap: trends and drivers

5. The Impact of Work Organisation on the Pay Gap

Research in the USA ^[10] has highlighted how certain professions have reduced their pay gap considerably, as a result of changes within the industry. For example, the industrial organisation of retail pharmacy in the US changed in the following ways:

• a strong shift away from self‑employment to employment in chain stores and supermarkets.
• In the late 1950s about 75% of all pharmacists were owners or were employed by an independent practice, by 1980, 40% were and recently just 14% were.

These changes had major implications for the pharmacy work environment, particular women, because they reduced the penalty for working part-time/part-year and employees were much more substitutable for each, than owners. As more pharmacists became employees, their earnings no longer included a premium for the additional risk and responsibility of ownership. The fraction of pharmacists working part-time then rose from around 9% in the 1970s to 20% largely driven by an increasing share of women as professional employees in the profession. These structural changes apparently decreased the costs to retailers of offering flexibility and the 'time dependency' working hours reduced - that is the importance of being present for long hours, and at particular moments was greatly reduced compared to a situation in which if the owner pharmacist is not present, the business struggles to operate.

Key lessons from this example include that high levels of time dependency and non-substitutable labour within a profession is likely to act as a strong barrier to parents with children. Many of these parents (mainly women) wish to work part-time, or are likely to experience work disruptions, requiring substitution (or flexible deadlines). Examples of jobs which are highly time dependent and non-substitutable include lawyers, medical consultants, CEOs etc.

Similar trends have been observed in the UK and Scotland and around 70% of registered pharmacists in Scotland are now female (around 60% in the UK in 2011 having risen from around 53% in 2002) ^[11] .

KEY MESSAGE: structural changes within industry can have important consequences for work organisation, with consequences for the pay gap. The concepts of time dependency and employee substitutability are also useful in understanding how to tackle professions with high pay gaps.