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

When Should You Speak to a Lawyer About a Legal Issue?

Legal issues can begin with a simple question, then become harder to manage once formal steps are involved. Many people wait until a matter feels urgent before seeking guidance, even though earlier ...

Daily Bulletin - avatar Daily Bulletin

The strategic rise of Bali as Australia’s next essential healthcare support hub

As Australian healthcare providers grapple with unprecedented operational bottlenecks, a new nearshore model is quietly transforming patient care delivery. Forward-thinking organisations,  including...

Daily Bulletin - avatar Daily Bulletin

Cost Savings and Benefits of Using Used Pallets in Logistics

In today’s competitive logistics and supply chain industry, businesses are constantly looking for ways to reduce operational costs without compromising efficiency and reliability. One of the most prac...

Daily Bulletin - avatar Daily Bulletin

How Fulfilment Services in Australia Help Businesses Scale Efficiently

The growth of e-commerce and modern retail has transformed customer expectations. Consumers now expect fast shipping, accurate order processing, and seamless delivery experiences regardless of where...

Daily Bulletin - avatar Daily Bulletin

Practical Ways Australian Workplaces Can Reduce Operating Costs

Reducing business costs doesn’t always mean cutting staff, shrinking services or making the workplace feel bare-bones. In many cases, the smarter savings are hiding in everyday operations: the light...

Daily Bulletin - avatar Daily Bulletin

Executive Recruitment Solutions That Help Organisations Secure Exceptional Leaders

Leadership has a direct impact on organisational performance, employee engagement, strategic growth, and long-term success. Businesses operating in increasingly competitive environments require experi...

Daily Bulletin - avatar Daily Bulletin

Why A WooCommerce Website Designer Matters For Online Growth

Running an online store today requires more than simply listing products and waiting for customers to arrive. Businesses need a website that is fast, reliable, easy to navigate, and designed to suppor...

Daily Bulletin - avatar Daily Bulletin

Turning Your Empty Tables into Revenue

The rise of AI demand tools in hospitality, the EatClub–CommBank partnership, and seven trends reshaping Australian dining  A growing number of Australian venues are turning to AI-powered demand mana...

Daily Bulletin - avatar Daily Bulletin

High-Impact Dental Marketing Strategies That Are Driving Real Practice Growth Today

The landscape of dental practice growth in Australia has shifted dramatically over recent years. Standard, broad-spectrum advertising campaigns no longer yield the return on investment they once did. ...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Lighting Shop in Perth: How The Right Lighting Can Transform Your Home And Business

The right lighting can completely change the look, feel, and functionality of any space. Whether it ...

Traffic Light System Solutions For Safer And More Efficient Traffic Management

Modern cities and growing communities rely heavily on effective traffic management to ensure safety...

Gold Migration Lawyers in Liquidation: How the Closure Affects Your ART Appeal

If your appeal was with Gold Migration Lawyers, a recent change to how the Tribunal decides cases ...

The pressure cooker: life in urban Australia in 2026

Australian cities have always been demanding. Long commutes, rising housing costs, busy schedules a...

What Actually Makes a Good Criminal Lawyer in Melbourne

Most people only think about this question once. That is usually too late. Most people charged wi...

Why Working With A Chatswood Tutor Can Improve Academic Performance

Academic expectations continue increasing for students across primary school, high school, and senio...

Is It Worth Getting Solar Panels in Melbourne?

The real question is not whether solar works in Melbourne. It works. The question is what it is co...

How A Diploma Of Project Management Builds Practical Skills For Modern Work Environments

Developing the ability to plan, execute, and deliver outcomes efficiently is a key requirement in to...

How to Choose the Right Football for Every Level

Choosing a football may seem straightforward, but the right option depends on who will be using it a...