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The truth behind wage penalties in caring occupations

Is there a wage penalty for workers in caring occupations?

It is often claimed that people that work in caring occupations, such as nurses and teachers, get paid less than might be expected on the basis of the qualifications required and responsibilities entailed by their jobs. Some evidence from other counties, particularly the US, support this view. 

Reasons advanced for this include the existence of so-called ‘compensating differentials’ (e.g., generous pensions, high levels of job satisfaction) and/or the fact that many caring occupations are female-dominated, which results in them being ‘devalued’.

Research summary

In this study, we evaluated whether people working in certain caring occupations—medicine, nursing, teaching, social work, child care, and nursing assistants—earn less than people working in comparable occupations, defined by a measure of their socio-economic status.  We find that people working in caring occupations that are professionalised (and have high membership in powerful representative organizations) are in fact paid more than people in comparable occupations, controlling for individual characteristics like level of education.  However, those people who work in occupations that do not require professional and/or higher educational qualifications—nursing assistants and child care workers—do experience a wage penalty.

It is important to emphasise that we cannot conclude that people working in medicine, nursing, teaching and social work are in any sense overpaid.  These occupations are known to be among the most stressful, often require long and unsocial working hours, etc.  Whether the wages typically earned by members of these occupations is fair compensation for these job characteristics is not a question we can answer in this research.

We assess whether compensating differentials might explain the wage penalties we uncover.  We find no evidence that job security or pension benefits play a role.  There is some evidence for higher levels of job satisfaction amongst the disadvantaged occupations compared to their peers, although the differences are small.  The most likely explanations for the existence of these wage penalties are their lack of professional status (with associated powerful representative bodies) and/or the predominantly female make-up of these occupations.

Research published

Read the research article in the British Journal of Industrial Relations, March 2013.