Gender income disparity among white-collar regular employees: Explaining the causes responsible for 80% of the disparity and its mechanisms

Abstract

This chapter presents the results of the decomposition analysis of the gender income disparity among white-collar regular employees using the DFL model, which relies on propensity score standardization. First, the main results of the analysis show that six variables collectively explain 78% of the disparity. Gender differences in three human capital variables for age, educational attainment, and years of service account for 35% of the gender income disparity, whereas three variables for occupation, working hours, and positional rank account for additional 43%. Individually, gender differences in positional rank possess the strongest explanatory power. Next, the disparity in the portion that cannot be explained by gender differences in the six variables is analyzed. Also demonstrated is the degree by which decreases in gender income disparity vary among each of the categories of age, educational attainment, occupation, working hours, and positional rank given the hypothetical situations when human capital characteristics are equalized between men and women and when positional rank is also equalized between men and women. The following results were obtained. (1) The tendency for gender disparities in income to increase with age is mostly explained by increases in gender disparities in positional rank after the age of 40. (2) Most of the gender disparity in income among college graduates can be resolved by eliminating gender differences in years of service and positional rank, whereas most of the gender income disparity among advanced training school graduates can be gotten rid of by eliminating differences in positional ranks. However, a large portion of the gender disparity in income among high school graduates cannot be eliminated even with identical years of service and positional rank. (3) Large gender income disparities remain among professionals and among female-dominated clerical workers even when human capital and positional rank are equalized between men and women. (4) The realization of gender equality in income opportunities among men and women employed in the position of section chief (kacho) and above is much greater than those of lower positional ranks.