Wage Equity in Healthcare

Despite the work’s social importance, nurturant and reproductive care workers earn less than others with comparable human capital and work demands More consistently, ceiling effects of these institutions lower the wages of otherwise higher paid care workers.
People Impacted
$ 491B
Potential Funding
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the problem
Nature and Context

Investigating what mechanisms produce the lower wages for nurturant care workers, and how occupational closure through education credentials and licensing requirements create varying returns to care work can reveal why wage disparity persists in different realms of healthcare. Additionally, the roles of wage equalizing institutions—labor unions and government sector care provision—in reducing wage disparities associated with care work are also a part of the problem. Occupational closure matters: care jobs with the highest educational and licensing requirements pay a wage bonus, while less closed care occupations incur a penalty. Wage equalizing institutions have both floor and ceiling effects on care worker wages that mitigate care penalties for selected workers: women reproductive workers and women in low-education/high-licensing occupations.

Symptoms and Causes

Selection on stable factors and human capital differences explain much of the lower wages for reproductive workers, but none of the low wages of nurturant workers. However, compared to non-care workers, college-educated nurturant care workers receive lower returns to work experience, suggesting limitations in how much learning can increase efficiency in care work, given the labor intensive, face-to-face nature of much of it.

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