Research finds that women earn 18 percent less than men in online job market

An information systems team wins prestigious National Science Foundation grant to explore privacy issues in the gender wage gap.

An information systems team has analyzed a huge data set from an online labor market and discovered that women earn less than men in technology work — primarily because of the women’s choices in seeking jobs.

The researchers looked at a year’s worth of data from the “IT, software, and website” employment section of Freelancer.com — an online gig site that has more than 30 million people registered as employers or employees. They found that women made 81.4 percent of the hourly wage of their male counterparts.

“This is the hot topic we’ve been exploring for quite a while. There are many explanations for the wage gap,” says Associate Professor of Information Systems Yili (Kevin) Hong. His co-authors in the study were doctoral student Chen Liang, Associate Dean and the Earl and Gladys Davis Distinguished Professor Bin Gu, and Jing Pen of the University of Connecticut. Their research has been presented at several international conferences.

Two explanations for the wage gap are discrimination and women’s job-seeking behaviors.

“There (is) tons of literature looking at discrimination, and that’s established,” says Hong, who also is co-director of the Digital Society Initiative and director of the PhD program in the Department of Information Systems.

Females are less likely to be selected for a job and they earn a lower wage, purely because of discrimination.

The W. P. Carey team was interested in the second explanation, Liang says.

“Specifically, we find that females tend to prefer jobs with lower hourly budgets because they think that jobs with higher hourly budgets are more competitive,” she says. “We also find that females tend to bid later, so they can gather more information about prior applicants, and we also find that females tend to have higher avoidance of monitoring.”

Women are more willing to accept jobs that pay less in order to avoid being monitored, she says.

While Freelancer.com offers one-off jobs paid upon completion, such as projects and articles, other work is paid by the hour, such as developing a website or entering data.

“These days, a lot of work is remote and decentralized and that requires a certain level of monitoring to be efficient,” Hong says. “Otherwise the workers can play YouTube videos and still get the money.”

In fact, technology to monitor workers has itself become an industry.

Liang and the research team won a $15,000 doctoral dissertation research grant from the National Science Foundation to take the gender wage gap study even further. They’re designing experiments to better understand why women are averse to monitoring.

Hong says that one potential explanation might be financial uncertainty: “If they are monitored and in the process they don’t fare well, the employer can use it as evidence to not pay them, even if they’re not watching YouTube videos.”

The second explanation is privacy concerns, according to Hong.

In the typical monitoring technology, the screen is going to be recorded or there could be random screenshots, even each stroke you type into the system can be monitored. That’s creepy.

If the researchers find out that privacy concerns are what’s driving women to avoid jobs that include monitoring, the implication could be better technology or regulation.

“There could be less intrusive monitoring systems developed. Or enforcement by the government at a certain level — you cannot record keystrokes, or you can take a screenshot only every 30 minutes,” he says.

Liang says the grant also will allow the team to explore other factors like expectation bias.

We wonder whether females tend to expect that the jobs have different wages or costs or benefits compared to the males. The difference in expectations may influence their choice and the gender wage gap.

Overall in the American economy, women earned 82 percent of what men earned in 2017, according to a Pew Research Center analysis of median hourly earnings of full- and part-time workers. The gig economy was expected to reduce that gap, for example, by offering flexible hours to compensate for the “motherhood penalty.” But it hasn't worked out that way.

“Think about Uber. It’s not like I can give a female driver a lower wage. It’s determined by an algorithm,” Hong says.

“Yet there’s research finding that Uber female drivers still earn less — because they drive less during the night or don’t go into weird areas and they don’t optimize their driving during peak times to earn surge wages.”

Hong has been studying the gig economy for several years, and last year won a grant from the Robert Wood Johnson Foundation to study how new technology will affect the future of work. It’s important to delve deeper into the reasons for the wage gap, and that’s why the NSF grant is so important, Hong says.

“It’s a great recognition for W. P. Carey because it’s very competitive,” he says.