Can Flexible Work Close the Gender Pay Gap?

Labor markets have become more meritocratic over time, with discrimination on the basis of gender and other traits slowly falling away. Yet the gender pay gap still persists in the United States, even when pay is adjusted for hours, roles, and the experience of workers. Flexible work platforms like Instawork may be able to close the gap, though, for a very simple reason: the wage rate for each shift is fixed before any worker takes it. 

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Flexible work may close gender gap

Here, for example, are two charts on average hourly rates in the New York area:

11 Mar 2022 gender pay gap in New York 1

11 Mar 2022 gender pay gap in New York 2

The hourly wages are extremely similar, with very few roles showing statistically significant differences, and women often being paid more on average than men. We see similar comparisons in our data across the United States. On average, women received higher hourly rates than men in 45% of the role-industry-region combinations where women and men have both worked at least 100 shifts since 2021. In only 3% of these combinations did women earn 95% or less than men. The gender pay gap is virtually non-existent on the Instawork platform.

Value-for-money by gender

Given how the Instawork platform works, this result may not be surprising. Yet there is another aspect to these results where the data offer further insight. As with most flexible work platforms, Instawork allows hourly professionals and the local businesses that hire them to rate each other after each shift. This reputation system can add to the meritocratic nature of the platform by reducing asymmetric information about professionals’ working ability and businesses’ working environments. But it also allows for an analysis of value-for-money in the relationship between wages and perceived quality.

A useful caveat in this kind of analysis is that businesses paying higher wages may have higher expectations for the hourly professionals they hire, and therefore workers with greater ability may not always receive higher ratings. In an analysis of value-for-money by gender, however, this point is moot; women and men are paid almost the same, so any differences in the perceived quality of their work should not depend on those expectations. 

The following chart shows how ratings by businesses of hourly professionals compared between women and men in the New York Area:

11 Mar 2022 pay versus ratings in New York

As shown earlier, the wage rates for women and men are very similar. But in most cases, the average ratings for women were higher – sometimes very significantly higher. This result hints that businesses may have a more productive transaction, on average, with women while they are paid the same as men. In other words, women may offer more bang for the buck in the hourly workforce.

If women actually merit higher pay than men for the same jobs, then the challenge is even greater than the equal pay literature might suggest. For women, equal pay may not be enough to make pay fair.

Realtime metrics

These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 2/26/2022 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:

  • $0.09 drop in average hourly wages
  • 2.7% point rise in the share of short-notice shifts
  • 0.5% point rise in the fill rate for all shifts

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