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Women make less in the gig economy. A new study asked why.

The answer lies in women’s lower ‘reservation wages’

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February 16, 2021 at 8:48 a.m. EST

When Jennifer Cartlidge lost her job at a pet supply store after covid-19 began shuttering businesses last March, she rushed to find work that minimized face-to-face contact. Cartlidge, 40, is a kidney cancer survivor with autoimmune issues, so she’s considered high-risk.

Signing up to drive for the food delivery app DoorDash near her St. Louis home seemed like her best bet. “It’s been a lifesaver,” said Cartlidge, who’s a mother of four school-age children. “I can take time off when my kids are sick and help them with remote learning.”

Cartlidge said she doesn’t take orders that offer less than $1 per mile, and she rarely delivers farther than a 10-mile radius. “I’d like to see a higher base pay, but I make it work,” she added.

Since the pandemic began, women have been disproportionately suffering from job losses; female-dominated fields such as retail service have shrunk; and many women have had to abandon their 9-to-5 jobs to care for children. For some women like Cartlidge, turning to gig work on popular Web and app-based platforms such as DoorDash, Instacart and Uber is the best solution.

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Women have long been the beating heart of the gig economy: In 2019, Instacart told NPR that more than 50 percent of people who shop for the app are women, while DoorDash said women make up more than 50 percent of its “dashers” in rural and suburban areas and more than 60 percent in urban areas.

But are they getting paid as much as men for their efforts? The answer is no, according to a recent study that found that even in a gender-blind online workplace, earning differences between women and men persist. The authors studied gender pay discrepancies on online microtask platforms — an anonymous market offering flexible, homogenous work. Among 22,271 workers who chose and participated in nearly 5 million microtasks, women’s hourly earnings were 10.5 percent lower than men, the study found.

The pay gap in the gig economy is narrower than in traditional workplaces, where the average woman earns 82 cents for every dollar, on average, a man makes. This gap is much larger for women of color, including Black women and Latinas, who make 63 cents and 55 cents, respectively, for every dollar a man makes.

But even on a platform where opportunities for overt discrimination, labor segregation and inflexible work arrangements are removed, and even after experience, education and other capital factors are accounted for, a pay gap stubbornly remains, according to one of the study authors, Leib Litman, a social and behavioral scientist who is an assistant professor of psychology at Touro College and co-chief executive and chief research officer at Cloud Research.

The reason? The authors’ new follow-up study found that women expect to be paid less than men do, which can lead them to make lower-paid gig choices.

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Previous studies had already highlighted gender pay gaps on gig economy platforms. For example, a 2018 study of more than 1 million Uber drivers found that while Uber’s app isn’t structurally set up to discriminate, there was still a 7 percent gender pay gap for three main reasons: Men tended to drive faster, had more experience on the platform and had fewer constraints about where they could drive.

However, even on a gig platform where all those specific structural factors that could be responsible are eliminated, there is still a pay gap. “We found that, on average, women tended to choose tasks that paid less,” Litman said. And while each gig app is structured differently, he maintained the model would predict the same results on any platform.

The authors found this is the case because women have lower “reservation wages” than men. That is, when women were asked the minimum amount they needed to be paid to do any kind of task, on any platform, they consistently responded with a number that was 10 to 15 percent lower than men — no matter their demographics, age or family status.

“We found a clear correlation between people’s income, or how much people earned in traditional jobs, and their ‘reservation wages,’” Litman explained. “Since women tend to make less money in traditional job environments, we believe they unconsciously bring that ‘baggage’ to gig platforms, influencing the kind of behavior and opportunities they seek out.”

Katy Williams, a 27-year-old full-time nursing student from Cleveland, started working part time for DoorDash and Instacart two years ago after her job at a private emergency medical services company would not offer her a flexible schedule to attend classes. She said she “wouldn’t be surprised if men make more.”

According to Williams, not feeling entirely safe driving as a woman has limited her ability to work as much as her male counterparts. She said the most she’s ever made was $110, working from 4 p.m. to midnight.

“We’re not earning enough to bring a man along and split the pay, in order to go to environments where we don’t feel safe,” she said.

In a statement, a DoorDash spokeswoman said: “This is an important topic and we remain focused on continuing to ensure our platform is equitable and inclusive for all. We’re proud that DoorDash provides flexible opportunities for Dashers to earn on their own schedule and to achieve their own goals, making more than $22 per hour that they’re on a job and serving as supplemental incoming for the majority on our platform. With women making up more than half of the Dashers, these are parents, retirees, veterans, entrepreneurs, students, and others who choose when, where, and for however long they want to work. We will continue to engage closely with the Dasher community, including the women who earn on our platform, to constantly improve and learn how best to serve them.”

The study’s findings appear to replicate previous studies of gender pay disparities, said Laurie O’Brien, associate professor of psychology at Tulane University. “Your past experiences do have a big influence on how you make choices,” she said.

For example, in the late 1970s, noted social psychologist Faye Crosby’s studies about “relative deprivation” showed that women are paid less than men across the board, O’Brien explained, which led to Brenda Major’s research in the ’80s and ’90s about whether women feel entitled to less pay. “Women and men were brought into a lab, asked to do tasks and paid themselves what they thought they deserved,” she said. The result? Men tended to work less hard and take more money than women did.

Litman said his study’s authors plan to follow up with other research about whether different informational and psychological interventions could help reduce the gig economy’s gender pay gap. However, O’Brien emphasized the burden should not simply be put on women to change: “Making sure women have the right information is really important, but ideally the platform structure should shift to reflect that,” she said.

Mikki Hebl, a professor of applied psychology at Rice University, whose research focuses on issues related to diversity and discrimination, agrees. “I do think that if women have experienced a level of pay discrimination throughout their lives, they likely have learned to value their work less,” she said. “However, it’s not just about changing the women — you could also say men have to change their ways. Why are men always maximizing?”

Still, for some women, working in the gig economy is their only option right now. The flexibility it allows is a must for 37-year-old Amie Story, who has been working for DoorDash, along with the grocery app Instacart, for the past two months. A mother of three from the Atlanta metro area, she needs to be able to take off work when her children are sick and switch off when her husband gets home from his job, she said.

“I average between $18-22 an hour, so I believe it’s good pay, especially for just picking up items and delivering them,” she said. “My mother-in-law works 12-hour shifts in a factory making less than that.”