Skip to main content
business school research

At the hourly wage level, women earn on average 90 per cent of what their male counterparts do, a University of Guelph study found.

The Globe's monthly roundup of research from business schools.

Women outnumber men on many university campuses and participate in the overall labour force at rates that are similar to those of their male colleagues. Yet, when it comes to wages, men continue to out-earn women despite years of pay-equity legislation.

"In Canada in 2015, there is still a gender wage gap," reports Miana Plesca, associate dean of research and graduate studies at the University of Guelph's college of business and economics.

In a study prepared for the Ontario's Pay Equity Commission, Dr. Plesca and her co-authors explore the causes of the gender pay gap and how it can be resolved.

The report compares both the average annual earnings and average hourly wages of men and women. The distinction is important because women work fewer hours than men, on average three to four hours a week, largely for family reasons. This explains a significant amount of the gap in annual earnings, Dr. Plesca explains.

However, even at the hourly wage level, women earn on average 90 per cent of what their male counterparts do, the study found.

The gap in hourly earnings is almost non-existent among young people at the start of their careers. "If anything, young single women make a bit of a premium," she says. But by 30, the gap is present – and for married, divorced, separated and widowed women, it starts earlier.

Dr. Plesca attributes the gap to what labour economists call "statistical discrimination." This refers to the preference of employers to promote male workers over their female counterparts, even single ones, because women are more likely to take time out of their careers to have children and are more likely to be absent from work if they have children in their care.

"Employers don't want to invite disruptions so they will opt to promote the man," Dr. Plesca says. "I think this is the reason behind the gender wage gap."

While McMaster University's move to give its full-time female faculty members a $3,515 raise to address the wage gap on campus received much praise, small private-sector employers often don't have the same flexibility, Dr. Plesca notes.

To eliminate the remaining wage gap, governments should introduce policies that encourage women to return to work, such as more accessible daycare, and that support men in taking a greater share of parental leave, she says.

The study also looked at wage differentials among high-income earners. Using Ontario's Sunshine List, which includes public-sector employees who earn more than $100,000 a year, the study found that while men outnumber women on the list, the difference in earnings was almost negligible, except for two notable sectors: hospitals and postsecondary institutions.

The widest pay gap existed among those who hadn't completed high school. According to Dr. Plesca, this is likely because men in this group tend to select labour-intensive, well-paying jobs in sectors such as mining and resources while women opt for lower-pay retail jobs.

Dr. Plesca and her co-authors presented their findings at a workshop held recently at the Guelph, Ont., school.

The best savers have high IQs, EQs

What makes some people better able to save for retirement than others?

Research being conducted by Richard Deaves, professor of finance and business economics at McMaster's DeGroote School of Business in Hamilton, looks at the role cognitive ability and emotional stability play in making financial decisions.

Using two simple but highly predictive tests, Dr. Deaves and his research partner, assesses how IQ and "emotional quotient," or EQ, affect investors' ability to take on risk and to save, both of which lead to higher levels of wealth accumulation over time. The research confirms previous findings that show, "to put it bluntly, that smart people are better at saving, and smart people are able to take on more risk," such as investing in the stock market, Dr. Deaves says.

But early results of their study show that emotional intelligence may play an even more important role in influencing sound financial decisions. Specifically, individuals who are better at delaying gratification to achieve longer-term gains are better at saving and can stomach greater risk. "Some people are good at postponing having a good time whereas others want to have a good time now," he says. "But you pay the piper."

The implications of the findings are particularly relevant in today's economic climate when private-sector employers are moving away from defined-benefit pension plans, leaving workers to take more responsibility for their retirement savings through RRSPs and other savings vehicles.

"It's really important to protect our citizenry," says Dr. Deaves. The best way to do this is through education, he adds. "I think you can educate people," he says. "You can explain to them [the need] to take the long view" when it comes to investing.

Zero not the only size for models

In a world where fashion runways and magazine spreads are full of skinny models, some even dangerously so, Dove's commercials featuring average-size women promoting soap and deodorant stand out.

A soon-to-be-released study co-authored by Kai-Yu Wang, marketing professor at Brock University's Goodman School of Business in St. Catharines, Ont., finds that Dove may be on the right track.

Participants in the study, which included women aged 18 to 25, were asked to evaluate ads featuring size-zero models and size-six models. The study included models in ads by established fashion brands, such as Gucci, as well as unknown brands (for which the authors used fictitious names).

In both cases, the study found that average-size models could be used interchangeably with size-zero models with virtually no impact on how participants viewed the model or the product they were advertising. "The results suggest that, particularly for new brands, they don't have to be afraid of using average-size models," Dr. Wang says.

He hopes the study will convince the industry to change its ways both for the health of the models and all women in general, he says.

The study will be published in a forthcoming issue of the European Journal of Marketing.

Rosanna Tamburri can reached at

Interact with The Globe