Study Reveals Gender Pay Gap in Freelancing; Women Earn Up to 16% Less Despite Similar Education and Experience

While there’s a well-documented pay gap between men and women in traditional jobs, new research from Dutch online bank Knab suggests a similar phenomenon exists in the freelance world, too. Self-employed women make lesser than their male counterparts even with the same education and experience. As per Knab’s survey conducted among 10,000 self-employed people, the pay difference is up to 16%.

Lack of Equity in Freelancing

Women have increasingly turned to self-employment to escape the rigidities of corporate life, but they encounter setbacks of another kind while working for themselves. According to Knab’s research, the wage gap is the widest among highly-skilled self-employed. The hourly rate of women with a college or university education on average is about 13% lower than that of their male colleagues who do the same work with similar education and experience.

Previously, a report from the accounting platform FreshBooks indicated that women who work for themselves earn an average of $56,184 in annual earnings, versus $77,540 earned by men. In the survey, 20% of the women freelancers had to charge less than their male equivalents to get and keep clients.

Exceptions

Knab’s research found that the IT sector was a positive exception with signs of equity. In the IT sector, the rates for both women and men freelancers are about the same. One reason behind this could be the shortage of women in the sector and an abundance of men. The report further suggested that both men and women are equally happy, despite the wage gap.

Reasons Behind the Wage Gap

According to Knab, a possible explanation for the wage gap is the ability to negotiate. The report indicated that men generally consider themselves better at negotiations with almost 60 percent of men saying they negotiate well, compared to 40 percent of women who participated in the survey.

Even in corporate, a Glassdoor study found that 68% of women did not negotiate salary offers as opposed to 52% of men. On top of that, women freelancers are paid late more often than men, research from invoice company Bonsai found.

Furthermore, the gig economy has exacerbated the situation for women looking to work as freelancers. Most research conducted on the gig economy suggests that the gender wage gap can vary between 7% and as much as 37%, depending on the sector.

Sector-Wise Analysis

According to Freshbooks’ report, women running microbusinesses with up to five clients earned the same or more than men in only two sectors, marketing communications and media and information technology and support.

On the other hand, men earned more in the fields of legal, management consulting, development and programming, construction and trades, arts and entertainment health and wellness, and other creative fields as well. Men and women earned almost equal pay in the education field.

Meanwhile, Knab’s research showed freelancers charge the highest rates in the government, business services, and IT. Further, the income of self-employed workers varies significantly from sector to sector in Europe, as per Knab’s research. People working in the highest-charged sectors earn an average of between 120,000 and 140,000 euros gross per year, while freelancers in the sports and recreation sector make just about 50,000 euros per year. These gross incomes were calculated without taking business costs such as materials, insurance, income tax, pension premiums, etc., into account.