In recent years, U.S. workers in lower-wage jobs like waiting tables or stocking shelves have benefited from minimum wage increases. Women, who tend to be overrepresented in such jobs, often see larger financial gains than men, even though the policies are gender-neutral.

However, a new study from the Kellogg School complicates this narrative. It shows that when overall well-being is considered, women may actually benefit less than men from a rise in the minimum wage.

Less of a boost

The research, based on data from a large U.S. retailer, found that women sales associates experienced less of a boost to their welfare from minimum-wage increases compared to their male colleagues. This was especially true in regions where market wages for women were lower than for men. In such areas, women felt more pressure to work harder to keep their jobs, while men, facing better outside job prospects, did not experience the same stress. In areas where market wages were equal, there were no such gender differences in well-being.

The study examined over 10,000 sales associates at about 200 stores between 2012 and 2015. Sales associates at the company receive a fixed base pay and earn commissions through sales. When commissions don’t bring their pay up to the minimum wage, the employer “tops up” their earnings.

Although the company had gender-neutral pay policies, minimum wage laws varied across locations. By comparing stores near state and county borders where one store had a minimum-wage increase and the other did not, researchers were able to analyze the impact of wage increases on employee behavior.

Unequal share

The findings were clear: when minimum wages went up, women worked disproportionately harder than men in regions where their overall job prospects were worse. As a result, they earned higher commissions, which meant they were less likely to receive a “top-up” to reach the minimum wage.

This suggests that even gender-neutral wage policies may have unintended effects, depending on local job market conditions. Companies may need to take these external factors into account to ensure their policies work as intended.

Still, the researchers believe that well-designed minimum wage increases could help close the gender gap in lower-paying jobs, where women are more likely to benefit from wage hikes. While past studies have looked at how minimum-wage increases affect pay, this research is one of the first to explore how they impact well-being.

“It’s not enough to look only at wages. We need to consider how policies affect the gender welfare gap, which may not align with the pay gap,” the researchers conclude. Women, despite earning equal wages, were working harder due to fewer job opportunities, which hurt their overall welfare.