Ravi Chandran
Women’s ability to obtain home loans is not hindered by their lower earning capacity
By: Hitesh Khan/
The Ministry of Manpower (MOM) in an occasional paper titled “Singapore’s Adjusted Gender Pay Gap” said that Singapore’s adjusted gender pay gap (GPG) at 6.0% is significantly lower than the unadjusted GPG of 16.3%. In the paper released on Jan 10, MOM added that after taking into account factors such as industry, occupation, age, and education Singapore’s adjusted GPG has also narrowed over time, down from 8.8% in 2002, and is lower compared to other developed countries, such as the United States (8%) and Canada (~8%).
The GPG is a common measure for gender income inequality, by computing the difference between the median incomes of men and women. The adjusted GPG, however, compares the incomes of men and women with similar characteristics such as industry, occupation, age, and education. It is therefore a better measure of whether men and women are paid equally for doing similar work. It also provides insight into the factors that contribute to the pay gap, which facilitates informed decision-making within the Government to reduce it.
The paper concluded that occupational segregation is a key contributor to the unadjusted gender pay gap. It said that the employment rate among women rose strongly over the past decade, and more women are now in PMET occupations. However, men continue to be over-represented in higher paying occupations and women tend to be in lower paying ones. This is “occupational segregation” and a key contributor to unadjusted GPG.
In explaining the causes of occupational segregation and initiatives to reduce it, MOM said, “occupational segregation tends to occur due to inherent gender differences.”
“For example, men and women generally have differing personality traits and skills, psychological attributes, and choices of field of study. As the median wages in male-dominated occupations have been growing faster than those in female-dominated occupations, occupational segregation’s significance in the unadjusted GPG has also grown over time.
“Occupational segregation can persist when women are deterred from studying in “traditionally male-dominated” fields or joining the workforce in such sectors. To dispel notions of “traditionally male jobs”, organisations in such sectors have started mentorship drives, networking, and career talks for women. This also enables the sector to tap on a wider pool of talent. For instance, more women are increasingly being recognised for their work in the technology sector, such as through the Singapore Computer Society’s (SCS) various awards, honorary fellowships and special interest groups. The Association of Information Security Professionals makes concerted efforts to conduct career talks at girls-only schools to attract young women to join the cybersecurity industry.
Occupational segregation can also occur due to differing value placed on workplace flexibility, i.e. women preferring jobs that offer more flexibility. In these instances, the Government supports companies to implement flexible work arrangements (FWAs) through initiatives like the Work-Life Grant. These allow men and women to meet both work aspirations and family/childcare responsibilities in the occupation of their choice.”
The Ministry said that several factors contribute to the adjusted gender pay gap, and that women still earn less than men after adjustment. This could it said, be due to factors that the model is unable to measure, such as the length of work experience and job preferences that impact wages. Due to social norms regarding gender roles within families, women typically play the primary role in caregiving such as caring for children and the elderly.
The paper said that this may have reduced their time and experience at work, leading to lags in career progression and hence earnings. The Government’s support for more shared care-giving responsibilities between men and women – such as through shared parental leave, and promotion of family-friendly workplace practices (e.g. Tripartite Standards on FWAs and Unpaid Leave for Unexpected Care Needs) – aims to reduce the effects of such social norms.
Women’s ability to obtain home loans is not hindered as loaning here dependent on borrower’s capacity, not gender
As women earn lower wages than men, there may exist some disparity between the male and female genders in terms of treatment and judgment in whatever aspects. But loaning here is largely depend on the borrower’s capacity to pay and not on gender. It could also be that women do not refinance home loan as regularly as men do, thereby end up paying more home loan interest cost.
A large percentage of women in Singapore are employed, which means that a significant percentage of them enjoy the freedom to borrow money, obtain loans, or be part of any exclusive loan programs. Such freedom to borrow includes loan programs and financial assistance from independent and private financial organisations – and these are not just limited to credit cards but also extends to mortgage loans, even automotive financial assistance.
Women’s ability to obtain home loans is not the reason why women home purchasers lag behind men
Mortgage statistics suggests that women are still lagging behind men when it comes to purchasing property. Statistics show that more than half of property buyers are men, with 57 percent of mortgage applicants being male and the remaining 43 percent of applicants being female.
Mortgage consultants have offered that this statistic could be due to a number of factors, such as the difference between the spending power of single men and single women. Another factor could be that women generally tend to invest more conservatively, as compared to men.
In Singapore, whatever gender you are, so long as you have a job and credit record, getting a home loan or whatever loan you want is not really a problem and so should not affect women’s ability to obtain home loans.
