In 2015, Patricia Arquette won the Oscar for best supporting actress, her speech was a call for equal pay among female and male stars in Hollywood. Her words at the gala ceremony were cheered and later on supported by widely recognised actresses in the industry such as Meryl Streep, Charlize Theron, Jennifer Lawrence, or Natalie Portman. But do male actors really earn higher salaries than their female co-stars? Our research finds an unexplained gender differential of around 25 per cent per movie, and although these differentials appear to moderately shrink with higher earnings, they are persistent even after 10 years of experience.
The Hollywood industry provides an interesting and important scenario to study gender wage differences for several reasons (1) Hollywood is the largest film centre in the world and represents a huge economic and cultural export; (2) contracts are short term, negotiated actor by actor and movie by movie, allowing stars to be paid according to their current individual performance, productivity and contribution to a specific film; (3) stars of different genders frequently perform in the same movies where they essentially do the same work, at the same time and in the same location.
To analyse the gender wage gap among Hollywood stars, we gathered an original dataset of 1,344 movies from 1980 to 2015 and 267 Hollywood stars, from which 38 per cent are female actors. The data was obtained from different sources: IMDb, Box Office Mojo and elsewhere. This star-by-movie data is then matched with a set of earnings determinants including actor’s background, financial success of a star’s previous films, customer preference, and different quantitative and qualitative characteristics of film.
A preliminary graphical analysis shows us that in the long run female and male actors’ salaries have drastically increased from 1980 to 2015, however the wage gap persists and it is virtually the same in 1980 as in 2015 (Figure 1). The unadjusted results show that female stars earn 2.2 million dollars (56 per cent) less per film. When we adopt a standard specification where salaries per actor and film depend on the actor’s background characteristics and current film specifications, approximately half of the gap can be explained by our controls, however, we still find an unexplained gender gap of around $1.1 million dollars (around 25 per cent) per movie. Several robustness checks show that the differential in earnings remains unchanged and significant, and they can only be explained partially. This gender wage gap of 25 per cent is in line with the estimates reported by previous studies of gender wage differentials in other labour markets, specifically within highly paid professionals, for example, software markets (Heywood and Nezleck 1993, 2018), physicians (Bashaw and Heywood, 2001; Reyes, 2007), business executives (Bertrand and Hallock, 2001), lawyers (Wood et al., 1993), or tennis players (Kahn, 1991).
Figure 1. Male and female stars’ mean real earnings per film, 1980-2015
Following our previous results, we search for the factors that may determine the explained and unexplained salary differences between female and male actors — unexplained differences are attributed to discrimination. The results show that the explained gap associated with discrimination is driven by genre differences in the return to action and adventure genres, and to sequels. We then consider the pattern of gender differentials across the distribution of earnings, and we find that the percentage difference in earnings by gender does not grow, in fact, we can argue that it is slightly smaller in percentage terms at the top of the distribution.
Finally, we use a dynamic analysis to determine the pattern of the gender wage gap. First we include stars’ years of experience in our analysis, and then different age bands. In terms of experience, we observe that the wage gap decreases at a smooth rate with years of experience since first movie appearance, however after ten years of experience the gap still persists. When analysing the pattern of gender wage gap with age, we find tthat from under 18 through the middle age the gender differential does not dramatically change and remains constant at around $1.5 million, but from 50 years old and above it does however more than double in dollar volume and so the differential is larger among older actors.
Our research aims to provide some evidence on gender wage differentials in Hollywood and highlights the importance of narrowing this gender earnings gap. Thus, the suggestion that contracts be routinely made public information could be sensible. Its success would rest on an assumption that providing social information about other co-stars’ earnings could reduce the negotiation gap or influence the habits of the viewing public and that these would influence the residual earnings gap. Yet, we have provided only the first step of a thorough empirical inquiry into that earnings gap.
- This blog post is based on the author’s research with John S. Heywood and Maria Navarro Paniagua, presented in August 2019 at the annual congress of the European Economic Association in Manchester, England.
- The post gives the views of its author(s), not the position of LSE Business Review or the London School of Economics.
- Featured image by Dick Thomas Johnson, under a CC-BY-2.0 licence
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Sofia Izquierdo Sanchez is a a senior lecturer in economics at the University of Huddersfield’s department of accounting, finance and economics, and co-director of Huddersfield Business School’s Northern Productivity Hub. She was previously a part-time lecturer at the University of East Anglia and a part-time senior research associate at the Centre for Competition Policy. She has a PhD in from Lancaster University. Her thesis focused on the importance of advertising expenditure affecting word-of-mouth to increase revenues, and the competition between media and creative industries.