Gender Pay Gap

The gender pay gap is defined as ‘”the difference between average gross hourly earnings of male-paid employees and of female-paid employees as a percentage of average gross hourly earnings of male-paid employees”.

This gap exists when men and women receive different amount of money for work or equal or comparable value. The gender pay gap of roughly between 17 and 22 percent means that women workers earn less per hour than their male counterparts. Gender pay gap is both cause and consequence of gender inequality.

The pay gap is typically based on hourly pay. Thus, when wages are recorded as weekly or monthly wages, they are computed into hourly wages wherever that is possible.

Simply put, the gender pay gap is the gap between what men earn and what women earn.

What are the reasons for gender pay gap?

Gender Pay Gap or pay-gap may exist due to a combination of factors, including:

• Personal characteristics: gender, age, level and type of education (i.e. subjects studied), work experience, job tenure, number of children, marital status, ethnicity, race and migration status, region, religion,
• Job characteristics: contract type, working time (part time vs full time work) and conditions, occupation, job status
• Employer/Company characteristics: economic sector, firm size, union existence
• Segregation: horizontal or vertical. In horizontal segregation, women are concentrated in a smaller number of sector/professions with less value and pay. In vertical segregation, less number of women is employed in well-paid jobs and they face obstacles in their career advancement
• Institutional: education and professional training, collective wage bargaining, industrial relations, parental leave policies, childcare, elder care
• Social Norms: education of women, job choices, career patterns.

What is the world average gender pay gap?

The world average gender pay gap is around 18 per cent, with Europe, Oceania and Latin America generally showing more positive results than Asia and Africa, for which the data availability is limited.

This percentage can range depending on which country is featured. Research has shown the gap being as high as 46 percent (Azerbaijan) in one country, and as low as 4 per cent (Paraguay) in another.

Why is the gender pay gap important?

The gender pay gap shows how women’s work is valued. It reveals gender discrimination and occupational segregation in the workplace. The figures also reflect:

• The concentration of women in part time work, in specific jobs.
• The uneven distribution of domestic responsibilities in which women take up the majority of household tasks.
• The greater likelihood for women to take career breaks due to child and family care.

What is the impact of gender pay gap?

Gender pay gap not only impacts a women worker’s life but also her whole family especially when these women are sole breadwinners and single parents. The pay gap contributes to the poor living conditions, poor nutrition and thus makes the millennium development goal to eradicate poverty and hunger more distant.

What does the International Labour Organisation (ILO) say about the gender pay gap?

The Equal Pay Convention 100 of the ILO was adopted in 1951, and supports equal remuneration for men and women workers for work of equal value. Sex discrimination in remuneration is one of the important causes of existing gender pay gaps. The Equal Remuneration Convention (No. 100) is one of eight core ILO conventions, which seeks to remove discrimination in remuneration by ensuring that men and women receive equal remuneration not just for similar work but also work of equal value. This Convention can be applied by:

• National laws or regulations.
• Legally established or recognised machinery for wage determination.
• Collective agreements between employers and workers; or
• A combination of these various means.

Has the Equal Pay Convention 100 of the ILO had a positive impact on the gender pay gap?

Research has shown that the implementation of the Equal Pay Convention 100 of the ILO can have a positive impact on a country’s gender pay gap, and that economic competition may also have a positive effect.

However, often these measures are part of a wider set of policy initiatives by governments to try to remove existing inequalities in society, such as enabling the re-entrance of females in the labour market through the improvement of childcare facilities, improvement of access to education, and improvement of opportunities to have more say about worktime.

Does membership of a trade union help to diminish the gender pay gap?

WageIndicator research shows that trade union membership has

a positive influence on the gender pay gap, with the gap in the majority of countries being lower for unionised employees than for employees who are not a member of a trade union. This is due to the fact that unionised members may often have collective agreements in place regarding equal pay, and related issues.

Does a higher education mean a smaller gender wage gap?

WageIndicator data reflects that the higher education of women does not necessarily

lead to a smaller pay gap. In some cases the gap actually increases with the level of education obtained. However, in general, more education means a higher salary overall.

Do age and amount of service affect the wage gap?

Yes. According to research the pay gap increases with age and years of service. The older one gets, the more one earns. Young people earn less then older people, on average. Older men earn substantially more then younger women.

Does full or part time work make a difference to the wage gap?

Yes. Because women take on the greater burden of caring and domestic responsibilities, this means that more women than men work part time. Women are overrepresented in part time positions, which are mostly low-paid. Additionally, part-time positions offer little scope for promotion. On top: women who work part-time do have part-time salaries and part-time pensions!

What effect does child rearing have on the gender pay gap?

Child rearing has a large impact on women's average wages. In some countries, women withdraw from the labour market when marrying or giving birth, and only return after a couple of years. A re-entry mostly means getting a lower paid job than the woman had before her career break, with an allocation into a part time or dead-end job. This is called the “child penalty”.

A few countries have institutional arrangements allowing women to take long leave when giving birth and caring for their young children. When these women return to work, they mostly take up their previous jobs. In these countries, no effect of child rearing on the gender pay gap is noticed.

Do pay gaps occur by occupation?

Yes. By law, equal pay for work of equal value must be applied. However, female dominated roles such as cleaning, education, health, catering and clerical work are generally paid less compared to roles of equal value in which men dominate. However the real pay gap can be watched in the finance sector.

Is there discrimination around gender and pay despite legislation?

Yes. Discrimination in the workplace can and does exist, despite legislation in place. Firstly, different pay is awarded for the same job, for example, to a female and male teacher with the same qualification, experience and responsibilities. Secondly, discrimination occurs when jobs that are different, but evaluated to be of equal value, are paid differently. In this case, the requirements of many female-dominated roles such as interpersonal skills are valued less highly than those of traditionally male occupations. In Northern part of Europe this type of discrimination isn’t seen so often anymore.

Can the gender pay gap be addressed on a local, national and international level?

Yes – the ILO does. The ITUC does. WageIndicator tries to collect data. See reports below in this page.

What are other factors that contribute towards improving women’s position in the workplace, apart from pay?

Policies that could close the gender pay gap, and women’s position, include:

• Encourage child care - it allows women to continue working. To stop working for a couple of years, means a new education is needed.
• Measures to ensure schools encourage female students to choose also male-dominated disciplines.
• Polices allowing both parents to achieve a better work-life balance, to ensure women’s work experience and seniority is not penalised.
• Measures to guarantee seniority continues to accumulate during maternity leave.
• Recruitment, selection and promotion practices to enhance women’s access to better paid, male dominated occupations.
• Measures to encourage unionisation and collective bargaining, especially in jobs that are female-dominated, for example part-time, fixed-term and home-based work.

Ten Tips for women to help close the gender wage gap:

• Educate yourself.
• Choose the sector where you find the best paid jobs – such as the metal, mining, or chemistry sectors, or a leading position in government or parliament.
• Work full time.
• Take advantage of any promotion.
• Take advantage of any option to educate yourself on the job.
• Negotiate around your salary and salary raises.
• Change jobs now and then.
• Get older and keep working
• Join a company with good collective agreements regarding equal pay and related issues.
• Find the largest company in your country and apply for a job.

Related Articles

• Frozen in Time: Gender Pay Gap Unchanged for 10 Years - IUC
• The World Gender Gap report
• Gender Pay Gap Statistics - Europe