Addressing the gender pay gap: Government and social partner actions
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Introduction
According to the European Commission, ‘the [gender] pay gap measures the relative difference in the average gross hourly earnings of women and men within the economy as a whole’ (2007). The gender pay gap is one of the structural indicators used to monitor the European Strategy for Growth and Jobs, under the heading of ‘employment’.
In Europe, the unadjusted gender pay gap stands at a level of about 17.6%, according to data for 2007 from the Statistical Office of the European Communities (Eurostat). This figure, however, does not take into account differences in the number of hours worked or types of employment contracts. Parts of the unadjusted pay gap can be attributed to the fact that women tend to engage more often in part-time work, take more and longer career breaks which reduce length of service and work experience, tend to work in lower paid industries and work in economic sectors with less negotiating power. The list of factors used to explain the gender pay gap is long and relationships among them complex.
In the past decades, researchers worldwide have adopted fairly standardised quantitative methods for adjusting the gender pay gap. For example, a wide ranging meta-analysis by Doris Weichselbaumer and Rudolf Winter-Ebmer (2003) of more than 260 published adjusted pay gap studies for over 60 countries from the 1960s to the 1990s has found that, despite a significant decline in the level of the unadjusted pay gap, the unexplained or ‘discriminatory’ component of the gap has remained largely the same. Had all of these studies applied a similar standardised method of estimation, the yearly overall decline would amount to a slow 0.17 log points, implying a slow level of convergence between the wages of men and women. These types of studies use datasets of individuals that contain information on personal and workplace characteristics, and seek to estimate what impact each of the observed factors has on the observed pay gap. The remaining unexplained part of the gap is then referred to as the adjusted gender pay gap and is interpreted as being discriminatory. Behind this approach lies a productivity-based conceptр which assumes that all differences in pay – apart from the gender discriminatory part – can be attributed to differences in individual productivity resulting from age, experience or education, or to differences in market forces.
The recent research policy debate has however advanced further: adjusting for observed differences, while interesting in itself and providing insights into the determinants of the gap, may be misleading when it comes to addressing the level of discrimination. Not only may the unexplained component – the adjusted gap – still contain variables that simply have not been observed: the explained components could also still reflect the result of discriminatory processes.
Overall, the findings are blurred. Comparative studies that do not take into account institutional, societal or distributional impacts on the gender pay gap might result in ‘biased’ findings regarding the calculated level of discrimination – even after the adjustment of individual characteristics. The question seems to be unsolvable without applying a rather holistic approach as discussed by Rubery et al (2005), who put a strong emphasis on the work environment – the general wage structure, job and workplace characteristics and the role of the social partners. In their view (Rubery et al, 2005, p. 187):
‘The productivity focus denies a role for social actors in structuring pay within the labour market, including collective actors, such as trade unions and employers’ associations, as well as individual employers and individual workers.’
Segregation – which is often singled out as the most important factor in explaining the gender pay gap – is the result of discriminating processes itself, and not only of objective elements of differences between women and men. Indeed, occupational segregation could be the effect of the pressure of gender stereotypes on educational and working choices. Meanwhile, vertical segregation and the ‘glass ceiling’ may be considered the effect of: discriminating recruitment and promotion processes within organisations, an unfair distribution of care responsibilities within the family, a shortage of care services and sometime even tax policies that tend to affect women’s labour market participation behaviour.
European policy has given the issue prominence, opting for a multi-faceted approach and adopting a policy framework within which national governments and social partners can operate.
This report aims to contribute to research at European Union level by:
- providing an overview of national-level analysis on the adjusted and unadjusted gender pay gap as evidenced through national research studies, and mapping to what extent national research includes evidence on the role of the social partners in influencing the gender pay gap;
- identifying policies and initiatives of government and the social partners on how to address the gender pay gap;
- identifying good practices on how to prevent and tackle the gender pay gap.
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