Gender pay gap

Eurostat, the statistical office of the European Communities, uses the following definition of the gender pay gap: ‘The gender pay gap is given 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. The gender pay gap is based on several data sources, including the European Community Household Panel (ECHP), the EU Survey on Income and Living Conditions (EU-SILC) and national sources. The target population consists of all paid employees aged 16-64 that are at work 15+ hours per week’.

The unadjusted gender pay gap is the figure obtained before adjusting for observed characteristics, such as individual characteristics such as age, education, the number of children, job tenure and occupation, as well as workplace characteristics such as the economic sector and place of employment or the existence of a collective agreement. While singling out the contribution of all of these factors in explaining the gender pay gap, the remaining part is interpreted as being ‘discriminatory’ in nature.

The unadjusted gender pay gap is considered to be an important indicator in monitoring the inequality in pay between men and women in Europe. The most recent Eurostat figures for the unadjusted gender pay gap, which are provisional and relate to 2009, put it at 17.1% on average in the EU27, slightly less than the 17.6% recorded for 2008. There are wide variations in the gender pay gap between EU Member States, ranging from 2% in Malta to over 25% in Estonia, Austria and the Czech Republic (2008 figures – 2007 for Estonia).

The reasons for the existence and size of the gender pay gap are varied and may differ considerably from one Member State to another; they include the kind of jobs held by women, the effects of career breaks or part-time working due to childbearing, a tendency to work in lower paid industries and sectors with less negotiating power, and decisions in favour of family life. A study on the gender pay gap carried out by Eurofound in 2010 notes that ‘the list of factors used to explain the gender pay gap is long and relationships among them complex’. This study also notes that over the past few decades, researchers have adopted relatively standardised methods for assessing the gender pay gap. Overall, studies have 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.

The 2010 Eurofound study mapped studies on the adjusted gender pay gap around the EU (a figure that is adjusted to take into account observed differences, such as levels of education and labour market experience, as well as job and company characteristics, that might explain the gap), finding that this ranges from 4% in Denmark to 30% in Cyprus. However, the study also notes that adjusting for observed differences only might be misleading when trying to explain the gender pay gap and addressing the level of discrimination. Both horizontal and vertical segregation – or the fact that women tend to choose lower paid professions, reach glass ceilings within their professions, or see their jobs being valued less – which are very often found to be the major reasons for a gap.

The gender pay gap has been a policy concern at European Union level for some time. In 2003, the European Commission stated that one of the objectives of the European Employment Strategy was ‘to achieve by 2010 a substantial reduction in the gender pay gap in each Member State, through a multi-faceted approach addressing the underlying factors of the gender pay gap, including sectoral and occupational segregation, education and training, job classifications and pay systems, awareness raising and transparency’. Further, in 2006, the Commission published a Roadmap for equality between women and men 2006–2010, which set as a priority the elimination of the gender pay gap, followed in 2007 by a Communication on Tackling the pay gap between women and men, which discusses a number of ways to address the gender pay gap, including legislation, employment policies, encouraging employers to respect equal pay and the exchange of good practices at EU level.

These were followed in 2008 by a European Parliament resolution, which made recommendations to the Commission on the application of the principle of equal pay for men and women, including the availability of analyses and the request for transparency, work evaluation and job classification, the role of equality bodies, the prevention of discrimination, gender mainstreaming, the use of sanctions and streamlining of EU regulation and policies. In a more recent resolution, on equality between women and men in the European Union, dating from 2010, the European Parliament criticised the persistence of the gender pay gap in Europe, demanded a better implementation of the principle of ‘equal pay for equal work’ and deplored the fact that the European Commission had not yet made a legislative proposal on that subject.

Most recently, the European Commission launched a Strategy for equality between men and women 2010-2015, one of the priorities of which is to promote equal pay for work of equal value in the EU. In this, the Commission acknowledges that the gender pay gap still exists, stating that there are many causes of this, in particular segregation in education and in the labour market. In order to contribute towards eliminating unequal pay, the Commission states that it will:

  • with social partners, explore possible ways to improve the transparency of pay;
  • support equal pay initiatives in the workplace such as equality labels, ‘charters’ and awards;
  • institute a European Equal Pay Day;
  • seek to encourage women to enter non-traditional professions, for example in the ‘green’ and innovative sectors.

See also: direct effect; discrimination; equality between women and men; gender equality; horizontal direct effect; part-time work; pay; women in the labour market.

Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.
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