Tackling the gender pay gap in the EU

Despite many years of equal pay legislation, the gender pay gap was just over 16% in the European Union in 2010, with wide variations between Member States from 0.9% in Slovenia to 27.7% in Estonia. Various inter-related factors contribute to the gap and the European Commission is committed to reducing it. Its actions include legislation, equality strategies, measures to help companies to implement equal pay, and awareness-raising events.

Introduction

According to the most recent data which relates to 2010, the gender pay gap (the difference between men’s and women’s pay, based on the average difference in gross hourly earnings of all employees) remains at 16.2% in the European Union.

The data on the gender pay gap is based on the methodology used for the Structure of Earnings Survey (SES), which is carried out every four years by Eurostat. The gender pay gap is referred to officially as the unadjusted gender pay gap, as it does not take into account all the factors that influence pay, such as differences in level of educational attainment, labour market experience, hours worked and type of job. However, even when these factors are taken into consideration, more than half the gender pay gap is unexplained.

Extent of gender pay gap

According to a new European Commission publication, Tackling the gender pay gap in the European Union (746KB PDF), the gender pay gap varied considerably between EU Member States in 2010 from 0.9% in Slovenia, 4.5% in Poland and 5.3% in Italy, to 27.7% in Estonia, 24.0% in Austria, 22.3% in Germany and 22.0% in Greece (see table below).

Note: *Data for Greece relates to 2008.

Source: European Commission (2013)

Causes of gender pay gap

A range of interrelated factors are thought to contribute to the gender pay gap. These include:

• simple direct discrimination against women in the workplace;
• indirect discrimination where a policy or practice, although not designed to discriminate, results in unequal treatment between men and women.

Other causes include:

• sectoral segregation, with women dominating lower paid sectors such as healthcare and social care;
• women working on a part-time basis or working shorter hours in order to balance unpaid work and childcare;
• workplace practices and pay systems such as access to training and development, and pay systems that result in different rates of pay for men and women;
• undervaluing of the work and skills of women;
• under-representation of women in politics and the economy, and in particular in senior positions;
• gender roles and traditions that may influence the educational or training path taken by women.

Actions to narrow gender pay gap

The European Union has been working to try to narrow the gender pay gap since the Treaties of Rome in 1957. Most recently, the European Commission drew up a strategy for equality between women and men, which runs from 2010 to 2015 and includes a section on equal pay. Here the Commission makes a commitment to:

• explore possible ways to improve the transparency of pay, in conjunction with social partners;
• 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.

So far, three Equal Pay Days have been held on 5 March 2011, 2 March 2012 and 28 February 2013. The exact timing of the event depends on the average EU gender pay gap – its date represents how far into the year a woman must work, on average, to earn as much as men did in the previous calendar year - and so it has been held earlier in the past three years to represent a slight reduction in the gender pay gap. In 2013, however, it will be held on 19 April. See the European Commission press release issued on the last Equal Pay Day for more information.

At national level, a range of actions to try to close the gender pay gap have been put into place over the past few years.

• Strategies on gender equality and equal pay. In Estonia, an action plan to reduce the gender pay gap was approved in 2012. The plan is based on improving the implementation of existing legislation on equality, improving reconciliation between work and family life, promoting gender mainstreaming, reducing gender segregation, and analysing organisational practices and pay systems in the public sector
• Gender equality reports. In Belgium, the government has published an annual report on the gender pay gap since 2007.
• Requirements for action at company level. This can take the form of gender equality plans and audits, which allow companies to measure their progress in terms of gender equality and equal pay. In some countries, such as Austria, Belgium and Sweden, there is a legal requirement for companies to publish equality statistics on a regular basis.
• Legislation and collective agreements. A number of countries have introduced provisions that relate to pay transparency and equal pay provisions in collective bargaining. In France, for example, the law makes it compulsory to bargain on gender equality and requires companies to report on pay and plans to close the gender pay gap.
• Tools to encourage pay transparency. A range of such tools exists in countries such as Austria, Germany, Luxembourg and Switzerland, allowing companies to check whether equal pay is being implemented.
• Equal pay days. Many countries hold regular equal pay days to raise awareness of the gender pay gap and to maintain dialogue with government representatives.
• Guidance and job evaluation. Evaluating jobs in a gender-neutral way is a key approach to narrowing the gender pay gap. For example, a gender-neutral job evaluation method has been produced in the hotel and restaurant sector in Portugal. In the UK, a statutory code of practice on equal pay provides guidance on how to implement legislation on equal pay.

Commentary

Reducing the gender pay gap is a priority for the EU, as equality is a fundamental EU right. Furthermore, equality and equal pay is considered a necessary condition to achieving growth, employment, social cohesion and competitiveness in the EU. It will probably take a considerable time to close the gender pay gap across all countries; at EU level, the debate centres on how to accelerate this process and what means to employ to achieve this.

References

Eurostat (2010), Structure of Earning Survey 2010 (203KB PDF), Eurostat, Luxembourg.

European Commission (2010), Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Strategy for equality between women and men 2010–2015. COM(2010) 491 final, European Commission, Brussels.

European Commission (2013), Tackling the gender pay gap in the European Union (746KB PDF), Publications Office of the European Union, Luxembourg.

Andrea Broughton, Institute for Employment Studies