Wage disparities between men and women, regions and occupations

The composition of the labour market determines the wage structure of the Spanish economy. In December 2006, the Spanish National Institute of Statistics published the ‘Annual wage structure survey 2004’, which estimated the average annual wage of a Spanish worker at €18,182 for that year. However, considerable wage differences persist within the labour market. This is related to several variables; for instance, permanent employment contracts, full-time jobs, higher qualified occupations and adult wage-earners are better paid than other workers. From a gender perspective, it must be highlighted that women’s salaries in all sectors are usually much lower than those of their male counterparts.

The Spanish National Institute of Statistics (Instituto Nacional de Estadística, INE) recently published the provisional results from the latest Annual wage structure survey 2004 (in Spanish) (Encuesta Anual de Estructura Salarial 2004). This survey included information on salary levels as well as information on the differences according to sex, age, sector, occupation and type of contract. The survey comprised data from the files of the Spanish Social Security Agency (Agencia Nacional de la Seguridad Social, ANSS), the Quarterly survey on labour costs and the tax authorities. It shows significant progress in the availability of data on this subject, since surveys on wage structure used to be established only every four years; the last one refers to 2002.

The composition of the Spanish labour force has been changing over the past few years. There has been a notable increase in the proportion of female workers and university graduates in the labour force. At the same time, job tenure levels, derived from different reforms implemented in order to reduce costs of hiring and firing, are also influencing the labour force profile. Research recently published by the Spanish Central Bank (Banco de España, BDE) revealed a slight decrease in wage inequality during the last decade in Spain (ES0609019I), which the report attributes mainly to changes in wage structure, specifically changes related to reduced investment returns to education and also to age factors.

However, the Annual wage structure survey 2004 shows that considerable wage disparities persist across the Spanish labour market. With an annual gross salary estimated at an average of €18,182 per worker for 2004, the main wage disparities centre around sex, region, occupation and type of labour.

Gender and age

From a gender perspective, men earn more than women. Indeed, the annual average salary for women in 2004 was 71.3% of that of men, and some 48.1% of women earned less than €12,000 while this was the case for only 20.1% of men. When looking at incomes over €30,000, 22.8% of men fell into this category, but only 6.3% of women. It must be noted that wage differences are not solely due to wage discrimination but also to other labour factors such as the type of employment contract, occupation, seniority and working time.

As far as the age of wage-earners is concerned, the general trend shows that the older the employees are, the higher their salary, since they are normally gaining seniority and experience in the enterprise. Furthermore, the gender pay gap increases among older age groups, mainly since younger women are better qualified than older female workers (see Table).

Wage structure, by sex, age, sector, occupation, employment contract and working time
Wage structure, by sex, age, sector, occupation, employment contract and working time
  Total labour force average wage (€) Total (%) Men average wage (€) Female/male (%) Women average wage (€)
Average wage 18,182.44 100.00 20,597.71€ 71.33 14,691.84
Age group          
under 20 years 9,869.24 54.28 10,836.53 75.04 8,131.24
20-29 years 13,734.43 75.54 14,985.18 81.42 12,200.23
30-39 years 18,362.51 100.99 20,449.69 75.50 15,439.33
40-49 years 21,931.13 120.62 24,991.15 68.39 17,091.14
50-59 years 25,169.59 138.43 28,832.46 62.97 18,156.26
60 years or above 22,551.57 124.03 25,145.24 63.17 15,884.61
Sector of activity          
Manufacturing 21,000.67 115.50 22,828.59 70.51 16,096.49
Construction 17,634.78 96.99 17.882.10 84.20 15,056.96
Services 17,479.91 96.14 20,804.78 69.52 14,463.37
Group A 49,292.46 271.10 54,862.24 64.93 35,623.85
Group B 34,004.18 187.02 36,381.49 N.A. N.A.
Group H 11,842.71 65.13 13,538.33 79.37 10,745.47
Group S 10,807.22 59.44 13,977.62 66.89 9,349.28
Type of contract          
Permanent 21,105.31 116.08 24,203.30 68.92 16,680.95
Temporary 13,803.21 75.92 15,260.81 76.40 11,658.66
Working time          
Full-time 20,081.39 110.44 21,522.08 80.88 17,406.40
Part-time 8,382.95 46.10 9,796.20 79.77 7,813.99

Notes: N.A. Information not available. * Four out of the existing 17 occupational groups have been selected, with the highest and lowest wage respectively. Group A: managers in public administration and of enterprises with 10 employees or more. Group B: general managers of enterprises with less than 10 employees. Group H: food industry and personal services workers. Group S: non-qualified services workers (except transport).

Source: INE, 2004

Regional and sectoral disparities

Salaries are not evenly distributed across Spain. In fact, the wage profile of the various regions moves in a range of /- 20% around the national annual average wage of €18,182 per worker for 2004. In four autonomous communities, workers earn higher incomes than the national average, namely: the region of Madrid (annual average wage of €22,162 per worker), followed by three northern areas, the Basque region (€21,751), Navarre (€20,450) and Catalonia (€19,475). The remaining 13 communities fall below the national average, with the regions of Extremadura (€15,215), Canary Islands (€14,991) and Murcia (€14,859) being at the lower end of the scale. In almost all regions, the average wage of women was 25%–35% below that of men.

Manufacturing is the only sector which exceeded the average annual wage in 2004, showing an average wage of €21,001. Nevertheless, wage disparities related to sex persist in all sectors. The services sector, with a proportion of 52.4% of female workers, shows the biggest wage disparity, whereas construction reports fewer wage disparities although only 8.7% of wage-earners are women.

Occupation and types of employment contract

Occupation is one of the variables which most influences the wage level. Generally speaking, jobs involving management positions and requiring higher educational levels (third level qualifications especially) are better paid than jobs in the services sector and occupations that require a lower educational qualification. For instance, earnings of managers in public administration and of enterprises with 10 employees or more (Group A, see Table) were 171.10% above the average level in 2004, followed by general managers of enterprises with less than 10 employees (Group B), earning 87.02% above the average. Conversely, unqualified workers in the food industry and services sector (Groups H and S) earned 34.87% and 40.56% less than the average wage respectively. As was found according to sector, women earned less than men across the board.

In relation to the type of employment contract, permanent workers earn more than those on fixed-term contracts. In particular, temporary agency workers earned a salary 35% lower than workers holding a permanent employment contract in 2004. Interestingly, regarding the wage disparity of temporary agency workers, the pay gap is slightly smaller for women than for men.

Finally, working time is a decisive factor determining the wage structure in Spain. People in part-time jobs – both men and women – earned half of the average annual wage in 2004. In fact, full-time workers earned on average €20,081 a year as opposed to €8,383 earned by those working part time.

Arantza García de Lomana and Antonio Corral, IKEI

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