New findings on gender pay gap

In mid July 2007, the Ministry of Labour and Social Insurance presented to the members of the Equality Commission the interim results of a study on the pay gap between men and women in Cyprus. The study contains some disappointing results in relation to the current situation for both women and men, as well as preliminary proposals for addressing the issue.

On 11 July 2007, the Department of Labour Relations, part of the Ministry of Labour and Social Insurance (Υπουργείου Εργασίας και Κοινωνικών Ασφαλίσεων, MLSI), presented to the members of the Equality Commission the interim conclusions of a study entitled Analysis of the pay gap between men and women in Cyprus and practical recommendations for reducing it. The purpose of the meeting was to exchange views, mainly with regard to the proposed policy measures to be implemented at national level, since this remains the only unfinished part of the study. In this context, the study, undertaken by an external consultant, was expected to be completed by the end of July 2007. The results of the study will be sent to all parties involved, so that they can take the appropriate measures and initiatives to reduce the gender pay gap.

Study findings

The gender pay gap in the economy as a whole stands at 24%, which puts Cyprus at the top of the EU Member States in terms of wage differences. Of particular interest is the difference in the size of the pay gap between public and private sectors. The pay gap is quite small in the public sector at 3.8%, but dramatically higher in the private sector at 30.6%. In the semi-state sector, the gap is 29.3%. In the semi-state sector, three quarters of the pay gap can be explained by differences in characteristics – personal, job or enterprise related – between the sexes; only one quarter of the pay gap can be attributed to discrimination between the sexes. In other words, if women’s characteristics were the same as men’s, the pay gap would automatically fall to 6.8%. It is also important to note the differences seen in the private sector, where the pay gap appears to be wider in the manufacturing industry, trade, transport and communications, as well as in business services. Taking the age factor into account, the pay gap appears to widen gradually with age. Thus, it is lower among young people at around 5%, increasing to 25% in the 35–55 years’ age group and rising to even higher levels among those aged 56 years or older. Other findings of the study reveal the following:

  • the pay gap is lower among workers with a technical or third-level education;
  • the concentration of women in certain sectors of production has a negative effect on the average sectoral wage;
  • by the end of a person’s career, the wage gap shrinks to nothing as length of service with the same employer increases;
  • overtime (an important factor in raising men’s pay but not women’s) helps widen the pay gap.

Factors determining pay gap

The report concludes by listing key factors which can influence the pay gap:

  • Better education for women can reduce the gap.
  • Previously accumulated job experience widens the pay gap: when hiring, employers place greater importance on men’s previous experience than on women’s.
  • Prior service with the same employer widens the pay gap. Women have less professional experience: they leave their job more frequently to take up other positions and interrupt their careers more often due to family obligations.
  • The discrimination bonus offered by the labour market to women of Cypriot nationality reduces the pay gap.
  • Trade union organisations, which exercise their bargaining power at both enterprise level and sectoral level, favour men’s wages over women’s, thus increasing the wage gap;
  • The concentration of women in traditional female occupations increases the pay gap.

Surprisingly, another factor that affects the pay gap in Cyprus is the increase in women’s wages compared to men’s in those occupations where there is increased demand from employers for female employees – most often in jobs traditionally performed by women.

Measures to narrow pay gap

The policy measures proposed for narrowing the gender pay gap can be divided into three categories:

  • equal pay policies, which target direct and indirect pay discrimination, and which are mainly legislative in nature;
  • equal opportunity policies, which aim to encourage and help women to remain in employment and to combat job segregation;
  • wage-related measures, which aim to combat wage inequality and improve low-paid and/or women’s occupations.

Elias Ioakimoglou, Cyprus Institute of Labour (INEK/PEO)

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