New study examines persistence of gender pay gap

In September 2009, the Equality Authority and the Economic and Social Research Institute issued a report on the gender pay gap in Ireland in 2003. It revealed an unadjusted gap between men’s and women’s hourly wages of 22%, which is mostly due to gender differences in observable characteristics, such as education levels, labour market experience, job and company characteristics. However, when accounting for such factors, the remaining unexplained gap was nearly 8%.

About the study

A new study on the gender wage gap (515Kb PDF) published in September 2009 by the Equality Authority (An tÚdarás Comhionannais) and the Economic and Social Research Institute (ESRI) would seem to offer the most accurate and comprehensive assessment of the gender pay gap in Ireland to date. ESRI published previous research on the gender pay gap in Ireland in 2000 (IE0011160F). The new research uses data that provides unique information on both employee and employer characteristics to assess the size and nature of the gender pay gap in Ireland. The dataset – drawing on the 2003 National Employment Survey (NES) – allowed for identifying the following aspects:

  • the size of the gender pay gap for all employees;
  • the nature of the gap in full-time and part-time employment;
  • the importance of various industrial relations policy factors, such as collective bargaining and trade union membership, on the gender wage gap;
  • the factors that contribute to the gender pay gap within both occupations and sectors of the economy.

Key findings

One of the findings was that the unadjusted, observed or ‘raw’ gap between men’s and women’s hourly wages in 2003 was about 22% for all employees. However, about two thirds of the observed gap was due to differences in observable characteristics between men and women, notably different levels of education and labour market experience, as well as job and company characteristics. When taking into account such factors, the remaining adjusted (or unexplained) pay gap was close to 8%.

Factors influencing pay gap

For full-time employees, the unadjusted gap amounted to about 18% and the adjusted gap stood at just under 7%. For part-time employees, the unadjusted wage gap was around 6%, while the adjusted gap was higher, at 10%. The difference in the labour market experience and participation levels of men and women – which widened the gap by three percentage points (equivalent to 14% of the raw gap) – was the largest single influence in explaining the gender pay gap. Higher levels of educational attainment among women helped to reduce the wage gap, but this factor alone was not sufficient to compensate for the effects of labour market experience or participation on the extent of the wage gap. Many other factors – such as a higher incidence of supervisory responsibility, longer job tenure and higher trade union membership among men, and a higher incidence of part-time work among women – also increased the pay gap.

Positive influence of collective bargaining

Centralised wage bargaining, specifically the implementation of the national wage agreement, benefited women in both full-time and part-time employment. The study found that the existence of some family-friendly policies within companies, particularly career breaks, helped to reduce the gender pay gap. However, this result was only evident regarding full-time employment. Working flexitime had a neutral impact on the pay gap, while a greater concentration of women in part-time work, which is the most common form of flexible working time arrangements, was found to increase the gender pay gap by almost two percentage points.

Occupational and sectoral analysis

An occupational analysis showed that the unadjusted pay gaps across the eight occupations examined are broadly similar. However, much larger variations were apparent in terms of the adjusted gap, which reflected substantial differences in the role of observable characteristics – for example, education, labour market experience, family structure and organisational characteristics – across occupations. The adjusted wage gap varied from about 2% in clerical occupations to 21% for plant and machine operators.

Regarding the distribution across sectors, the raw gender pay gap showed great disparities, ranging from 13% in the hotels and restaurants sector to 46% in the education sector. The adjusted wage gap was somewhat less significantly distributed across the sectors under examination: ranging from under 1% in the transport and communications sector to 20% in construction.

Industrial relations policy implications

In terms of policy implications, the research provides evidence that expanding availability of career breaks for women working full time would improve their relative pay. The research also demonstrates that social partnership arrangements, through the implementation of national wage agreements, have helped to standardise pay both within and across companies and sectors, and this in turn has improved the relative position of women across the labour market.

Tony Dobbins, National University of Ireland (NUI) Galway

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