The unadjusted gender pay gap in the EU

Didier Dupré, Eurostat unit F2 [email protected]

UNECE Work Session on Gender Statistics SESSION I: Gender differences in economic security Sub-session A. Gender Pay Gap

26 April 2010

The Framework

  Inequality in pay between men and women remains high in EU 05/03/2010 (Women’s Charter): the European Commission announced its goal of significantly reducing the pay gap between men and women over the next five years   In the EU the unadjusted Gender Pay Gap (GPG) is: – A key indicator in the framework of the Commission Strategy for equality between women and men – A European Structural Indicator (Lisbon strategy) – A Sustainable Development Indicator (SD Strategy)  Defined at macro level for monitoring policies

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Eurostat – The unadjusted Gender Pay Gap in the European Union

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The Definition

 Agreed with DG EMPL and the NSIs - the GPG is: – Unadjusted (no consensus / scientific evidence on adjustment method) – Calculated using average gross hourly earnings: • Hourly earnings: eliminates effects of differences in use of part time work, includes paid overtime (but excludes non-regular payments) • Average: arithmetic mean – Based on the EU harmonised four-yearly Structure of Earnings Survey (SES) + national estimates for the years between the SES benchmark years - NACE Rev 2 B to S excluding O, enterprises  10 employees  average gross hourly earnings of male paid employees  average gross hourly earnings of female paid employees GPG (%) = ----------------------------------------------------------------- average gross hourly earnings of male paid employees

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Eurostat – The unadjusted Gender Pay Gap in the European Union

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The unadjusted GPG, whole economy*, 2008, %

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

EU -2 7 EA -1 6 EE CZ AT NL DE EL LT CY UK SK FI FR CH HU NO SE ES IE DK BG LV LU PL PT MT RO BE SI IT * NACE Rev 2 B to S excluding O

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Eurostat – The unadjusted Gender Pay Gap in the European Union

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The non-adjustment effect (1)

Country « X » Industry, energy, construction Trade, transport, business, finance Education, health, social, personal services  Whole economy (NACE Rev 2 B to S excluding O) Average gross hourly earnings € Men Women 10.0

7.0

14.0

18.0

12.6

11.0

15.0

12.4

GPG %

30.0

21.4

16.7

1.6

Share of total employment % Men Women 50 15 35 15 100 35 50 100

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Eurostat – The unadjusted Gender Pay Gap in the European Union

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The non-adjustment effect (2), 2008

30

EE CZ

25 20

LT SK

15

HU LV EL IE DE CY

EU-27 /

FR

EA-16

ES FI BG LU

10

PL SI MT BE RO

5

IT

0 15 20

AT UK SE

25 30 35 40 45 50

employment rate of women with lower education %

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Eurostat – The unadjusted Gender Pay Gap in the European Union

NL

55

NO DK

PT

60

6

GPG by educational attainment, 2006

35 30 25

%

20 15 10 5 0 EU-27 EA-16 BE BG Lower education CZ EL Higher education FR

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Eurostat – The unadjusted Gender Pay Gap in the European Union LT UK

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GPG by age groups, 2006

35 30 25 20

%

15 10 5 0 EU-27 EA-16 -5 <30 years DK ES 30-39 years HU PL 40-49 years PT 50 years+ SK

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Eurostat – The unadjusted Gender Pay Gap in the European Union SE

8

Detailed breakdowns from SES: GPG calculator (*)

(*) Other characteristics required: sector of economy, occupation, size enterprise

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26 April 2010

http://ec.europa.eu/social/main.jsp?catId=835&langId=en

Eurostat – The unadjusted Gender Pay Gap in the European Union

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Towards an adjusted GPG ?

 Controlling for observable characteristics (in the SES) of workers and enterprises can provide a first indication of the contributions from different factors to the size of the GPG and of elements for possible adjustments    Self-selection effects (i.e. when only those women that can expect high earnings participate in the labour market) can be also modelled based on observable variables (in the SES)  Study on the "Development of econometric methods to evaluate the Gender pay gap using Structure of Earnings Survey data" launched by Eurostat in 2008 (Maastricht University) However, any survey provides only a limited number of observable variables and an adjusted GPG would not provide a fully comparable measure

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Some results from the 2008 econometric study (%)

DK DE IE EL ES IT Raw (*) GPG 21.3

(17.1)

27.0

(23.2)

17.8

(17.1)

21.7

(22.0)

18.4

(17.1)

4.3

( 4.9)

OLS (**) GPG 12.0

15.1

15.7

11.0

19.4

13.4

OLS (**) + self-selection (***) GPG 12.3

16.2

7.7

5.7

16.2

9.0

NL AT PT FI 23.4 26.9 8.1

21.6

(23.6) (25.5) ( 9.2) (20.0)

12.1

16.9

20.2

15.8

5.1

17.2

15.7

19.4

UK 25.3

(21.4)

13.5

16.1

(*) Unadjusted and from SES but using slightly different calculations as the

(Eurostat unadjusted GPG)

(**) Based on age, education, occupation, FT/PT, term of contract, private/public and size enterprise (**) Based on age, education, gender and its interactions with the 2 other variables

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35

Complementary analysis: dispersion, e.g., low wage earners*

30 25

%

20 15 10 5 0 EU -2 7 EA -1 6 BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI Men Women * full-time employees having annual gross earnings lower than two thirds of the annual full-time median gross earnings SK FI SE UK

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Conclusions: How to improve the pay gap analysis / monitoring ?

  Concept of equal pay for equal work: mainly at micro level Adjusted GPG: would not provide a fully comparable measure  How to progress ?

– Supplementary indicator to the unadjusted GPG: measuring an unadjusted gender pay gap using the median instead of the mean – Complementary analysis: e.g., wage dispersion – Further developments: access for researchers to the SES microdata in the Eurostat Safe Centre and to the SES anonymised microdata (CD-Rom)

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