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News : Irish Last Updated: Sep 14, 2009 - 9:18:18 AM

Irish gender pay gap mainly related to child rearing responsibilities
By Finfacts Team
Sep 11, 2009 - 3:45:05 AM

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According to the European Parliament, in 2006, the number of female managers in the European Union was 32.6%. There was a rise in the number of women MEPs from 16.3% in 1979 to 31% in 2009. However, there is still a pay gap. Women in Europe earn on average 17% less than their male counterparts.

The most important factor in the continuing Irish pay gap between men and women is family responsibilities, research due to be published Friday shows. Simply, women generally have the main responsibility for child rearing.

The Equality Authority and the Economic and Social Research Institute (ESRI) will launch the report on "The Gender Wage Gap in Ireland: Evidence from the National Employment Survey 2003" today. The report should be available here sometime on Friday.

A report from the UK's equality watchdog, published last Monday said women in some of Britain's leading financial companies receive around 80 perc ent less in bonus and performance-linked pay than their male colleagues.

A survey of 50 finance firms found that women earned an average of £2,875 a year in performance pay compared to £14,550 for men, the Equality and Human Rights Commission (EHRC) said.

There was also a 39 per cent gap between women and men in annual basic pay, rising to 47 per cent when bonuses and other additional payments were added.

"The finance sector has one of the highest overall gender pay gaps in the UK economy," the commission said.

The EU25 included Belgium (BE), the Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Ireland (IE), Greece (EL), Spain (ES), France (FR), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE) and the United Kingdom (UK).

Using data from the 2003 National Employment Survey, during the boom when the jobs market was buoyant, the Irish research finds the “raw” gap between men’s and women’s hourly wages was about 22 per cent for all employees. About two-thirds of this gap was due to “observable” differences between male and female workers.

These included levels of education and labour market experience. Women tended to have higher levels of education, but men had more labour market experience, due to the fact they tended not take time out for “care duties."

The researchers said the gap between men's and women's pay has been a source of constant debate both nationally and internationally. This research uses data with vital and unique information on both employee and employer characteristics to assess the size and nature of the gender pay gap in Ireland. The dataset used in the report - the 2003 National Employment Survey (NES) - enabled the authors to identify:

  • the size of the gender pay gap for all employees

  • the nature of the gap in the full-time and part-time labour markets

  • the importance of various policy-related factors, such as collective bargaining and family friendly policies, on the wage gap

  • the factors that contributed to the gender pay gap within both occupations and industries.

The key findings are:

  • The observed or "raw" gap between men's and women's hourly wages was about 22 per cent for all employees. These are the types of statistics that are most commonly and regularly available on the gender pay gap. However, about two-thirds of the observed gap was due to differences in observable characteristics between men and women, such as different levels of education and labour market experience, job and firm characteristics, etc. When account is taken of such factors, the remaining adjusted (or unexplained) wage gap was close to 8 per cent.

  • For full-time employees, the raw gap was about 18 per cent and the adjusted gap was just under 7 per cent.  For part-time employees the observed wage gap was around 6 per cent, but the adjusted gap was higher, at 10 per cent. This suggests that part-time female workers are on the whole more qualified and experienced than their male counterparts.

  • The difference in the labour market experience levels of men and women - which widened the gap by 3 percentage points, equivalent to 14 per cent of the raw gap - was the largest single influence in explaining the gender wage gap. Higher levels of educational attainment among women did help to reduce the wage gap, but this factor alone was not sufficient to compensate for the effects of labour market experience on the gap.

  • Many other factors - such as a higher incidence of supervisory responsibility, longer tenure and higher trade union membership among men, and a higher incidence of part-time work among women - also widened the gap.

  • Centralised wage bargaining, specifically the implementation of the national wage agreement, benefited women within both the full-time and part-time labour markets.

  • The study found that the existence of some family-friendly policies within firms, specifically career-breaks, helped to reduce the gender wage gap. However, this result was only evident within the full-time labour market. Working flexitime had a neutral impact on the pay gap, while the greater concentration of women in part-time work, the most common form of flexible employment, was found to widen the gender wage gap by almost 2 percentage points.

  • In relation to the occupational analysis, the authors found that the raw wage gaps across the eight occupations examined were broadly similar. However, much larger variations occurred in terms of the adjusted gap, which reflected substantial differences in the role of observable characteristics (e.g. education, experience, family structure and organisational) across occupations. The adjusted wage gap varied from about 2 per cent in Clerical occupations to 21 per cent for Plant and machine operatives.

  • Regarding the sectoral analysis, the raw gender wage gap was widely distributed, ranging from 13 per cent in the Hotel sector to 46 per cent in the Education sector. The adjusted wage gap was somewhat more uniformly distributed: ranging from under 1 per cent in the Transport and Communications sector to 20 per cent in Construction.

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

Renee Dempsey, Chief Executive of the Equality Authority said:  "This research shows that we still have some way to go to achieve equal pay for men and women in Ireland.  Through a detailed analysis of the factors contributing to the pay gap - and how this varies by industry and by occupation - this study also helps identify the areas where action is most needed. It's clear that further progress in tackling the gender pay gap requires carefully targeted policies to promote gender equality within the workplace. We also need to facilitate greater sharing of care between men and women and to address the potential wage reductions associated with taking time out to raise a family."

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