26 April 2010

The unadjusted gender pay gap in the EUDidier Dupré, Eurostat unit F2

didier.dupre@ec.europa.eu

UNECE Work Session on Gender StatisticsSESSION I: Gender differences in economic securitySub-session A. Gender Pay Gap

26 April 2010 Eurostat – The unadjusted Gender Pay Gap in the European Union 2

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

The Framework

26 April 2010 Eurostat – The unadjusted Gender Pay Gap in the European Union 3

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

The Definition

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The unadjusted GPG, whole economy*, 2008, %

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

EU

-27

EA

-16

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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The non-adjustment effect (1)

Country « X » Average gross hourly earnings €

GPG %

Share of total employment %

Men Women Men Women

Industry, energy, construction

10.0 7.0 30.0 50 15

Trade, transport, business, finance

14.0 11.0 21.4 35 35

Education, health, social, personal services

18.0 15.0 16.7 15 50

Whole economy (NACE Rev 2 B to S excluding O)

12.6 12.4 1.6 100 100

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The non-adjustment effect (2), 2008

0

5

10

15

20

25

30

15 20 25 30 35 40 45 50 55 60

employment rate of women with lower education %

GP

G %

EE

CZ

IT

SIBEPL

NO DK

PT

ROMT

LU

NL

LVBG

UK

SE

AT

LTSK

EL

HU IE

CY

DE

FI

ES

EU-27 / EA-16FR

26 April 2010 Eurostat – The unadjusted Gender Pay Gap in the European Union 7

GPG by educational attainment, 2006

0

5

10

15

20

25

30

35

EU-27 EA-16 BE BG CZ EL FR LT UK

%

Lower education Higher education

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GPG by age groups, 2006

-5

0

5

10

15

20

25

30

35

EU-27 EA-16 DK ES HU PL PT SK SE

%

<30 years 30-39 years 40-49 years 50 years+

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Detailed breakdowns from SES: GPG calculator (*)

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

26 April 2010 Eurostat – The unadjusted Gender Pay Gap in the European Union 10

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

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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

Towards an adjusted GPG ?

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Some results from the 2008 econometric study (%)

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

DK 21.3 (17.1) 12.0 12.3

DE 27.0 (23.2) 15.1 16.2

IE 17.8 (17.1) 15.7 7.7

EL 21.7 (22.0) 11.0 5.7

ES 18.4 (17.1) 19.4 16.2

IT 4.3 ( 4.9) 13.4 9.0

NL 23.4 (23.6) 12.1 5.1

AT 26.9 (25.5) 16.9 17.2

PT 8.1 ( 9.2) 20.2 15.7

FI 21.6 (20.0) 15.8 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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Complementary analysis: dispersion, e.g., low wage earners*

0

5

10

15

20

25

30

35

%

Men Women

* full-time employees having annual gross earnings lower than two thirds of theannual full-time median gross earnings

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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)

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