The Gender Pay Gap
To adjust or not to adjust?
|The advantages of an unadjusted pay gap calculation||The advantages of an adjusted pay gap calculation|
|* It captures the actual pay gap experienced by women.||*It captures the pay gap after certain factors such as experience and education have been taken into account that might explain a difference.|
|* It is unaffected by differences such as education and experience which themselves may be as a result of discrimination. By not adjusting for these factors it recognises that if education and opportunities for experience are not equal then their effects should not be removed from the calculation as it may understate the pay gap.||* It enables the pay gap calculation to identify other factors that might explain the difference by removing the effect of variables used in the adjustment. If legitimate causes for a pay difference are removed it suggests the remaining effect is likely to be discriminatory.|
|* It is a more typical, straightforward measure and therefore easier to compare with other data sets for international comparisons.||* It is a more detailed measure that might be particularly valuable for comparisons within sectors or occupational groups.|
|* Some measures – such as experience – can be more difficult to find an appropriate proxy and there is limited agreement as to what factors should be adjusted.|
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University of Exeter online course,
Understanding Gender Inequality
- mean gender pay gap in hourly pay
- median gender pay gap in hourly pay
- mean bonus gender pay gap
- median bonus gender pay gap
- proportion of males and females receiving a bonus payment
- proportion of males and females in each pay quartile
Causes of the gender pay gapThe causes of the gender pay gap are multiple and diverse, and incorporate influences from society, government policies, organisational policies, and individual choices made in light of social norms and expectations.These include
- Unconscious bias that leads women to receive unfavourable treatment.
- Time off for motherhood and skills loss that inhibits career progression.
- Family responsibilities that impact career development or recognition
- Prevalence of women in part-time work, which tends to be lower paid than full-time work.
- Occupational segregation where women are disproportionately represented in lower paid professions.
- Vertical segregation, where men are disproportionately represented in higher paid positions.
- Undervaluing women’s work (and therefore paying less), or
- Pay discrimination, which may result from direct discrimination – paying a woman less because she is a woman, or indirect – that could result from the undervaluing of work typically undertaken by women.
Why report the pay gap?The hope is that by reporting the data, and opening it to public scrutiny, organisations will take action to address the gap. It provides numerical evidence for pay gaps that is likely to have more impact than anecdotal commentary. It also enables employees to make informed choices about their prospective employer, although this should not be overstated, as many employees are not able to relocate for their employment, and women are disproportionately likely to find themselves having to select an employer from their immediate locality in order to manage their caring responsibilities alongside their work.In the UK, organisations are encouraged to develop an action plan to address the gap, and advice is given on how this can be achieved. We’ll explore organisational practices that can increase equality and reduce the pay gap in week four.
The effects of pay gap report?To-date gender pay gap reporting hasn’t resulted in significant improvements, but it is early days. The UK reporting exercise has completed its second year of reporting and the evidence suggests that fewer than half of the reporting organisations have managed to reduce their pay gap, and in many cases the pay gap has increased to the detriment of women. There are also instances where the pay gap favours women, but these are the minority and the gaps tend to be comparatively small.Evidence from Europe and elsewhere also suggests that pay gaps remain and are closing at a very slow rate. The BBC have an animated summary setting out the latest gender pay gap results. UK organisation level data can be found on the government website.The closing of the pay gap is clearly an equality concern, but it is also associated with productivity. The gender pay gap indicates that women struggle to achieve the higher paid positions, which is a loss of talent. To attract and retain this talent organisations need to have appropriate recruitment processes, flexible working practices and job design, for example. We’ll return to these in week four.
Additional resources:Equal Pay Portal, provides information and advice on equal pay and the gender pay gap in the UKStatistics Explained is an official Eurostat website presenting statistical topics in an easily understandable way. This link provides information regarding the Gender Pay Gap in Europe.An article considering the Motherhood penaltyThis animation introduces the key concepts of Unconscious Bias
This is an additional video, hosted on YouTube.
Understanding Gender Inequality
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