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Category: Women / Community and Society / Business, Economics and Finance

39pc of gender pay gap in Australia 'unexplained': research

Thursday, 24 Mar 2016 14:25:14 | Alle McMahon

Research shows that men and women are "sorted" into jobs that pay differently throughout the economy. (Flickr: Steve wilson)

While the gender pay gap is narrower in Australia than it is in the United Kingdom and the United States, a larger proportion of is it unexplained, research shows.

Key points:

  • Australia has an "adjusted" gender pay gap of 3.9pc
  • Of that gap, 39pc is "unexplained"
  • Data shows primary cause of gender pay gap not workplace discrimination, but wider "sorting" of men and women into jobs that pay differently

Researchers from Glassdoor Economic Research in the US have released new data showing the state of the gender pay gap in the US, UK, Germany, France and Australia.

It shows that while Australian women earn on average a higher number of cents per dollar of male earnings than women in the US and UK, a larger proportion of the gap is "unexplained".

The study looked at a sample of 4,044 salaries anonymously reported on the Glassdoor website by Australian employees.

The information was collected via its online job-search service, which offers users a more comprehensive search if they share information about their previous experience.

Of that sample, 77 per cent were male and 23 per cent were female — which the research acknowledged was not necessarily representative of the overall labour market.

From that, Glassdoor estimated there to be a 17.3 per cent "unadjusted" gap in base pay between Australian men and women.

Although, when age, education and years of experience were considered, that gap shrunk to 12 per cent.

It narrowed further to an "adjusted" 3.9 per cent when a richer set of variables were examined, including the specific industry, occupation, state, year, firm size, company and job title.

In the UK the "adjusted" pay gap was 5.5 per cent, while the US figure was slightly lower at 5.4 per cent.

External Link: Glassdoor gender pay gap chart

To consider what proportion of that variation was "explained", the research considered the observable differences between workers. Anything "unexplained" was put down to either workplace discrimination — both intentional and unintentional — or unobserved worker characteristics.

It found Australia had the second highest rate of "unexplained" wage gap at 39 per cent, while both the US and UK were lower at 33 and 36 per cent.

'Sorting of men and women into different paying jobs to blame'

Glassdoor chief economist Dr Andrew Chamberlain said the paper's take-home message was that the gender pay gap was real, but that its primary cause was not workplace discrimination.

Overt discrimination alone does not explain most of today's gender pay gap.

Dr Andrew Chamberlain

Instead, it was the wider "occupation and industry sorting of men and women into jobs that pay differently throughout the economy".

"In all countries, the majority of the gender pay gap is explained," he said.

"The 'unexplained' part is less than half in every country Glassdoor Research looked at, suggesting overt discrimination alone does not explain most of today's gender pay gap."

Dr Chamberlain said in early studies, many economists assumed all unexplained differences between male and female pay were caused by overt workplace discrimination.

"But as research has accumulated, a more nuanced view has emerged," he said.

"The sorting of men and women into different occupations has emerged as one of the main drivers of the gender pay gap — a factor that has little to do to with overt bias and reflects complex social pressures that divert women into some professions and away from others.

"Additionally, research has shown [university] major, gender differences in pay negotiation, and gender norms around care-giving and the resulting need for workplace flexibility are all important drivers of the gender pay gap — none of which reflect overt discrimination.

"This points to the need for societal and public policy solutions that address these more subtle causes of gender pay differences."

External Link: Glassdoor gender pay gap report

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