Employment in Europe

1
Employment in Europe - Assessing gender pay gaps
in the EU -
Equal Pay in Europe seminar 12 December
2003 Manchester
European Commission Employment and Social
Affairs DG Unit A.1 Employment Analysis
2
Gender pay gaps in European labour markets

• Synthesis Report 2003 The Lisbon Strategy -
  Making Change Happen
• The Commission will launch an overall assessment
  in 2002 on the reasons why differences leading to
  a gender gap, including in pay levels, exist.
• Labour Supply Report Increasing labour force
  participation and promoting active ageing
• A strong initiative is required to reduce gender
  disparities in both public and private sectors.
  This would involve an overall assessment of the
  reasons including differences in productivity
  explaining the presence of more or less important
  pay gaps between men and women in each Member
  State reviewing constraints on labour market
  choices for women and men, in particular in
  connection with education systems, employer
  recruitment practices and the existing
  organisational and work cultures reviewing job
  classification and wage formation processes to
  eliminate gender bias and to avoid any
  under-valuation of work in women-dominated
  sectors and occupations, improve statistical and
  monitoring systems, increase awareness-raising
  and transparency on pay gaps.
• Employment in Europe 2002
• results of econometric analysis on factors
  associated with the gender pay gap

3
Gender pay gaps in European labour markets

• (Mincer-type) earnings regressions
• lnWita0 a1Xiteit
• lnWita0 a1Xita2genderieit
• Decomposition techniques (Oaxaca-Blinder and
  others)
• gender-specific regressions lnWit,gß0,g
  ß1,gXit,g?it,g, gm,f
• decomposition lnWit,m-lnWit,fBm(Xm-Xf)Xf(Bm-Bf
  )
• Bm(Xm-Xf) compositional effect (or explained
  part)
• Xf(Bm-Bf) differences in returns effect (or
  unexplained part)
• total and variable-specific contribution to the
  gender pay gap
• (Heckman-type) sample selection models
• IV techniques and controlling for endogeneity

4
Gender pay gaps in European labour markets

• Pooled sample on the basis of ECHP data 1995-98
• (excluding Germany due to missing information on
  sectors)
• Dependent variable
• gross hourly earnings (in Euro)
• Explanatory variables
• individual / demographic characteristics
  (gender age education etc.)
• family background (marital status children
  etc.)
• employment history (tenure on the job previous
  unemployment career breaks)
• job-related characteristics (sector occupation
  contract type job status)
• gender concentration of sector and occupation
• country-specific effects
• year-specific effects

5
Gender pay gaps in European labour markets
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Gender pay gaps in European labour markets
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Gender pay gaps in European labour markets
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Gender pay gaps in European labour markets
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Gender pay gaps in European labour markets
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Gender pay gaps in European labour markets
Private
Public
Total
B
92.7
87.3
97.9
DK
89.6
85.5
96.0
D
80.6
75.2
89.0
EL
86.8
78.3
99.1
E
85.7
79.9
87.7
F
89.2
81.9
93.7
I
91.4
90.6
108.1
IRL
80.2
75.8
89.3
NL
78.9
76.4
74.5
P
94.1
76.6
--
A
78.9
73.7
89.5
UK
75.7
70.6
79.7
EU
83.8
76.3
89.3
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Gender pay gaps in European labour markets
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Gender pay gaps in European labour markets
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Gender pay gaps in European labour markets
14
Gender pay gaps in European labour markets
15
Gender pay gaps in European labour markets
16
Gender pay gaps in European labour markets
Contributions to the gender pay gap due to
differences in the workforce composition
20
15
10
5
0
UK
NL
D
A
IRL
FIN
EU
E
EL
F
BE
I
P
DK
-5
17
Gender pay gaps in European labour markets
18
Gender pay gaps in European labour markets

• Factors contributing to increasing the gender pay
  gap in the EU
• the higher employment shares of women with short
  experience and tenure on the job, in
  non-supervisory positions and in smaller firms,
  as well as in relatively low paying sectors
• the lower remuneration for married women with
  children
• the lower remuneration for women with previous
  career interruptions
• the lower remuneration for women in
  female-dominated sectors and occupations
• the lower remuneration for women with high
  educational background, in part-time employment
  and in supervisory job status.

19
Gender pay gaps in European labour markets

• Factors contributing to reducing the gender pay
  gap in the EU are
• the higher employment shares of women with high
  educational background, in part-time employment
  and, in particular, in the public sector
• the more compressed earnings distribution across
  occupations for women compared to men
• the higher remuneration for women staying with
  their employer
• the higher remuneration for women working in
  small firms and in the public sector.
• Firm size, contract status and working time,
  however, are not found to have a significant
  impact on the EU-level gender pay gap.

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Gender pay gaps in European labour markets

• Looking at the contribution of differences in the
  workforce composition and differences in the
  remuneration it turns out that the gender gap of
  16 is mainly due to differences in the
  remuneration between men and women with a the
  same personal and job characteristics.
• But differences in composition are important and
  need to be tackled
• Example differences in the remuneration between
  men and women according to their family situation
  (inclusive of the number of children) explains
  about 4 of the overall gender gap.
• At MS level the contribution to the overall gap
  of differences in the remuneration varies
  considerably. But generally they explain most of
  the gender pay gap.

21
Gender pay gaps in European labour markets

• Employment in Europe 2002, Assessing gender pay
  gaps in the EU
• work by the Expert Group on Gender and
  Employment, 2002
• Commission Services Working Paper Gender pay
  gaps in European labour markets, 2003
• Annual Report on Equality between men and women
  in the EU

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Thank you for your attention.
Equal Pay in Europe seminar 12 December
2003 Manchester
European Commission Employment and Social
Affairs DG Unit A.1 Employment Analysis