In this section we draw on analyses of the Living in Ireland survey data to track changes in the gender pay gap and to highlight the sources of this gap. (This data set was described earlier in this section.) For this analysis of earnings we selected employees only, which includes apprentices and employees working either full time or part time. Employees were asked about their gross pay (including overtime) received in the last pay period. They were then asked the
periodicity of this pay, and how many hours worked during that period. This information was combined to derive a gross hourly wage for each individual. In some cases, this was not their usual pay, and these respondents were asked to provide their usual gross pay and usual hours. For these individuals hourly earnings is constructed from their usual pay and hours. This format means that regular overtime is included in the calculation, but irregular overtime, which leads respondents to classify their last pay packet as not ‘usual’, is excluded. These selections resulted in a sample of 1,975 male employees and 1,599 female employees for the analysis.
Table 3.4: Gender Wage Gap in Ireland 1987 – 2000, Living in Ireland Surveys
Hourly Wage £
F/M Ratio Male Female
1987 80.1 4.27 3.59
1994 82.8 7.71 6.38
1997 85.0 8.88 7.55
20001 85.1 10.28 8.75
1
The figures for 2000 here and in the following tables vary marginally from those in Russell and Gannon (2002) because of data revision.
The figures in Table 3.4 show how the gender pay gap has evolved over recent years. In 1987 the ratio of women’s mean hourly wage to men’s mean hourly wage was 80.1, representing a gap of 20 per cent. This gap declined slowly to 15 per cent in 1997. However, between 1997 and 2000 there was very little change so the mean pay gap still stands at 15 per cent.
Table 3.5: Male/Female Wage Differential by Educational Qualification
1994 ratio 1997 ratio 2000 ratio
No secondary qualifications 65.6 68.3 69.7
Junior/Group/Inter Certificate Level 73.3 75.5 76.0
Leaving Certificate/Diploma 80.5 81.9 82.5
Degree 84.9 90.6 84.7
The research on which the current summary is based investigates the size of the pay gap between men and women across a range of different personal and labour market characteristics (Callan and Russell, forthcoming). Here we focus on two factors that are particularly relevant to activities within the NDP, namely education and occupation.
MACRO-ECONOMIC BACKGROUND 45 Figure 3.1: Gross Hourly Wage for Men and Women by Educational Level,
2000
No sec quals Group/Inter cert. Leaving cert etc Degree
0 2 4 6 8 10 12 14 16 18 IR£ Male Female
In Table 3.6 we outline the extent of the gender pay gap across different occupational groupings. The results for 2000 show that the female/male wage gap is narrowest among those in professional occupations, where women earn 91 per cent of male hourly wages on average and among clerical workers where the ratio is 87 per cent. The widest gaps are observed in both high and low status occupations. Women managers and senior officials earn only 72 per cent of male managers’ earnings on average, representing a gap of 28 per cent. In sales and service occupations the gap reaches 32 per cent, while in elementary occupations the gap is 25 per cent. In the other occupational groups there were too few women to accurately measure the pay gap. The fact that the female/male wage gap is higher than the economy-wide gap in four of the seven occupational categories reveals that the differences within occupations are at least as important as differences across occupations in determining the overall wage gap.
Table 3.6: Male Female Wage Differential by Occupational Group
2000 Hourly wages £ 1994 ratio 1997 ratio 2000 ratio Male Female
Manager/senior officials 61.0 66.5 71.7 14.62 10.48
Professionals 82.6 94.0 91.2 15.95 14.55
Tech & assoc profess 92.1 92.4 81.2 11.63 9.45
Clerical 87.0 94.7 86.7 8.63 7.49
Service & sales workers 61.5 63.9 68.1 8.40 5.72
Agricultural workers (too few) (too few) (two few) 6.38 (too few) Craft workers (too few) (too few) (too few) 8.26 (too few)
Plant & machine operators 74.3 81.5 84.2 8.06 6.78
Elementary (m and n-m) 89.9 87.3 75.3 7.02 5.29
While tables of the type set out above can help to illustrate the impact of individual factors on the overall wage gap, a more systematic approach is needed to identify the total contribution of all such explanatory factors. The basic method here (described in Barrett et al. (2000) and due to Oaxaca (1973)) requires estimation of separate wage equations for men and women, linking hourly wage rates with labour market relevant characteristics such as the highest educational qualification achieved, years worked, years out of employment, region of residence (urban/Dublin/other) and whether or not the individual had obtained a qualification in a trade. The wage equations are reported in Callan and Russell (forthcoming). Given these estimates, it is possible to decompose the observed wage gap into three parts:
• a part which relates to differences in wages arising from years out of the labour force;
• a part which is explained by differences between the sexes in educational qualifications and other explanatory variables;
• a part which is unexplained.
The unexplained or “residual” portion of the gap is used as the basis for an index measuring how much higher women’s wages would be if their labour market relevant characteristics were rewarded in the same way as mens’. This is often termed an “index of discrimination”, though it cannot be taken as a precise measure of discrimination.18 The results of this analysis are reported in Table
3.7.
Table 3.7: Decomposition of Gender Pay Gap
1987 1994 1997 2000
Observed wage gap (logs) 0.289 0.171 0.198 0.175
of which % due to: % % % %
Years not worked 8.8 16.7 18.0 40.2
Other attributes 40.3 57.4 52.9 20.7
Residual (unexplained) 50.8 25.9 29.1 39.0
“Discrimination” index 15.9 4.5 5.8 7.1
Between 1987 and 1997 the proportion of the wage gap explained by factors associated with years not in paid work rose from almost 9 per cent to 18 per cent. This trend continued and strengthened with about 40 per cent of the gap due to “years not worked” in 2000. There was a sharp decline in the portion of the wage gap explained by other factors (principally educational levels and years worked). The role of the residual declined between 1987 and 1994 but has edged up since then, with the “discrimination” index reaching 7 per cent in 2000.