Gender pay gap: fact or fiction?

18/11/2014 15:05

Do Dutch women earn less per hour than Dutch men when their position and mobility on the labour market are taken into account? Research by Statistics Netherlands shows that it is difficult to answer this question reliably on the basis of statistics. There are indeed differences between average hourly wage rates, even after correction for a number of explanatory variables. However, as it is not possible to correct for all significant aspects, it is unclear whether the remaining wage difference is caused by discrimination or by other factors. Overall, the wage gap is decreasing, but by most in the public sector. The wage difference is largest for employees with children.

Several factors affect hourly wage

Many factors have an effect on wage level: type of work, sector of work, type of company, but also personal performance factors and career ambition. How much someone earns per hour partly depends, as mentioned above, on the sector in which he/she works. Relatively more women work in sectors with a relatively low average wage, such as hotels and restaurants, culture, and health and welfare.

Average hourly wage and share of women by economic activity

Also, part-time work pays less per hour than full-time work, and more women than men work part-time. Three-quarters of women had a part-time job in 2012, compared with less than one third of men. Once figures are adjusted for this, women earned 18.6 percent less than men on average in 2012.

Statistics Netherlands’ study Same wage for same job takes a large number of these factors into account. Although this gives a more reliable picture of the actual wage gap between women and men, an unexplained difference still remains when all these factors are taken into account.

Remaining pay difference not necessarily result of wage discrimination

A number of factors are not taken into account in the correction for pay differences, such as personal ambition, motivation or negotiation skills; this information is not available or not quantifiable. There are no statistics on negotiation skills, for example, while there may well be differences between men and women in this respect. Ambition could be quantified by looking at the amount of overtime worked. Statistics Netherlands’ figures show that on average more men than women worked overtime in 2012: 39 and 31 percent respectively. It is probable that employees who work more overtime earn more on average per hour. These factors were not taken into account when adjusting the gap between women and men.

Employees who regularly work overtime

Gender wage gap closing by most in public sector

The corrected wage difference has narrowed in the course of the years, especially in the government sector, where it decreased from 7 percent in 2008 to 4 percent in 2012. One reason for this is that more women with high education levels were working in the government sector in 2012 than in 2008, while the number of men with higher education was lower. In 2012 two-thirds of women working in the public sector had higher education levels, for men this was just over half. In the private sector, the pay difference diminished between 2008 and 2010, but did not continue to do so between 2010 and 2012. There is hardly any difference between education levels of men and women in the private sector, or between the development in education levels in the last four years.

Corrected wage difference between women and men

Wage difference largest between employees with children

The corrected wage differences are largest for employees with children living at home, and then mainly in the private sector. On average, women in the private sector earned 14 percent less than their male colleagues in 2012. The wage difference was three times as small for employees who did not have children living at home. In the public sector, the range was smaller: 2.4 percent wage gap for employees without children at home, and 5.8 percent for those with children living at home.