The Male/Female Wage Gap in Ireland

Equal opportunities between Men and Women The Male/Female Wage Gap in Ireland The European Employment Strategy initiated in 1998 has become increasingly focused on gender wage inequality. Section 4 of the report describes recent trends in the size and structure of the gender pay gap in Ireland, with particular reference to the picture before and after the introduction of the EAP (1997 and 2000). Analysis of the pay gap is based on data from the Living in Ireland Surveys, 1994, 1997 and 2000, which is a comprehensive survey providing information on earnings, education, labour market experience and other characteristics. Gross hourly earnings for men and women were constructed from this survey, allowing us to measure the gender pay gap up to 2000. We find that the overall gender wage gap been decreasing since 1987 and stood at 14.7 % in 2000. However the pace of this reduction appears to have slowed since the introduction of the Employment Strategy in 1998, and the gap fell by only .3% between 1997 and 2000. A breakdown of men and women's hourly earnings by different personal characteristics, shows that the male/female wage gap widens as age increases, and is narrowest in the lowest age category, under 25. There is a negative relationship between education levels and the gender pay gap, in that the gap is narrowest for those with degrees and widest for those with no secondary qualifications. However even among those with degrees, women earn 15% less than men. The size of the gender pay gap is also found to vary substantially within occupations and industrial sectors. The widest gaps were observed in managerial, sales/service and elementary occupations and in the hotel/restaurant sector, transport & communications and finance/business sectors. The narrowest gaps between men and women's hourly earnings occurred in professional and associate professional/technical occupations and in the health, education, public administration sector (largely the public sector). Between 1997 and 2000 there was a marked decline in the male-female wage ratio among younger employees, those with less than 5 years work experience, those in elementary occupations and in associate professional/technical occupations. Significant declines in women's relative earnings were also evident in the hotel/restaurant industry and in the transport/communications sector. Standard regression techniques are used to examine the factors which influence wages and the gender pay gap. The main finding is that women get paid 12% less than men, even when a wide range of personal and job characteristics are held constant. Differences in men's and women's labour market histories (years of accumulated work experience and years out of the labour market) reduced the wage gap substantially, but when we controlled for occupation, sector and qualifications this gap increased again. When we analyse whether the effects of the explanatory variables differ for men and women, we find that being married has a much more positive effect on male earnings than female earnings. The fact that years of work experience and years out of paid work have a strong influence on the pay gap, suggests that policies under the employment strategy to 'reconcile family and working life', should reduce this gap by reducing women's time out of the work-force. A number of policy changes mentioned in the EAPs (e.g. increased paid maternity leave and increased expenditure on childcare) post-date our 2000 data, and hence it is difficult to comment on their effectiveness. Labour force participation has increased rapidly among women over the period 1997-2000, however there is some evidence that the potentially beneficial effects of this change have been cancelled out by the less favourable characteristics of those who have (re)joined the workforce. Finally, our figures suggest that the National Minimum Wage has had little effect on the mean gender pay gap to date, in part because the differences in pay between men and women in the bottom two deciles was already relatively narrow before its introduction. Overall, the very small decline (0.3%) in the gender pay gap from 1997 to 2000, suggests the Employment Strategy and EAPs have had little impact on this important area of gender inequality. In fact, another element of the strategy- improvements in female participation and employment rates- may have indirectly contributed to the slowdown, although these may have a more positive effect over the longer term.