Updated
16 November 2020
PDF version [300KB]
Penny
Vandenbroek
Statistics and Mapping Section
Introduction
This
guide provides a brief overview of gender wage gap statistics, including an
introduction to the key concepts and terminology, sample data sources and links
to other relevant information. A quick guide to Australian
earnings data is available from the Parliamentary
Library website.
What types of labour market gaps
exist?
In 2019, the International
Labour Organization (ILO) observed that globally, despite substantial progress
in women’s employment, there had not been any meaningful narrowing of
gender gaps at work for the past 20 years (p. 20). Gender gaps are observed
differences which tend to disadvantage women compared with men. Most often
discussed is the wage or pay gap; however, there are other labour market
indicators where gaps may occur. Women tend to have lower levels of labour
force participation and are more likely to work part-time. Women may have time
out of the workforce for childbearing and rearing, leading to career gaps,
stalled pay progression or lack of promotional opportunities. These and other
situations may contribute to the gender wage gap.
What are the key wage gap measures?
One of the most commonly cited measures of difference in
men’s and women’s work outcomes is the gender wage gap. The gender
wage ratio forms part of the ‘gap’ calculation and is outlined as
part of the measure.
Gender wage ratio
The gender wage ratio is the ratio of female to male wages,
or the earnings of women expressed as a proportion of the earnings of men. This
calculation may be based on any earnings source. It can also be used to compare
men and women on other employment characteristics, such as industry or
occupation. Useful sources are highlighted later in this guide.
|
Female earnings [divided by] male earnings
[multiplied by] 100
|
Gender wage (or pay) gap
The gender wage gap is the difference between parity (100%)
and the gender wage ratio. The ILO Global
Wage Report states that the gap is ‘usually calculated as the
margin by which women’s pay falls short of men’s’.
|
100% [minus] the gender wage ratio
|
Is there actually a gap?
Multiple studies have identified a small,
but persistent and unexplained gender pay difference, or ‘gap’.
This gap remains once a series of adjustments are made to accommodate a range
of factors, such as work hours, occupation or length of experience in a role.
For an Australian example, see ‘The real
gender pay gap’ (Policy, 34(2), p. 4), and internationally,
see International Monetary Fund (IMF), Pursuing
women’s economic empowerment (p. 4), or ILO Closing
the gender pay gap report (p. 2).
What is the estimated global wage
gap?
In 2018–19, the ILO estimated a wage gap of 16% to 22%
globally, depending on the measure used (mean hourly wages were at the lower
bound and median monthly wages at the higher bound). The ILO noted wide
variation in wage gaps across countries concluding that ‘on average, women
are paid approximately 20 per cent less than men’ (Global
Wage Report, p. 23). Using the average figure as an example, a 20% gap indicates
that for every $1 a male employee receives, a female employee receives 80
cents.
What is the estimated wage gap for
Australia?
The gap varies depending on the data source, unit of time,
use of an average (mean) or median, and inclusion or exclusion of additional
characteristics (for example, age, job tenure, educational attainment). Figures
1a and 1b (below) provide an example of the difference in the wage gap using median
weekly and hourly earnings. As women are more likely to work part-time, the use
of hourly rates more closely aligns with the pay received for hours worked,
resulting in a much smaller wage gap.
Figure 1a and 1b. Wage gap: median weekly and hourly
employee earnings, Aug 2019(a)
(a) Excludes owner managers of incorporated enterprises.
Source: ABS, Characteristics of Employment, Aug 2019.
What can the wage gap measure tell
us?
A measured wage gap can be used as a starting point for
questions about work type, methods of setting pay, value of work done and more.
Analysis can assist in identifying the factors behind size variations,
including when the gap is negative (that is, in favour of women). Figure 2 (below)
indicates the differing levels of wage gap depending on the type of employee
being measured. Of note, the figure shows hourly wages for male and female
permanent part-time workers slightly favour women (the gap is -2.7%). This
could be due to a range of factors, including the industries of employment or
tenure in jobs that tend to be permanent part-time.
Figure 2. Wage gap: average
hourly cash earnings of non-managerial employees, May 2018(a)
(a) All rates of pay – adults, juniors, training
and other rates.
Source: ABS, Employee earnings and hours, May 2018.
What are some of the limitations of
the wage gap measure?
The ILO
suggests ‘raw gender pay gap’ measures based on aggregate weekly
earnings are inadequate for comparing differences and that hourly wages provide
a more realistic estimate of the gap, as they assist in ‘disentangling
working time from earnings’ (p. 22).
- Women tend to be overrepresented in part-time work. In March 2020,
just under half (44%) of Australian female employees worked part-time hours
compared to about 18% of male employees (Labour
Force Survey, detailed–electronic delivery). This difference can
be an issue when only weekly wages are available.
- Full-time employees are sometimes used as a pseudo adjustment to
account for differences in men’s and women’s employment patterns. This
exclusion
is problematic, as almost half of all women work part-time and are
therefore excluded from this type of analysis.
Further, applying the wage gap measure to aggregate earnings
data does not account for variations within an employee group (Todd
and Preston, ‘Gender pay equity in Australia’). For example, the
distribution of women’s work may impact on the earnings measured. Any
part-time work undertaken in higher-paid occupations or industries will not be
accurately captured by a full-time earnings measure. Similarly, if most
full-time work is undertaken in lower-paid occupations or industries, these are
the earnings that will be most reflected.
Something else to
consider is that managerial roles, or senior officials, are often excluded from
wage gap analysis, with the focus being on non-managerial employees. While some
commentators argue this adjustment provides for a more comparable group of
employees, it marginalises the extent of any wage gap due to differences in the
gender balance of management jobs. Women are typically underrepresented in these
types of roles, at approximately 34% globally in 2018 (Global
Gender Gap Report, p. 9).
What else should be considered when
analysing the wage gap?
While hourly earnings provide a better basis for men’s
and women’s pay comparisons, they don’t account for the range of
variations in work settings, or for socio-economic differences. Analysis should
aim to include a range of other variables, such as age profile, job tenure or
seniority, gaps in participation (parental leave or career breaks), industry
pay differences, skill level of jobs, geographic locations (metro versus
regional), educational qualifications, pay setting methods (individual versus
group bargaining), size of organisation or sector of employment (private versus
public).
Figure 3 (below) provides an Australian example of the differences
in wage gap by age group based on median employment income (a mid-point measure
of the sum of employment income received for all jobs held by a person).
Figure 3. Wage gap: median employment income per
employed person by age, 2016–17
Source:
ABS, Jobs in Australia, 2011–12 to 2016–17.
Sources to help analyse the wage
gap
Disaggregating earnings data by sex and additional
characteristics helps to pinpoint where differences may be occurring. The
matrix on the next page (Figure 4) provides a list of characteristics that can
be cross-classified by earnings and sex, by selected Australian Bureau of
Statistics (ABS) data sources. Short summaries (including web links), for each
highlighted source are provided on the subsequent page.
Figure 4. Where can I find ABS earnings
data by sex and…?
This is not an
exhaustive list. The assessment of availability is based on ‘best
fit’, freely published ABS data. Additional or unpublished data may also
be available.
(a) The trend series has been suspended temporarily.
(b) Proxy for casuals is 'employees without paid leave
entitlements'.
(c) This data is only available every two years. The
most recent data was published in August 2018.
What are the key Australian sources
of earnings?
ABS earnings data generally relates to employees, who in March
2020 (average of 12 months ending) represented 83% of employed people. The
group ‘employees’, generally but not always, excludes self-employed
persons. Three key earnings sources are summarised below. See also: ABS,
‘Employee
remuneration’ in Labour statistics: concepts, sources and methods,
Feb 2018; and ABS, ‘Appendix:
ABS data sources for earnings, employment income and total personal income‘
(look up chart) in Characteristics of employment, Aug 2018.
This survey provides estimates on the composition and
distribution of employee earnings; it is run every two years in May (note the
May 2020 survey was postponed due to Covid-19). The key series include average
weekly cash earnings for: all employees; non-managerial employees; and
full-time non-managerial employees. Selected data is published by sex. Caution
should be applied when comparing estimates for different periods as there have
been a number of changes to the survey over time.
Average hourly total cash
earnings = total taxable gross weekly earnings [divided by] total hours paid
for
This survey provides estimates of weekly earnings by
sex every six months. The original data is available over a long time frame,
supplemented by trend data from 2012 onwards. The key series include: average
weekly earnings for full-time adult employees by ordinary time and by total
earnings; and average weekly total earnings for all employees (part-time
workers, youth, etc).
Average weekly earnings =
estimates of weekly total earnings [divided by] estimates of number of
employees
This survey has been conducted in August of each year
since 2014 (note historical data is available through a past related survey, Forms of
employment). Key data includes employee median and mean earnings (hourly
and weekly) by sex and other characteristics, as well as earnings distribution
(deciles, ranges).
Median weekly earnings = the
distribution of employee earnings [divided] into two equal-sized groups
What about data on jobs and income?
The ABS Jobs
in Australia, 2011–12 to 2016–17 provides job counts and
estimates of employment income and employee income for jobs (including multiple
job holders), as well as median and mean figures. Analysis is possible by either
small geographic areas (including 2018 Commonwealth Electoral Divisions) or
detailed industries.
Where can I find business salaries
data by sex?
The Workplace Gender
Equality Agency (WGEA) data set provides information on all people
employed in non-public sector businesses with 100 employees or more. In 2018–19,
the data covered approximately 41% of Australia’s total labour force,
relating to more than 4 million employees. The Agency’s Data Explorer is an interactive tool
that enables the data to be interpreted through key themes, such as industry. Data
is available from 2013–14 onwards.
Where can I find public service pay
data by sex?
The APS Remuneration Report
is an annual pay snapshot for the Australian Public Service (APS), which
provides data by classification, base salary and remuneration packages. In 2018,
the report covered 2,614 senior executives (SES) and 133,219 non-SES employees.
The report excludes some types of employees, as well as agency heads and public
office holders. Some data is annualised, such as for part-time workers. Also note
that large agencies (for example, Human Services, Defence, Home Affairs) tend
to influence the median figures, as the attributes of their staff (for example,
pay rates) contribute a larger share to the overall total. Comparable data is
available from 2011 onwards.
What sources are available for international
wage gap comparisons?
ILO, A
quantum leap for gender equality: for a better future of work for all,
7 Mar 2019.
ILO, Global
wage report 2018/19: what lies behind gender pay gaps, 26 Nov 2018.
ILO, World
employment and social outlook: trends for women 2018–global snapshot,
8 Mar 2018.
International Monetary Fund (IMF), 'Pursuing
women’s economic empowerment', Policy Papers Series, 31 May
2018.
Organisation for Economic Co-operation and Development (OECD),
The
pursuit of gender equality: an uphill battle, 4 Oct 2017.
J Rubery and A Koukiadaki, Closing
the gender pay gap: a review of the issues, policy mechanisms and international
evidence, Report, ILO, 1 Dec 2016.
World Economic Forum (WEF), The
global gender gap report 2018, 17 Dec 2018.
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