With global attention on the gender pay gap over the past three years, it begs the question “Has progress been made?”
According to new research from Glassdoor’s Economic Research Team, there is evidence showing that the gap has narrowed slightly. The report, Progress on the Gender Pay Gap: 2019, reveals that although significant pay gaps remain between men and women, the pay gap has narrowed slightly in the UK, US, France and Australia, showing improvement since Glassdoor’s 2016 study. The 2019 study is based on more than half a million salary reports shared on Glassdoor by employees over the past three years, and includes pay data down to specific job title and company name.
Today, the unadjusted pay gap between men and women in the UK is 17.9 percent, meaning women earn, on average, 82p for every £1 men earn. This represents a 5.0 percentage point shrink in the unadjusted pay gap from three years ago, when women earned, on average, 77p for every £1 men earn. When statistical controls are applied for worker and job characteristics, including worker age, education, years of experience, occupation, industry, location, year, company and job title, the pay gap in the UK today is 5.0 percent, revealing the adjusted pay gap. This is down one half of one percentage point from the 2016 adjusted pay gap (5.5 percent). The 2019 study finds similar differences between the unadjusted and adjusted pay gaps in each country analysed.
“Leveraging Glassdoor’s unique salary and pay database, we’re shining a light on the factors that explain the documented differences in pay between men and women and, perhaps more importantly, where unexplained barriers continue to slow the march toward pay equality,” said Glassdoor Chief Economist Dr. Andrew Chamberlain.
The Causes of the Gender Pay Gap Revealed
The pay gap can be divided into what can be “explained” due to differences in worker characteristics (e.g., age, education, etc.) and what remains “unexplained.” Glassdoor researchers found that the majority (61 percent) of the overall UK pay gap can be explained, while 39 percent of the overall pay gap cannot be explained by any factors observable in Glassdoor data. This means the unexplained pay gap could be attributed to factors such as workplace bias (whether intentional or not), negotiation gaps between men and women and/or other unobserved worker characteristics.
One of the most significant factors contributing to the pay gap is the industry and jobs that men and women sort themselves into, also known as “occupational sorting”. This factor explains about 37 percent of the overall UK pay gap.
Inside the Global Gap
Economists researched the pay gap in 8 countries (up from 5 in 2016): the U.S., United Kingdom, France, Germany, Australia, Canada, Netherlands and Singapore.
Across all eight countries we examined, the large unadjusted gender pay gap shrinks to a smaller adjusted pay gap once statistical controls are added. Germany has the largest unadjusted gap with women earning about 78 cents per euro men earn while France has the smallest unadjusted gap with women earning about 88 cents per euro men earn. Australia has the smallest adjusted gap with women earning 97 cents per dollar men earn, while the Netherlands has the largest adjusted gap with women earning 93 cents per dollar.
Closing the Gap
The median wage in the UK for full-time working women is about £32,659 a year, and with a 5.0% pay gap, women lose more than £212,000 over a 30-year career — more than six years’ salary. Therefore, it is imperative that employers and job seekers work to close the gap.
Understanding key drivers of the pay gap is critical to identifying the best ways to fix it. Research shows that salary transparency and better information sharing are powerful tools in helping to achieve equal pay in the workforce.