RESEARCH PAPER SERIES, 2020–21              Updated 16 NOVEMBer 2020

Gender wage gap statistics: a quick guide

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…?

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.

Employee earnings and hours

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

Average weekly earnings

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

Characteristics of employment

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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