Most OECDcountries do not report data with this intersectional framework in mind. Here's how you can close your wage gap: Related: 5 Ways Women Can Fight the Gender Pay Gap (Besides Asking for More Money) 1. Pay transparency offers a relatively simple and intuitive way to identify and address gender wage gaps when they occur in a workplace. The EC also provided guidance in this Recommendation on improving data collection and reporting around gender pay gaps and the occurrence of pay discrimination cases; called on member states to clarify the concept of work of equal value in their legislation; and encouraged the development and use of gender-neutral job evaluation and classification systems to prevent or identify and tackle possible pay discrimination based on gender-biased pay scales. Pay transparency can help close the gender pay gap but at However, such a basic measure may conceal inequalities (and possibly discrimination) across workers in the same job. But strengthening reforms, greater stakeholder engagement, and more and better evaluations are needed. All of these pay transparency measures can function at least as well as a right to request a comparators pay but only if they are designed and implemented well. Targeting both employers and employees can help address concerns raised amongst some countries about company compliance. Countries without a dedicated government actor regularly enforcing reporting requirements tend to have less data on compliance, so it is unclear how effective their measures are. This proposal is now undergoing peer review by member countries (European Commission, 2021[30]). Some other countries have said that a comparator should not be necessary at all to prove unfair pay. The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions. Nationally, the gender wage gap for all full-time, year-round workers, based on median earnings, is 16 percent, but in the federal The EUs new pay transparency directive wont close the gender pay gap by itself. Since the Pay Equity Act came into force in August 2021, the Government of Canada has been working to reduce the gender wage gap in federally regulated workplaces. This chapter discusses the persistence of the gender wage gap throughout the OECD, presents definitions and an overview of pay transparency policies in OECDcountries, and closes with a detailed discussion of lessons learned and policy recommendations. Another major barrier is the enormous inequality that exists in the distribution of unpaid work hours (OECD Gender Data Portal, 2021[14]). This has negative implications for their pay, particularly in jobs with inflexible work hours (Goldin, 2014[17]). France offers an example of a country with an extensive but straightforward list of wage statistics4 required for an audit (Chapter4), and countries like Canada, Israel, Portugal, France and Switzerland have developed publicly available official calculators to help companies meet pay reporting requirements. Webit will take more than 70 years before the gender wage gap is closed completely (ILO 2016). WebPay transparency has been touted as a solution to pay inequity and to close the gender pay gap. (For a summary of this literature, see (Blau and Kahn, 2016[18])). This provides considerable transparency in pay for given positions or job classes (Chapter2): knowing only a colleagues job title, one can learn their pay with some accuracy. Additionally, pay equity claims that go through the legal system tend to be costly, both in time and money. [E]liminate the discriminatory gender wage gap by strengthening the legal framework and its enforcement for combating all forms of discrimination in pay, recruitment, training and promoting; promoting pay transparency; ensuring that the principle of equal pay for equal work or for work of equal value is respected in collective bargaining and/or labour law and practice; tackling stereotypes, segregation and indirect discrimination in the labour market, notably against part-time workers; promoting the reconciliation of work and family life (OECD, 2017[16]).. During childrearing years, mothers equal participation in the labour market is essential for both raising overall family income and for ensuring a more equal distribution of (paid and unpaid) resources at home. To support this, objective criteria to assess work of equal value should be used for pay equity claims. [28] United Kingdom Government Equalities Office (2018), Presenting gender pay gap figures to the public: an online trial - GOV.UK, United Kingdom Government Equalities Office, https://www.gov.uk/government/publications/presenting-gender-pay-gap-figures-to-the-public-an-online-trial (accessed on 17September2021). OECD data on earnings are collected annually through labour force surveys and household surveys, and are presented in the OECD Employment Database. pay transparency WebIt seems very plausible that the equal pay auditing systems described in this chapter may have a larger effect than simple pay reporting on reducing the gender wage gap. It is no wonder, then, that a sizeable gender wage gap persists in every OECD country, with rates ranging from around 4% to over30% when looking at median full-time earners (Figure1.1). It also may not sufficiently support pay equity claims that require a comparator. Guidelines to the reporting requirements of Frances Professional Equality Index (PEI) between Women and Men (lIndex de lgalit professionnelle entre les femmes et les hommes) are available at this site (in French): https://travail-emploi.gouv.fr/droit-du-travail/egalite-professionnelle-discrimination-et-harcelement/indexegapro. Gender Pay Gap .agency-blurb-container .agency_blurb.background--light { padding: 0; } Canadas pay gap reporting and pay equity measures illustrate how a country can engage with many stakeholders to help ensure buy-in from the earliest stages of policy planning. Many countries identify privacy and data protections as a hurdle to sharing a specific, comparable colleagues pay (OECD GPTQ 2021). Pay transparency mandates are very new in the U.S., so theres not enough data to definitively judge how much they affect gender and racial wage gaps on a large scale. pay transparency Evidence From Austria, CRC TR 224 Discussion Paper Series, https://ideas.repec.org/p/bon/boncrc/crctr224_2020_194v1.html (accessed on 26August2021). Australia, Canada, Ireland, the UnitedKingdom and the UnitedStates), monthly (e.g. Pay Transparency Policies: Research findings are not conclusive. Embed pay transparency within a broader public commitment to gender equality and closing the gender wage gap. With the support of the National Institute of Women (INMUJERES), Mexico has made a good commitment to mainstream gender throughout all aspects of governance, including the production of national statistics (OECD, 2017[22]). These are more common in the public sector. How To Introduce Pay Transparency To Help Close The Will these new transparency measures help close it? In short, who should qualify as a comparable colleague for the basis of a pay comparison? Action plans should be developed to address gender gaps that are found. Banks remain reluctant to disclose gender pay gap data. This involves raising awareness widely. Job classifications can be used not only to address gender gaps but also other forms of discrimination among workers, as pay is defined for the job regardless of who carries it out. For an individual worker, remedying unfair pay depends crucially on knowing how much a comparable colleague earns. Women continue to earn less than men, in spite of major societal changes over decades and In those companies, women are actually making more than men in many cases, and thats a super powerful factor. Some countries ask for one or two simple data points like the wage gap at the mean and median while others ask for an extensive list of gender-disaggregated statistics on wage and employment outcomes across different jobs. .cd-main-content p, blockquote {margin-bottom:1em;} For example, France requires companies to report how many women returning from maternity leave received regular step increases in pay, and countries like Germany, Korea and the UnitedStates mandate gender-disaggregated employer reporting on employee statistics other than pay, such as the gender composition of the workforce (Chapter4). The EUs new pay transparency directive wont close the gender pay gap by itself. A majority of OECDcountries including Canada, Colombia, the CzechRepublic, Finland, France, Germany, Greece, Ireland, Israel, Lithuania, Mexico, Norway, Poland, Portugal, Sweden and the UnitedStates report that they have implemented campaigns to raise awareness of pay transparency measures and/or draw attention to the gender pay gap (OECD GPTQ 2021,). In Austria, when examining whether pay discrimination has occurred in a specific case, the court or the Equal Treatment Commission will request that an employer disclose the pay structure of the company (insofar as needed for the specific case) as well as the pay of comparable workers. Yes, its a real number but its not necessarily reflective of the true gender pay gap when we measure things correctly. Gender differences may be slightly over-estimated where measurement is based on a gross wage because of the inclusion of taxes and social security contributions (for example, second earners who are often women will in some countries be subject to different tax thresholds than their first earners partners). Otherwise the gaps that are found may be ignored or left to workers and their representatives to address. These audits should include an analysis of the proportion of women and men in each category of employee or position, an analysis of the job evaluation and classification system used and detailed information on pay and pay differentials on grounds of gender. The goal was to close the firms gender pay gap, which hovered around 4 percent in the early years of the initiative. Gender wage gap statistics are available at OECD.stat at https://stats.oecd.org/Index.aspx?QueryId=64160. for specific positions or tasks, rather than the aggregated gender wage gap for the entire organisation (Eurofound, 2020[27]). pay Pay Transparency There are significant quality differences in companies reporting both within and across countries. [20] OECD (2021), Towards improved retirement savings outcomes for women., https://www.oecd-ilibrary.org/finance-and-investment/towards-improved-retirement-savings-outcomes-for-women_f7b48808-en (accessed on 27August2021). Job classification systems which list pay for different jobs or job classes are more frequently used in the public sector. Womens economic empowerment has obvious positive consequences for womens agency, freedom, and social and political empowerment. [32] Kim,M. (2015), Pay Secrecy and the Gender Wage Gap in the United States, Pay Transparency Tools to Close the Gender Wage Gap. While some countries conduct awareness-raising and training campaigns, a more comprehensive approach that targets all affected actors, at different stages of policy design, will help ensure policy measures are effective (Box1.5). Digital tools, too, can help companies calculate wage gaps. These policies can Whether mandating equal pay discussions during collective bargaining is necessary may depend upon worker bargaining power and the role and coverage of unions. Nevertheless it still represents a remarkable gender inequality, particularly among high earners (see Box1.2). Noteworthy examples include the Gender Atlas,1 which includes subnational gender-disaggregated pay statistics, as well as an extensive annual report entitled Women and Men (Mujeres y Hombres). Several support tools have targeted small and medium-sized businesses. 7. Horizontal segregation refers to the concentration of women and men in different sectors and occupations. (2021), Wage responses to gender pay gap reporting requirements, CEP Discussion Papers dp1750,, Centre for Economic Performance, LSE, https://ideas.repec.org/p/cep/cepdps/dp1750.html. Importantly, discrimination negatively affects womens pay. 1.1. Access to justice should be streamlined and the burden of proof in pay discrimination cases should rest on the respondent (European Commission, 2020[3]). is the online library of the Organisation for Economic Cooperation and Development (OECD) featuring its books, papers, podcasts and statistics and is the knowledge base of OECD's analysis and data. Trend data should also be interpreted with care as survey methods across countries change regularly, creating breaks in the series and causing artificial fluctuations from year to year. Women aged65 and older receive only around three-quarters of the retirement income of men from public and private pension arrangements on average in the OECD (OECD, 2021[20]; 2019[21]). A hotline was put in place throughout 2020 to answer questions from employers on how to calculate and report the Index. 4. This is a cost that could potentially be publicly subsidised for small employers. 2. The same is true for family supports, like public childcare and paid leave, which have helped boost womens labour force participation over the past few decades. WebPay transparency policies are increasingly commonly used in OECD countries to close the gender wage gap. Please select the WEB or READ option instead (if available). There are benefits and drawbacks to each approach. However, the onus tends to remain on workers or their representatives to initiate pay equity claims, which are typically costly and time-intensive. This report covers the 38 member states of the OECD, spanning from North and South America to Europe and Asia-Pacific (https://www.oecd.org/about/members-and-partners/). the gender pay gap Women tend to be overrepresented in fields that pay relatively lower wages, such as caregiving and service sector jobs, and underrepresented in fields with relatively higher wages, such as science and technology jobs. Italy) basis. This brief outlines and explains the different It is not clear ex-ante whether pay transparency policies are e ective instruments to close the gender pay gap. the Gender Wage Gap Is Unequal wages during the working years have long and compounding effects on gender inequality throughout the life course. However, as explained above, pay reporting is relatively low cost, particularly if governments provide an online pay gap calculator. Equal pay cases tend to be relatively infrequent, and, when initiated, workers and their representatives tend to experience costly (both in time and money) legal proceedings. @media (max-width: 992px){.usa-js-mobile-nav--active, .usa-mobile_nav-active {overflow: auto!important;}} ol{list-style-type: decimal;} These measures offer a relatively simple way to identify and address gender wage gaps when they occur in a workplace but their design and implementation matter. Lower earnings lessen womens economic independence throughout life, but the consequences are painfully obvious in old age. Proponents of salary transparency say its a crucial piece to closing racial and gender wage gaps, which have barely budged in years. This is an attempt to correct for gender biases in job valuations that can exacerbate pay disparities. To achieve pay equity goals, it is perhaps most effective for companies to calculate both sets of statistics, with the overall wage gap easily estimated based upon the disaggregated measures. Vertical segregation, meaning that men and women are concentrated in different job levels, also affects womens pay. Although the evidence base is still being built, pay transparency policies hold significant appeal. gender pay gap could be reduced by 40% with broad pay transparency. When it is not possible to implement randomised experiments during programme implementation or reform, government research offices and academics should consider using quasi-experimental methods to evaluate pay transparency programme effects. Such statistics typically include the average or median remuneration of men and women at the company or workplace level, but may be more detailed (Chapter3). The planned three-year programme entails a best-practice-exchange and also talks for company representatives. Women are overrepresented in part-time jobs, and underrepresented in jobs with long work hours, throughout the OECD (OECD, 2017[11]; 2019[12]). 7628 calls were received during the year, 54% of which involved questions about what data should be incorporated in an audit. For more detailed information, see country-level metadata in the gender wage gap table1 on OECD.Stat. (2019), Pay Transparency and the Gender Gap. Can pay transparency policies help close the gender wage gap Countries tend to include carve-outs for smaller firms in an effort to reduce their administrative burden. 1. The most transparent and the most extreme would be those that post (the salary of) every single persons job. This document, as well as any data and map included herein, are without prejudice tothe status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Additionally, it is now almost conventional wisdom in economics that children do better in areas like health when their mothers control a larger share of household resources. France, too, has taken a multipronged approach to widening awareness of its pay auditing system (Chapter4). Gender Wage Countries that include multiple actors in pay reporting typically involve workers, social partners and the government. 104/4, p.1091, http://dx.doi.org/10.1257/aer.104.4.1091. Pay reporting refers to public policies mandating that employers regularly report (including to employees, workers representatives, social partners, a government body, and/or the public) gender pay gap statistics. The wage gap in this report refers to full-time (dependent) employees. To address this persistent challenge, many governments are now mandating promising new pay transparency tools like employer pay gap reporting, equal pay audits, and gender-neutral job classification systems. About half of the governments in the OECD say that women being paid less than men for the same work is one of the top three gender inequality challenges facing their country (OECD, 2017[1]). Eighteen OECDcountries mandate some form of systematic, regular reporting by private sector firms on gender wage gaps. Women continue to earn less than men, in spite of major societal changes over decades and many labour market, educational and public policy initiatives that have targeted the gender wage gap. In 2019, the EC announced its intention to develop a proposal for binding pay transparency measures. 1. This has been proven through randomised field experiments. [22] OECD (2017), Building an Inclusive Mexico:Policies and Good Governance for Gender Equality, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264265493-en. [8] Baker,M. etal. Does pay transparency close the gender pay gap? | Payscale Some countries facilitate salary comparisons when an employee is seeking recourse against possible discrimination. When armed with the knowledge that they have been underpaid, a worker tends to have a limited number of options: do nothing, negotiate higher pay, or initiate a pay equity claim. Evidence-based policies (2019), Pay Transparency and the Gender Gap, NBER Working Paper No. Once undervaluation has been established, the work can be compared with comparable work predominantly performed by men (Chapter2). at different grades, levels of responsibility or positions. [7] Gulyas,A., S.Seitz and S.Sinha (2020), Does Pay Transparency Affect the Gender Wage Gap? Nevertheless, legal mechanisms must be in place for either an individual or a group of workers to seek recourse if they are indeed underpaid for doing work of equal value to a colleague or workers supplying work of equal value. Best practice includes acknowledging that there is no homogenous woman, and understanding that factors such as sex, ethnicity, race and class intersect with one another and can lead to larger gaps in labour market outcomes based upon these features. Nevertheless, some countries NSOs and/or labour ministries collect and report earnings data by gender and race/ethnicity (such as Canada, Mexico, NewZealand and the UnitedStates), while others do account for various age groups by gender (such as Norway and Australia) or foreign worker status by gender (such as the CzechRepublic). Publicly available and easily accessible online gender pay gap calculators can also help mitigate against concerns that pay reporting and auditing obligations are a large administrative burden placed upon affected companies, particularly smaller ones. Trend lines include the latest data available: 2019 for Korea, Sweden, the UnitedKingdom and the UnitedStates, 2018 for Australia, and 2017 for Chile. Note: Values represent the difference between median earnings of men and women relative to median earnings of men, 2019 or most recent year. The treatment groups were exposed to the following interventions: 1)the gender pay gap (GPG) presented as percentage and visually in a bar chart; 2)identical to 1st but with benchmarking (against other companies) information; 3)identical to 2, but GPG presented in terms of money and visually as coins; 4)GPG presented as percentages in the type of theU.K.Energy Performance Certificate. This control over spending is influenced (though obviously not entirely) by who brings the income into the home (OECD, 2019[12]). Efforts to reduce horizontal and vertical segregation (Box1.1) and attempts to equalise the gendered distribution of unpaid care work have moved at a glacial pace in most countries. These aggregate gender pay gaps likely underestimate the extent of the gender pay gap across different groups, as there are compounding, intersecting forms of discrimination based on different background factors like race/ethnicity, gender identity and sexual orientation. The OECD has long prioritised eliminating the gender wage gap in its policy research and in its formal Recommendations.1 In addition to identifying relevant family and labour market supports to improve gender equality outcomes, the 2013 OECD Gender Recommendation of the Council on Gender Equality in Education, Employment and Entrepreneurship (OECD, 2017[16]) calls upon OECD member countries to. 2. The FederalGovernment will engage with companies to promote and achieve a more modern culture of work in terms of gender equality, especially in terms of equal pay. However, two studies [25] Government of Germany (BMFSFJ) (2020). As more employees share their salary information openly online and off, this social norm is changing, and HR departments are preparing for a future in which pay transparency is an expected part of work culture. These policies hold considerable allure. In 2020, 420 in-person or (after March2020) online training sessions were carried out and 1430 companies were trained. Gender-neutral job classification systems are often embedded within equal pay auditing processes, suggesting they may become more widespread if pay auditing policies gain momentum. Source: OECD (2021), Gender wage gap indicator. pay transparency close the gender pay gap In terms of analysing, reporting and disseminating a wide range of gender-disaggregated labour and social statistics, Mexico often stands out as best practice in the OECD. 1. [14] OECD Gender Data Portal (2021), OECD Gender Data Portal, https://www.oecd.org/gender/data/ (accessed on 15June2021). Available at https://data.oecd.org/earnwage/gender-wage-gap.htm. .table thead th {background-color:#f1f1f1;color:#222;} A comparator, in the context of equal pay litigation, refers to a worker whose salary is used as a reference for another person who is in a comparable working situation. [6] Bheim,R. and S.Gust (2021), The Austrian Pay Transparency Law and the Gender Wage Gap, IZA DP No. Some countries, particularly in Europe, have initiated a range of pay transparency policies, while other countries have barely moved beyond basic equal pay legislation. 6. The questionnaire requested details on the following public strategies for promoting equal pay in each country: Right of employees to request information on pay levels, Regular reporting by companies on pay levels, The role of social partners and collective bargaining in equal pay, Gender-neutral job evaluation systems and defining the concept of work of equal value, Transparency measures led by social partners, Impact evaluations of measures to address equal pay, Other recent government policies to address explicitly the gender wage gap. But it will help. These measures offer a relatively simple way to identify and address gender wage gaps when they occur in a workplace but their design and implementation matter. Pay Transparency Tools to Close the Gender Wage Gap | en
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