Gender Pay Gap at 83c to Every $1

Australia has a gender pay gap of 17.3 per cent, where women earn 83 cents for every $1 a man makes, according to a new international report.  

The Glassdoor Economic Research report, Demystifying the Gender Pay Gap, analysed hundreds of thousands of salaries in Australia, the United States, the United Kingdom, Germany and France.

The Australian data, from a survey sample of more than 4,000 employees, found that the gender pay gap was slightly lower than the Australian Workplace Gender Equality Agency estimate of 17.9 per cent in 2015.

It found that the average base pay in Australia was $99,940 per year for men and $84,218 for women, which amounted to a gender pay gap of $15,722.

Unlike most studies, however, the Glassdoor report also included statistical controls, including a personal characteristics, job title, company, industry, designed to make an “apples to apples” comparison, which resulted in a smaller pay gap.

The report found that, in Australia, applying controls for age, education and years of experience, the gender pay gap shrunk to 12 per cent for base pay.

Including additional controls for company and job title, the adjusted gender pay gap was just 3.9 per cent for base pay.

“The gender pay gap is real, both in the US and around the world. Men earn more than women on average in every country we examined, both before and after adding statistical controls,” report author and Glassdoor chief economist, Dr Andrew Chamberlain said.

To further explain what causes the discrepancy, the report divided the overall gap into an “explained” and “unexplained” criteria.

The explained gap was due to differences between workers, while the unexplained gap could be due either to workplace discrimination, whether intentional or not, or unobserved worker characteristics.

In Australia the “explained” part of the gender pay gap was 61 per cent, leaving 39 per cent of the pay gap “unexplained”. In all countries, most of the gender pay gap is explained.

Dr Chamberlain said the single biggest cause of the gender pay gap was found to be occupation and industry sorting of men and women into jobs that pay differently throughout the economy.

“Workplace fairness and anti-discrimination remain important issues. But the data show that while overt forms of discrimination may be a partial cause of the gender pay gap, they are not likely the main cause.

“Instead, occupation and industry sorting of men and women into systematically different jobs is the main cause.

“Research shows that employer policies that embrace salary transparency can help eliminate hard-to-justify gender pay gaps, and can play an important role in helping achieve balance in male-female pay in the workplace.”

The Australian sample was 77 per cent male and 23 per cent female, and the average age was 35 years with 6.3 years of relevant work experience.

The sample’s education was split into 59 per cent with a bachelor’s degrees, 27 per cent with a master’s degrees, and 8 per cent had high school diplomas.