New data has debunked a “myth” that the gender pay gap exists on account of occupation choice, revealing the majority of Australia’s national gender pay gap is due to women being paid less than men within the same occupation.
e61 Institute, a non-partisan economic research institute led by former Productivity Commissioner Michael Brennan, conducted analysis of tax data exploring the origins of the gender pay gap, which according to the Australian Bureau of Statistics is 12 per cent.
Whilst some argue the gender pay gap derives from women choosing lower-paying jobs, such as nursing, teaching and early childhood care, researchers at the e61 Institute this factor accounts for only 20 per cent of the gender pay gap.
Indeed, the organisation’s research found that the remaining 80 per cent is due to men being paid more than women in the same occupation.
Silvia Griselda, the research manager at e61 Institute, said the new data “busts the outdated myth that the gender pay gap exists because more women are nurses, carers and administrators and while more men are lawyers, bankers, and pilots”.
“What the data shows is that most of the gender pay gap is because women are paid less than men within the same occupation,” Griselda said.
“Policies and action, by companies and governments, to increase female representation in high-paying occupations are very important but unlikely to significantly narrow the gender wage gap on their own.”
The researchers, led by Griselda, noted that factors like job tenure, full-time status and education level are “actually quite insignificant” when it comes to identifying the causes of the gender pay gap in Australia.
“When we compare men and women with similar age, employment and marital status, number of children and academic ability, working in the same occupation, women have an hourly wage that is 15 per cent less than men’s,” Griselda said.
However, the researchers found that wages of women who were married and who had children were impacted on a much larger scale than men’s wages.
“The factor that does seem to drive the gap wider is personal – being married and having dependent children imposes a penalty on how much women earn compared to men,” Griselda said.
“This penalty exists for women but not for men.”
What’s going on?
Unequal pay for men and women is illegal in Australia: since 1969, Australian legislation has safeguarded the right to equal pay.
But e61 Institute’s research is showing women who work the same occupation as men are not earning as much.
Elyse Dwyer, a research economist at e61 Institute, said there are two potential reasons for this pay disparity: it could be the type of firms that men and women work for, as well as leadership opportunities available for women.
“Men may be more likely to work in high-paying firms, which require less flexibility and longer working hours. e61 Institute is currently undertaking research to understand this,” Dwyer said.
“Another potential reason is that women may be less able to pursue leadership opportunities or high-paying but demanding specialties within the same occupation.”
What’s the solution?
To close the gender pay gap, e61 Institute conclude companies must foster an inclusive environment for their employees, including encouraging all employees “regardless of gender” to take on care responsibilities outside of work.
“This could include being more flexible as to when or where work tasks are completed, encouraging job-sharing in leadership positions and diversifying hiring practices,” Elyse Dwyer said.
“Simply focusing on encouraging women into higher-paying occupations, such as pilots or lawyers, will not be enough to end the pay gap. The bulk of the gains will more likely come from improved workplace flexibility that allows more women to take on higher-paying positions.”