New research suggests that Australia’s national gender pay gap cannot be sufficiently explained by women working in lower-paying sectors than men but is due to women being paid less than men within the same occupation.
According to economic institute, e61, different characteristics and skills, such as job tenure, full-time status and education level, do not explain why women work in different occupations, nor why they are paid less when working in the same occupation than men.
The study of taxation data does however find that marriage and parenthood have a much greater effect on women’s wages than men’s within the same occupation.
Elyse Dwyer, Research Economist at e61, said the analysis provides an indication for companies on how to best reduce the gender pay gap.
“One potential reason for the pay gap for men and women working in the same occupation is the type of firms that men and women are working for. 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.
“Another potential reason is that women may be less able to pursue leadership opportunities or high-paying but demanding specialties within the same occupation,” said Ms Dwyer.
“Our research suggests that the most effective way for companies to narrow the gender pay gap is to foster an inclusive environment where all employees, regardless of gender, are encouraged to take on domestic and parental responsibilities.
“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.
“Simply focussing 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.”
Silvia Griselda, Research Manager at e61 Institute said the research busts the outdated myth that the gender pay gap exists because more women are nurses, carers and administrators and while more men are lawyers, bankers, and pilots.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. 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.
Financy covers gender finance, diversity, inclusion and ESG issues. We advocate for gender equity change through the Women’s Index report and help businesses take action on DEI through tech solutions like IMPACTER.
