WHAT IS GENDER PAY GAP AND HOW IS IT CALCULATED?

The indicator called GENDER PAY GAP (GPG) is used to express the inequality of remuneration between men and women. It represents the difference in average earnings and is expressed as a percentage of men's average salary.

The current value of GPG is published every year by Eurostat and the Czech Statistical Office. This allows us not only to determine exactly the actual level of the gender pay gap in the Czech Republic, but also to find out how we are doing in comparison with other countries around the world.

We can also calculate the so-called adjusted GPG, the value of which expresses the difference in the income of women and men in a comparable position, at a comparable age and with a comparable education or length of practice. In this way, we can determine more precisely how much of the GPG is directly discrimination itself.

WHAT IS PURIFIED GPG?

 

Some of the methods make it possible to determine (based on regression analysis) how much of the total GPG value can be explained by sub-factors, such as type of industry, company size, length of service, work experience, age or education. The purified GPG (also called the "adjusted GPG") represents a value that cannot be explained by these sub-factors and is closer to the value of direct discrimination.

The influence of these individual factors on the level of GPG in the Czech Republic is addressed in our study Differences in Remuneration of Women and Men in the Czech Republic: Workplaces, Employment, Equal Work and the Decomposition of Factors. It shows that the value of adjusted GPG in the Czech Republic (taking into account the aspect of the same position with the same employer) is as much as 10%. There is a big difference between the public sector, where adjusted GPG is around 5%, and the private sector, where its value is more than double (11%). However, it should be emphasized that the average value of adjusted GPG in the Czech Republic is twice as high as in other European countries. The reasons for this difference in pay between women and men must therefore be sought in other facts, potentially in direct discrimination itself.

WHICH FACTORS ARE PROJECTED TO THE LEVEL OF GPG?

 

Direct discrimination
Women are paid less than men for the same work (or work of equal value).

Indirect discrimination
Seemingly neutral treatment, which however in consequence disadvantages women.

Horizontal labour market segregation
Women are much more often represented in sectors with lower wage levels.

Vertical segregation of the labour market
Men are more likely to occupy senior positions than women.

Family and household care
Women are more involved in caring for the family or household.

Gender stereotypes
Women and men are assigned different characteristics, abilities and social roles (e.g. woman - caregiver, man - provider).

In the EU, the Czech Republic has the second highest difference in earnings between women and men (GPG) - 20.1%. The EU average is more than 5% lower. (Eurostat, 2018)

CURRENT DIFFERENCES IN REMUNERATION OF WOMEN AND MEN IN THE CZECH REPUBLIC

 

Development over time
Data collected continuously since the 1960s show that the problem of inequality in the remuneration of women and men is nothing new in the Czech Republic. In 1962, the GPG even reached 36%. Although the difference decreased to 29% in the 1970s and 1980s - partly due to a significant increase in women's education (and the trend of a slight decline continued in the 1990s), since 2002 the gender pay gap in the Czech Republic has rather stagnated.

Consequences
GPG negatively affects not only women's lives. Unequal pay is also reflected in the living standards of entire families (including children) and, ultimately, in the functioning of society as a whole, the country's economy and public finances. Women are at increased risk of poverty, and the GPG also has a negative impact on their pensions.

Causes
The current level of GPG is also affected by the structure of the labour market. Women's work is undervalued, women are more likely to work in less paid segments. Higher GPG is evident especially in so-called feminized fields (with approximately 80% of women among employees) such as education (GPG 25%) and health care (GPG 30%). In these fields the so-called glass elevator phenomenon is also manifested: men are given structural advantages and can benefit from faster career and salary growth.

Looking at the specific job positions we find that the highest GPG is, for example, in managing positions, i.e. in positions where women are represented least. In management positions there are only 31% of women, and GPG reaches 27%. GPG in management positions is also affected by the so-called glass ceiling phenomenon, i.e. an invisible system of obstacles that prevents women from accessing higher positions.

Age
The GPG value changes significantly with age. The highest GPG (27-30%) is faced by women between the ages of 35 and 49, i.e. at a time when they are most affected by childcare. However, relatively high difference (12–13%) also occurs between men and women under the age of 24, when most of them do not have yet children of their own. Thus, it is not only the childcare itself that has an effect on the amount of GPG, but also the expectation that the woman will in the future care for the children.

Education
GPG is lowest among people with basic education (17%). The highest GPG (29%) is among people with a university degree, where the average difference is CZK 14,991 per month. This is despite the fact that in the economically active population (16–64 years) female university graduates (21%) predominate over male university graduates (19%).

Geography
The amount of GPG also varies by region. The largest differences in remuneration currently exist in Prague (25%) and in regions with higher average wages.

Types of employment
The highest average GPG is found in the job with the highest average monthly wage. The highest differences in remuneration (an incredible 50%) are between financial brokers: the amount reaches over CZK 400,000 per year. On the other hand, the lowest differences are for cooks (-1%). The average wage of men is exceeded by the average wage of women in only 2% of types of jobs – however, here the value of GPG is within hundreds of crowns, often even less.

The role of social dialogue
If there is a collective agreement in the workplace, the average GPG is 21%, without it its amount is around 24%. The collective agreement is beneficial also for men, as it ensures higher average wages for all, regardless of gender. This also applies to state-owned companies (GPG 20%), in which - compared to the private sector (GPG 25%) - we generally encounter higher average wages for both men and women and smaller pay gaps.