Wagegap conferencte Amsterdam, June 2006 Tom Vandenbrande & Fernando Pauwels(HIVA) Explaining the gender wage gap Workshop 5, June 23rd

Wagegap conferencte Amsterdam, June 2006 Gross wage gap in Belgium o Average wage of women, compared to the average wage of men. o Steunpunt WAV, based on register data on annual wage level: 20% o Konings, based on panel data on monthly wage: 25% o Sels, based on survey data on monthly wage: 26% o Wage Indicator data: o 18% when using hourly wage o 26% when using monthly wage

Wagegap conferencte Amsterdam, June 2006 From gross wage gap to net wage gap o Regression analysis o Model: ln (gross wage) = a + b1.gender + b2.personal characteristics + b3. job characteristics + b4.organisational characteristics + b5.attitudes + e

Wagegap conferencte Amsterdam, June 2006 Characteristics considered o Person: experience, age, educational level, children, career past o Job: part time, hours, fixed job, blue/white collar, division, supervision, autonomy, pressure, complexity, occupation o Organisation: sector, number of employees, nationality employer, region, number of women, CAO (=collective bargaining agreement), active trade union o Attitudes: salary important, colleagues important, promotion wanted, wage gap too big, social dialogue important, satisfied with pay policy, satisfied with contract, easy to find another job

Wagegap conferencte Amsterdam, June 2006 Age o Age: +2,57% o Age²: -0,02% o Real wages above expected value o Older people in more interesting positions

Wagegap conferencte Amsterdam, June 2006 Experience o Years with employer: +1,1% o Years²: -0,0% o Salary decreases after 28 years with same employer o Cf. Auer, Berg & Coulibaly on productivity

Wagegap conferencte Amsterdam, June 2006 Educational level o Very important for wage level o University compared to low education: +31% o ! Not important for gender wage gap

Wagegap conferencte Amsterdam, June 2006 # Reasons: family reasons, unemployment, education, army, sick # Only career break for family reason is significant for pay level. Wage punishment of 9%! Career break

Wagegap conferencte Amsterdam, June 2006 Part time work o Very important! 24% less pay! (also when actual number of hours is taken into consideration) o ! Very important for explanation gender wage gap

Wagegap conferencte Amsterdam, June 2006 Job Complexity o The more complex a job is, the higher the wage o Differences up to 10% for the most complex jobs o Other differences: division, supervision, occuational category

Wagegap conferencte Amsterdam, June 2006 Sectoral differences o Public sector pays better! o Commercial services pay not so good o Sectoral differences in graph: banking & chemicals vs. shops & textiles

Wagegap conferencte Amsterdam, June 2006 Small and medium enterprises o Big companies pay a lot better o Foreignly owned companies pay higher wages

Wagegap conferencte Amsterdam, June 2006 # Materialism pays: ‘salary important’  higher wage, ‘colleagues important’  lower wage # Satisfaction (on contract, on pay policy)  higher pay # ‘Wage gap too big in my company’  lower pay # ‘Colective agreements are important for wages’  lower pay Attitudes

Wagegap conferencte Amsterdam, June 2006 # Initial effect of a characteristic: effect on b(gender) when introduced in model with only gender # Marginal effect of a characteristic: effect on b(gender) when introduced after all other characteristics in regression model Effect on wage gap revisited

Wagegap conferencte Amsterdam, June 2006 # Job is the most important factor to explain wage differences between men and women (14.4 ppt or 54%) # In other words, men work in jobs that pay better Job characteristics explain wage gap Effect Gender- Person4.2 ppt Job14.4 ppt Company5.2 ppt Attitude2.4 ppt

Wagegap conferencte Amsterdam, June 2006 # Part time work (28%) & hours in contract (16%) most important factor # Company size (13%) also very relevant # Other job characteristics: job complexity (12%) and supervision (10%) # Age (8%) & experience (8%) # More surprisingly: active trade union in company (6%), number of women in company (3%), career break (3%), ‘collective agreements are important’ (4%) Part time work, company size etc.