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April 13, 2016
New survey demystifies factors causing the ‘gender pay gap’

A new report by Glassdoor, Demystifying the Gender Pay Gap, helps to confirm the existence of wage disparities by sex and why they continue. It is based on a unique data set of more than 534,000 salary reports by employees, which includes pay data down to specific job title and company name.

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This specificity has enabled Glassdoor to understand both the “unadjusted” and “adjusted” pay gaps in each of five countries (the United States, United Kingdom, Austria, Germany, and France.) In the U.S., the data confirmed the degree of the disparity and which industries have the largest and smallest gender pay gaps.

The unadjusted pay gap between men and women in the U.S. is 24.1%, meaning women earn, on average, $.76 for every $1 men earn. When adding statistical controls for age, education, and years of experience, Glassdoor data show the gap compresses to 19.2%.

And, when additional controls for occupation, industry, location, year, company, and job title are factored in, the pay gap in the U.S. becomes 5.4%, revealing the adjusted pay gap, according to the Glassdoor press release.

The study found a similar difference between the unadjusted and adjusted pay gaps in all five countries examined—a large overall or “unadjusted” gender pay gap, which shrinks to a smaller “adjusted” pay gap once statistical controls are added.

“The gender pay gap is real,” said Dr. Andrew Chamberlain, chief economist at Glassdoor, Inc. “While our report reveals a significant gender pay gap, it’s important to understand there are multiple ways to analyze this gap.

“Glassdoor’s unique compensation database allows us to closely examine the factors that help explain some of the documented differences in pay between men and women and shine a bright spotlight on the portion of the wage gap for which there seems to be no explanation.”

Worker differences

The gender pay gap varies by worker age, occupation, and industry. In terms of age, the study reveals the gender pay gap grows as workers get older. In the U.S., workers age 18 to 24 years face a below-average adjusted gender pay gap of 2.2%. By contrast, among older workers age 55 to 64 years, the adjusted gender pay gap is 10.5%, roughly double the national average of 5.4%.

The study also examines which occupations have the largest gender pay gaps. In the U.S., the adjusted gender pay gap is largest for computer programmers (28.3%), chefs (28.1%), dentists (28.1%), C-suite professionals, such as chief executive officers and chief financial officers, (27.7%); and psychologists (27.2%).

There are some occupations in which the gender pay gap is reversed, and women earn more than men. The occupations with the largest reverse pay gaps are social worker (-7.8%), merchandiser (-7.6%), research assistant (-6.6%), purchasing specialist (-5.5%), mining and metals (6.8%), transportation and logistics (6.7%), and media (6.6%) industries.

It is smallest in aerospace and defense (2.5%); agriculture and forestry (2.5%); biotech and pharmaceuticals (3.0%); travel and tourism (3.0%); and restaurant, bar, and food service industries (3.2%).

Although many specific technology occupations, such as computer programmer, have large gender pay gaps, the technology industry as a whole is closer to the U.S. average and falls in the middle of the pack among industries and slightly above the national average (5.9%).

It is remarkable that a significant gap persists even after Glassdoor compared male and female workers’ pay at the job title and company level.

Other contributing factors

The report divides the pay gap into what can be “explained” due to differences in worker characteristics (e.g., age, education, etc.) and what remains “unexplained.” Glassdoor researchers found that the majority (67%) of the overall U.S. pay gap can be explained, while 33% of the overall pay gap cannot be explained by any factors observable in the Glassdoor data.

This means the unexplained pay gap may very well be attributed to workplace bias (whether intentional or not), negotiation gaps between men and women, and/or other unobserved worker characteristics.

The study reveals that the largest contributing factor to the gender pay gap is explained by differences in how men and women “sort” into occupations and industries with varying earning potential. This finding is consistent across all five countries, and in the U.S., it makes up more than half (54%) of the unadjusted gender pay gap. For example, U.S. Census figures show women make up only 26% of highly paid chief executives, but 71% of low-paid cashiers.

Other third-party academic research suggests the occupational sorting of men and women is due partly to social pressures that divert men and women into different college majors and career tracks. Another factor is gender norms, such as women bearing disproportionate responsibility for child and elderly care, which pressures women into more flexible jobs with lower pay. Less of the gap is explained by gender differences in education, age, or years of experience (14%).

“Women and men tend pursue different career paths early in life and then sort into different industries and occupations, which, in large part, is due to a variety of societal expectations and traditional gender norms. This is the single largest factor we see contributing to today’s gender pay gap,” added Chamberlain.

See the full Glassdoor Economic Research report, here.

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