Background to the Research

• Women have made striking progress in terms of their labour market participation and employment levels, but their progress towards equal pay has been less impressive. This is a summary of the results of a study carried out to investigate the differences between women's and men's pay in NI. It represents the first econometric analysis of gender based earnings of employees in employment to use the LFS in NI.

• This study is a tentative examination of those factors which result in different male and female average wages in NI and presents a snapshot of the labour market at the time of the survey. The complete report clearly notes that the ability to speak with conviction of gender-based differences in pay for the same job would require a richer set of data than the one used by this study.

Research Approach

• The LFS began collecting data on gross earnings from 1993 and this study is based in pooled LFS samples for 1993 and 1994. The importance of the earnings data in the LFS cannot be over emphasised. For the first time, the two parts of the labour market, the quantity and the price of labour, are integrated into a single database.

• The study examines two hypotheses:
  • The unequal worker hypothesis - the reason women earn less than men is because they are more likely to have lower skills and qualifications and to be at the low pay end of the industrial and occupational structure.
  • The unequal treatment hypothesis - the reason women earn less than men is that they are paid less for the same labour market attributes. This lies at the root of explaining the gender earnings gap. This paper uses the term 'discrimination' to describe this aspect of pay differences between men and women.

Main Findings

• For all employees in employment the observed average male hourly wages is 23% higher than the comparable female wage. In the absence of discrimination, defined in this analysis as men and women with the same labour market characteristics receiving the same pay, women's pay would rise 14.2% with the effect of narrowing the gender pay gap to 7%.
  
  
• For all married employees the observed average male hourly wage is 32.1% higher than the female comparable wage. In the absence of discrimination, married women's pay, relative to married men, would rise 21.4% with the effect of narrowing the gender pay gap to 9%.
  
  
• For all single employees the observed average male hourly wage is 8.1% higher than the female comparable wage. In the absence of discrimination, single women's pay, relative to single men, would rise 3.05% with the effect of narrowing the gender pay gap to 5%.
  
  
• For all married male employees the observed average male hourly wage is 46% higher than the comparable wage for single women. In the absence of discrimination, single women's pay, relative to married men, would rise 39.2% with the effect of narrowing the gender pay gap to 7%.
  
  
• In the LFS data there are some striking differences in the labour market characteristics of women and men. For example, 52% of married men and 37% of all women were classed as skilled non-manual workers while less than 11% of married and 13% of all men fell into this category. Similarly, men, whether married or not, were much more evident in the higher paying skilled manual occupations; one third in the higher paying skilled manual occupations; one third of men but less than 10% of women in this category.
  
  
• Women appear to fare better than men with respect to their relative return for some labour market characteristics. For example, for those individuals with a degree or a comparable qualification and holding other variables constant, having such a qualification rewards women at a higher rate than men. However, when the total effect of all explanatory variables is considered men fare better than women on average.
  
  
• The most significant factor contributing to pay discrimination against women was the difference in the pay of male and female skilled non-manual employees. Thirty-seven percent of all women work in this occupational category. This lowers the mean hourly pay of all women. This downward effect was particularly strong among married women employees. In fact, pay discrimination within the skilled non-manual category represented over half of the discrimination coefficient for married women. In other words, if men and women had been equally rewarded within this one occupational category, the value of the discrimination coefficient would have been only 10% for both married women and all women employees.