Background to the Research

• This report is part of the Equality Commission for NI's contribution to a trans-national study, which aimed to explore the gender pay gap in certain sectors with a view to identifying strategies and actions to reduce this gap. The specific objectives of the current study were to review and comment on the economy-wide evidence of the gender pay gap, and to assess the scope for developing NI-specific recommendations on actions. This study focussed on the IT and Retail sectors in NI.
  

Research Approach

• Statistical analysis of the economy-wide pay gap comprised: analysis of NES data to provide a descriptive overview of the main trends in the gender pay gap; and analysis of LFS data with the objective of updating a previous study (Borooah & Forsythe, 1997), to examine the trend in the extent of unequal treatment of women in the NI labour market. A case study approach was taken to the analysis of the gender pay gap in the IT and retail sectors, incorporating statistical analysis of survey datasets, available data on pay structures, and case studies of selected firms, including face-to-face interviews.
  

Main Findings

The Economy Wide Gender Pay Gap

• In April 2002, the whole economy gender pay gap in NI was 15%, which was wider than the gap between full-time women and men employees (11%) and that between part-time women and men. These figures reflect the fact that women are much more likely to be employed in relatively lower paid part-time jobs than men.
• Between 1972 and 2002, relative earnings of full-time women in NI improved by almost 26%. The available data suggests that the trend in relative earnings of part-time women has not been as positive, and there is not a well-established upward trend in this figure.
• The whole economy relative earnings surged from 1998 to 2002, partly reflecting a levelling off in the part-time share of employee jobs held by women.
• One of the more significant changes in the characteristics of women in the labour force has been their relatively more pronounced improvement in qualifications in comparison with men. However, this does vary between full-time and part-time women workers, with the former comparing more favourably with their male counterparts.
• Using the LFS to consider why a gender pay gap still exists for these full-time women workers revealed that this gap reflected a residual effect, which is unlikely to be entirely due to unequal treatment, and is probably affected by non-observable differences in the work experience characteristics of men and women. Also, while it has not disappeared, unequal treatment of full-time women employees was found to be on a downward path in NI.
• The bulk of the pay gap between full- and part-time women (both 1993/4 and 2000/1) was found to reflect the more favourable characteristics of full-time women, such as skill level.
• The NES data showed considerable variation between industry sectors in the relative earnings of full- and part-time women. In the specific context of NI, the influence of occupational segregation on the gender pay gap varies by both status (full- or part-time) and by the extent to which occupations are linked to public services employment.
• Differences are noted to have been shown in occupational profiles and rates of pay between the IT and Retail and Wholesale sectors, clearly signalling variations in average levels of skill requirements. However, both sectors have grown rapidly in recent years, and a gender pay gap appears to exist in both sectors.

The Retail and Wholesale Sector

• A large gender pay gap exists in this sector (30% when measured against all men's earnings, 37% against men's full-time earnings). The size of the gap reflects the combined influence of: occupational segregation, with women more highly concentrated in the lower-paying groups; under-representation of women in management; and part-time working and the higher share of women in that type of position.
• The trend in relative earnings of women has been broadly static, even slightly downward. This is difficult to explain, as case study interviews and analysis of qualitative data from participating firms confirm an increase in the percentage of women in management and administrative positions - a situation that is likely to continue given the recent growth of the industry.
• Part-time workers are concentrated in the lower-paid sales occupations, which is unlikely to change, and the part-time share amongst women in the industry will thus remain high in the foreseeable future. This in turn will tend to keep relative earnings in the sector below the whole-economy level.

The IT Sector

• It is not possible to establish the precise magnitude of the gender pay gap in this sector in NI, although the available evidence suggests a gap exists. This may partly reflect a higher concentration of women in the lower-paying levels within IT-related occupations, which are determined by experience and qualifications. It is not clear if this concentration reflects the impact of career interruptions or derives from a more recent increase in share at the more junior/entry levels.
• A consistent refrain amongst those interviewed was that the issue of work-life balance was a 'looming' issue that would need to be addressed by the industry - flexibility may not be sufficient.
• The potential impact of a gender pay gap in this sector is constrained by the fact that women account for fewer than 1 in 3 employees in IT, which has been related to subject choice at school or university, which in turn limits the potential pool of employees. Encouraging an increase in women's share of employment in the sector, which has above-average rates of pay, would have a positive impact on the gender pay gap.

Conclusions

• As convergence in the gender pay gap is occurring in the case of full-time women, a key policy issue is whether this can be accelerated. However, as it is not clear that such convergence is occurring in the case of part-time women, an upward trend in the relative earnings ratio for such women needs to be embedded.
• The results suggest that full-time women's earnings should be on a par with those of men; achieving this should be a policy objective. Policy objectives should also seek to ensure growth in part-time women's earnings; this will be a much harder objective to achieve.
• There is a need to promote and encourage more equal pay both across and within industries.
• Recommendations made include support for sectorally-focused strategies as one element to reduce the gender pay gap. More specifically: there is a need to build awareness amongst firms of the existence of unequal pay within their own industries and organisations; and the lack of monitoring of fairness in pay systems must be addressed, which ought to include a business rationale.