Pay gap

The gender pay gap is the average difference between a man's and a woman's remuneration.

There are two distinct numbers regarding the pay gap: unadjusted versus adjusted pay gap which takes into account differences in hours worked, occupations chosen, education and job experience. For example, someone who takes time off (e.g. maternity leave) will likely not earn as much as someone who does not take time off from work. Factors like this contribute to lower yearly earnings for women, but when all external factors have been adjusted for, there still exists a gender pay gap in many situations (between 4.8% and 7.1% according to one study). Unadjusted pay gaps are much higher. In the United States, for example the unadjusted average female's annual salary has commonly been cited as being 78% of the average male salary.

The World Economic Forum provides recent data from 2015 that evaluates the gender pay gap in 145 countries. Their evaluations take into account economic participation and opportunity, educational attainment, health and survival, and political empowerment scores.

A wide-ranging meta-analysis by Doris Weichselbaumer and Rudolf Winter-Ebmer (2005) of more than 260 published adjusted pay gap studies for over 60 countries has found that, from the 1960s to the 1990s, raw wage differentials worldwide have fallen substantially from around 65 to 30%. The bulk of this decline, however, was due to better labor market endowments of women. The 260 published estimates show that the unexplained component of the gap has not declined over time. Using their own specifications, Weichselbaumer and Winter-Ebmer found that the yearly overall decline of the gender pay gap would amount to a slow 0.17 log points, implying a slow level of convergence between the wages of men and women.

Another meta-analysis of 41 empirical studies on the wage gap performed in 1998 found a similar time trend in estimated pay gaps, a decrease of roughly 1% per year.

According to economist Alan Manning of the London School of Economics, the process of closing the gender pay gap has slowed substantially and women could earn less than men for the next 150 years because of discrimination and ineffective government policies. A 2011 study by the British CMI revealed that if pay growth continues for female executives at current rates, the gap between the earnings of female and male executives would not be closed until 2109. Women Chief Financial Officers (CFOs) are paid 16% lower on average as compared to their male counterparts.

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