Men, women in same occupation drive pay gap

A whopping 80% of the gender pay gap can be attributed to women being paid less than men within the same occupation, a new economic analysis shows.

After analysing tax data, economic research organisation E61 Institute compared men and women of similar age, their employment and marital status, whether they had children, and academic qualifications working in the same occupation.

It found that women have an hourly wage that is 15% less than the amount men make.

"The factor that does seem to drive the gap wider is personal - being married and having dependent children imposes a penalty on how much women earn compared to men. This penalty exists for women but not for men," said e61 Institute research manager Silvia Griselda.

High-paying occupations such as investment managers, doctors, and dentists are paying women between 10% to 14% less than men.

The study did not find that different characteristics and skills, such as job tenure, full-time status, and education level, explain why women work in different occupations, nor why they are paid less when working in the same occupation than men.

It did, however, find that marriage and parenthood have a much greater effect on women's wages than men's within the same occupation.

"This research busts the outdated myth that the gender pay gap exists because more women are nurses, carers and administrators while more men are lawyers, bankers, and pilots," Griselda said.

Under the Workplace Relations Act 1996, employers must provide equal remuneration to men and women who perform work of equal value.

The Workplace Gender Equality Agency (WGEA) calculates the gender pay gap to stand at 19% or $18,461 per annum on a median basis tilted in favour of men.

The financial services industry's median base salary gender pay gap sits at 23.6% while the median gender pay gap for total remuneration is 26.1%.

The study from e61 also confirmed that the gender pay gap is driven by women not working full-time or not staying with employers for the same periods of time. Moreover, it found that these factors are in fact "quite insignificant".

Elyse Dwyer, a research economist at e61, said one potential reason for the pay gap for men and women working in the same occupation is the type of firms that men and women are working for.

"Men may be more likely to work in high-paying firms, which require less flexibility and longer working hours. e61 Institute is currently undertaking research to understand this. Another potential reason is that women may be less able to pursue leadership opportunities," she said.

The researchers encourage companies to help narrow the gender pay gap by fostering an inclusive environment where all employees are encouraged to take on domestic and parental responsibilities.

This includes more flexibility around when or where work tasks are completed, encouraging job-sharing in leadership positions, and diversifying hiring practices.

"Simply focussing on encouraging women into higher-paying occupations, such as pilots or lawyers, will not be enough to end the pay gap. The bulk of the gains will more likely come from improved workplace flexibility that allows more women to take on higher-paying positions," Dwyer said.