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Analysis

Explainer: What we learned about the Irish gender pay gap this week

Paul O’Donoghue analyses the 2022 statistics on the gender pay gap in Ireland.

IN IRELAND, ON average, women are paid less than men.

This statement is true – last year, the Central Statistics Office (CSO) estimated average hourly earnings for men were almost 10% higher than for women.

However, it is also often a major source of controversy, with different claims over exactly why men tend to earn more and how the differences between the genders arise.

So, here is a quick rundown on what the gender pay gap is, how it’s measured and what it tells us.

What it is

The gender pay gap refers to the difference in earnings between men and women.

While women are generally found to be paid less than men, theoretically the gap can apply both ways, measuring if women earn more.

Internationally, the gap can be measured in a few different ways and by different organisations, such as Eurostat, which can cause confusion.

To keep things simple, we will focus on how it is measured in Ireland.

The CSO publishes ‘Structure of Earnings’ data which includes a section looking specifically at the gender pay gap.

It compares hourly earnings for men to those versus women. The most recent survey, for 2022, found that on average, men worked 35.7 hours per week and were paid €27.73 per hour.

On average, women worked 30.1 hours and were paid €25.06 per hour – a difference of 9.6%, which is the current best measure of the gender pay gap in Ireland.

This has slowly narrowed over the last decade, with CSO figures indicating the gap was around 13% in 2013.

How it’s calculated 

One of the most important things to understand about gender pay gap reporting – what it does not measure.

In Ireland, at least, it does not look at whether men are paid more than women for doing the same job.

Simply, the CSO calculates the earnings of all male workers. Then it works out the same for all female workers.

All data relates to gross income, ie, before taxes.

It then looks at how many hours each person worked. Then it divides the gross earnings by the number of hours worked, to get average earnings per hour.

Average earnings per hour for women are then compared against men. The difference between the two is the gender pay gap.

What it tells us

This means the CSO data is very high level.

Again to stress – this does not even look at how men and women are paid for doing the same role.

It is a general overview of how much men and women are paid for all jobs across the economy.

It shows that men typically earn more than women on an hourly basis.

Some clues as to why are contained in more data published by the CSO this week – the ‘Distribution of Earnings by Gender’ survey for 2022, which found that high earners are far more likely to be male.

Of those in the top 10% of earners nationwide last year, 70.3% were men while just 29.7% were women.

In the top 1%, the split is even wider – 74.8% were men, while women accounted for just 25.2%.

This is despite the fact that there was a relatively even divide of workers – 51.3% of all employees were male and 48.7% were female.

The division held true for all 13 sectors of the economy measured by the CSO, with men accounting for at least 65% of those in the top 1% of earners in every single economic sector.

Unusually for the CSO, which tends to present its data with minimal commentary, it highlighted earnings in the ‘Education’ and ‘Human Health & Social Work sectors’.

Both are dominated by women, who account for about 75% of the workforce in each sector.

In both sectors, the top 10% of earners was relatively even, although skewed slightly in favour of men at 54% to 46%.

But in the top 1% of earners, in ‘Health and Social Work’ some 65% were men while in Education, 71% were men.

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The Irish pay gap

The information shows that there is a gap between how much men and women earn and that the difference tends to become more pronounced the higher up the income ladder you go.

But trying to find out why is where things get messy.

One of the reasons commonly given for why men tend to earn more than women is because they work in higher paid sectors.

Men are more likely to gravitate to tech or finance, which tend to be higher paid, while women dominate lower paid sectors such as education – so the logic goes.

This is partially true at best.

While there are more men in technology, in finance the gender split is about equal. And even in sectors where women dominate, such as education, the higher earners still tend to be men.

Coming back to hours worked may be a better explainer. On average, men work just over 5.5 hours more than women per week.

This is likely due to several factors, such as women taking maternity leave and being more likely to work part-time than men.

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However, the extent to which men dominate the top 1% of all earners, especially in majority-female sectors such as education, suggests the lack of women in the highest paying roles also plays a significant role.

As the 9.6% figure is based on an average, it is more likely to be influenced by a smaller number of high earners.

This was one of the reasons behind legislation forcing larger companies to publish gender pay reporting information.

A report published earlier this month by executive search firm Spencer Stuart found that women hold 37% of positions in the 20 largest companies on the Irish stock exchange. But when looking at just executive roles on boards – normally the highest-paying jobs – female representation drops to 13%.

This again hints at possible structural issues preventing women from reaching top executive roles and could go some way to explaining the country’s persistent gender pay gap.

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