Abstract
Based on a sample of 36 European countries and the period 2011-2020, we
found that the gender pay gap has decreased over the last decade. The
overall pay gap in industry, construction and services decreased from
15.60% in 2011 to 11.24% in 2020. The largest pay gap in 2011 and 2020
was observed in financial and insurance activities (30.6% and 27.7%,
respectively), wholesale and retail trade (21.5% and 19%), and
manufacturing and information and communication (20% and 17%, and 19%
and 18.9%, respectively), and the lowest in construction and
transportation and storage (-1.43% and 3.57% in 2020).
An analysis of employment by aggregate economic sectors (27
European/OECD countries and the period 2011-2019) shows that 83.17% of
women (panel mean) were employed in the services sector (the same for
men is 59.9%). As the overall service sector has lower TFP growth and
labour productivity (compared to industry), assuming that productivity
growth and wages are linked, this may partially explain the wage gap.
Data for 2018 shows that the average wages in services were lower than
total’s average. 33% of men were employed in the industry while only
12% of women, which under the assumption of higher productivity in
industry sector and higher average wages, may explain the gender pay
gap.
The analysis of the educational outcomes shows that number of females
with tertiary and master degrees surpasses the same for males, but
employed females with tertiary education earn on average less than males
by 22.45%, which is higher that wage gap of female employees with lower
level of education. Statistics shows that 14% of women with tertiary
education graduated from STEM programs, while 34.2% of all STEM program
graduates were female. As STEM graduates are among the highest earning
categories, this may partially explain the pay gap. The female share in
senior and middle management is 32.6% which additionally contributes to
pay differences.
We found that gender pay gap in Europe may partially be explained by the
economic activity in which women are employed, but also by the program
in which they obtained their tertiary degree.