Wage gap wider among professionals

Wage gaps are particularly wide in certain sectors, such as banking Keystone

International Women's Day is highlighting wage discrimination between men and women, and a new study shows that the gap is wider among the highly-skilled.

On average, women earn 21.3 per cent less than their male colleagues for the same job, according to the study by the University of St Gallen.

Generally, lower qualifications, less work experience and women’s interruption of their careers for maternity and child care are cited as reasons for the lower pay.

However, the St Gallen study rules out arguments that women earn less because they tend to work simpler jobs, like secretarial work, in every economic sector.

Federal statistics

The study is based on the 1998 Swiss Wage Structure Survey of the Federal Statistical Office, which collects data on 450,000 people.

As expected, the wage differential between women and men was smaller in low-skilled jobs, 18 per cent compared with 28 per cent lower pay for women in more qualified positions.

“Economically, this makes sense,” says Alfonso Sousa-Poza, who conducted the study, “since the secondary segment is more exposed to competitive market forces.”

The study examined three occupational fields: the catering business, health care and banking. Sousa-Poza divided the groups into two sectors, the first with more qualified positions and the second, those with low salaries and low-skilled jobs, which fluctuated and were subject to stronger competition.

He adjusted for such wage-altering factors as education, professional experience, part-time work and years in the firm. The result is an “unexplained gap”.

Unexplained gap

In the banking and insurance industry, the unexplained gap amounted to 21 per cent, after controlling for differences in endowments. In the health industry the corresponding number was 11 percent and in the catering business, qualified women earned 13 percent less than their male colleagues.

“I was surprised to find such large unexplained wage differentials between men and women”, Sousa-Poza admits.

When he studied the banking industry even more closely, analysing employees in personnel, consulting and secretarial categories, the ” occupations, the wage gap was even more striking: 30 percent in the male dominated consulting group, 27 per cent in personnel, and 20 per cent in the female dominated secretarial group.

“I chose a very homogenous group: people of the same branch, with the same job and the same qualifications,” Sousa-Poza says. After controlling for the wage influencing factors, a large unexplained residual of 16 to 19 percent remains.

The results provide “strong evidence” of wage discrimination in the banking sector, among others, Sousa-Poza says. “Furthermore, they show that occupational segregation does not explain the wage gap between men and women.”

While it is not clear why the wage gap is larger in certain sectors, such as banking, Sousa-Poza said that more “wage transparency” – openly setting standards on which pay is based, could help to end discrimination in pay.

by Priscilla Imboden