The economics of the gender pay gap
Shes Price(d)less is the third in a series of reports that uses econometric modelling applied to data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey to unpack the factors that contribute to the gender wage gap.
The report shows that deeply entrenched gender stereotypes about the roles men and women play in paid work and caring continue to be the driving force behind the gender pay gap. The report found that:
- Gender discrimination continues to be the biggest contributing factor to the pay gap, accounting for almost two-fifths (39%) of the gender pay gap,
- The combined impact of years not working due to interruptions, part-time employment and unpaid work contributed to 39% of the gender pay gap.
- Occupational and industrial segregation continue to be significant contributors to the gender pay gap at 17%.
Understanding the drivers of the gender pay gap is critical to designing interventions to close the gap.
The report’s analysis shows that closing the primary drivers of the gender pay gap is equivalent to $445 million per week, or almost $23 billion per year.
DCA CEO Lisa Annese said:
For too long, the Australian gender pay gap has remained stubbornly high. Despite excellent work that many DCA members are undertaking to close the gap in their own organisations, structural inequalities and rigid gender-norms continue to diminish our capacity pay equality across the economy.
We need to challenge ideas that the vast majority of caring responsibilities and housework should fall to women and tackle the social norms that see the majority of men and women working in different industries and different types of jobs.
If we are successful in doing this, we can create benefits not just for women, but the Australian economy as a whole.
The work that we need to do to make these changes is not simple, but as this report shows, there are be huge potential gains for the Australian economy if we do.
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Suggested citation: KPMG, Shes Price(d)less: The Economics of the Gender Pay Gap, Prepared with Diversity Council Australia (DCA) and the Workplace Gender Equality Agency (WGEA), Sydney, KPMG, 2019.