What can be done to help close the gender pay gap?

 

There are several policies that have been shown to have a positive effect in reducing the gender wage gap, especially when effectively combined. Firstly, establishing and enforcing equal pay and anti-discrimination legislation has been recognised as essential in order to establish a legal framework for ensuring equal pay for work of equal value, as well as to provide legal recourse to victims of pay discrimination. International labour standards in the area of equal pay and non-discrimination, namely ILO Convention 100 on equal remuneration forwork of equal value and ILO Convention 111 onDiscrimination (Employment and Occupation) provide important frameworks for governments in this respect. Still, the ILO Committee of Experts has acknowledged that while many countries have ratified ILO C100, a smaller number of countries have actually passed implementing laws or applied the principle of ‘equal pay for work of equal value’ in law and in practice.

 Some governments have also implemented measures to enhance pay transparency in recent years, which make it easier for workers to identify gender disparities in pay, as well as making it easier for governments to identify where violations of equal pay legislation exist (some recent country case examples are highlighted below). In 2023, an EU Directive on Pay Transparency was adopted, under the pay transparency directive, which will require EU companies to share information about how much they pay women and men for work of equal value and take action if their gender pay gap exceeds 5%.

 Measures to tackle gender segregation in occupations are also important. In this respect, education policy can play a role in removing the gender bias in curricula and raising awareness of the likely consequences of male and female choices of fields of study in their careers and earnings. Deliberate policies to recruit and retrain women in underrepresented fields such as STEM can also be helpful, as well as policies that encourage men to move into femaledominated occupations. 

Policies to address women’s underrepresentation in management positions can also have significant effects. Some governments have introduced gender quotas in this respect, including Norway, France, and Belgium. Rwanda has also introduced a 30% quota for women in public decision-making bodies, which has contributed to it having the highest levels of women in leadership in the world. Moreover, setting gender-neutral job evaluation and classification systems can also help to address indirect discrimination in the promotion and pay of women. 

Work-life balance policies can help to reduce gender disparities in employment and, therefore, earnings. They can reduce gaps in women’s careers due to care and prevent them from being forced to leave the labour market altogether. Improving access to affordable childcare services and care services for elderly/dependent relatives have been shown to be essential tools in boosting women’s participation in the labour market after having children. Promoting a more gender-balanced use of family leave has also been shown to promote women’s faster return to the labour market after having children, reduce employers’ discrimination among women of childbearing age, and supports women’s improved career prospects and higher pay. It also helps challenge social norms around women’s roles, as men are encouraged to share caring responsibilities. 

Raising minimum wages has also been shown to be effective in reducing pay disparities between women and men – particularly for low-income workers. As women tend to be overly represented in low-wage work compared to men, increasing the minimum wage can help to boost their wages relative to men’s. Raising the minimum wage is also, more generally, an effective tool in reducing in-work poverty and ensuring decent livelihoods for all workers, both women and men. Adequate universal social protection systems in line with ILO Convention102 and Recommendation 202 are also essential in this regard.

 Finally, ensuring that workers have freedom of association, the right to organise and bargain collectively, as well as the ability to collectively raise grievances have all been shown to reduce the gender wage gap. Evidence shows that collective bargaining contributes positively to reducing pay inequalities between women and men. By setting clear pay standards, collective bargaining agreements (CBAs) reduce the amount of discretion employers have to pay workers. Evidence also shows that labour markets with coordinated and centralised bargaining structures have by and large delivered more egalitarian wage structures which favour more gender equality. However, many governments have taken measures to weaken trade unions and reduce collective bargaining coverage in recent years, which has had a devastating impact on workers’ rights and is contributing to increased wage inequality