Exercises: The pay gap

Explain what the gender pay gap is and how it is calculated. How does it differ from direct pay discrimination (paying differently for the exact same role)?

In a company, the average salary for men is $\$2,000$ and for women, $\$1,800$.

1. a) Calculate the pay gap as a percentage of the average salary for men.
2. b) Interpret the result: how many fewer pesos does a woman earn for every $\$100$ earned by a man?

Distinguish between the pay gap, occupational segregation, and the glass ceiling, and give an example of each concept in any company.

Explain two common causes of the pay gap related to maternity and to the concentration of women in certain sectors, and reason why neither of them appears written in anyone's contract.

In a company, men and women in the same position receive the same base salary, but men receive many more "availability" supplements (being reachable outside working hours, accepting last-minute shift changes, etc.).

To analyze it, take these definitions into account:

• Gender pay gap: average difference between what men and women earn, normally expressed as a percentage of men's salary.

• Pay discrimination: difference in pay between men and women who perform work of equal value that is not explained by objective and justified reasons, but by reason of sex (direct if the rule or practice distinguishes by sex; indirect if an apparently neutral rule in fact harms one of the sexes).

1. a) Is there a gap? Is there discrimination? Analyze the case using the definitions above.

1. b) What would you review in a pay audit of that company?

The figure shows the average monthly salary of men and women across three sectors in an imaginary country.

1. a) Calculate the pay gap for each sector as a percentage and rank them from highest to lowest.
2. b) What hypotheses could explain why the gap varies so much from one sector to another?

A supermarket chain discovers a pay gap of $12\ \%$: women make up the majority of checkout staff, while men dominate logistics and store management.

1. a) Analyse the case by distinguishing between horizontal segregation and vertical segregation.
2. b) Propose a plan with three concrete measures and explain which indicator you would monitor to evaluate it.

Assess these three measures against the pay gap: publishing average salaries by gender in companies, equal and non-transferable paternity and maternity leave, and female quotas on boards of directors.

1. a) Explain the mechanism through which each measure would work.
2. b) Which one do you find most effective in the long term? Defend your choice.

"The pay gap is a statistical illusion: it disappears if you compare the same role and the same working hours."

1. a) Argue what truth there might be in this statement and what real phenomena it overlooks.
2. b) Explain why even the pay gap "explained" by hours or sectors can be an economic and social issue.