IOE - Faculty of Education and Society


Workplaces play a key role in reducing or perpetuating gender wage inequalities

18 July 2019

A workshop co-organised by UCL Institute of Education (IOE), Cass Business School and the Institute for Employment Research (IAB) has shown the importance of the workplace in explaining gender inequalities.

Women and men talking in a workplace meeting room

Hosted by the IAB, the workshop showed that linked employer-employee data of all types can help analysts and policy makers understand the mechanisms which lie behind gender wage inequalities. These provide insights that cannot be obtained from traditional surveys of individuals and households.

The workplace or firm is not the sole factor in explaining the gender wage gap but it is important, and it holds more sway in some parts of Europe than others. In one presentation, researchers found that around 30% of the gender wage gap in Italy can be attributed to where you work rather than who you are.

Where you work can affect the relative wages of men and women through two routes: 

  • Firms’ internal pay and promotion policies can lead to men and women with equivalent levels of productivity earning very different wages in the same firm;
  • The labour market may operate in such a way that women spend more time in low-paying firms than men. 

Disentangling these two components of the overall gender wage gap is important in order to know which policies to pursue to close the gap.

Another important topic covered at the workshop was whether having a higher share of female decision-makers lowers the gender wage gap. One study showed that the gender wage gap closes as the female share of managers rises in the workplace, and closes completely once around two-thirds of all managers are women. 

Commenting on these findings, IOE academic Professor Alex Bryson said: “Various explanations are possible, but one is that women in senior decision-making positions are able to reallocate limited resources from men to women, thereby eradicating past inequalities.

“Findings such as these point to the need for a closer examination of wage determination processes, and linked employer-employee data has much to offer here by virtue of having extensive data on pay practices within firms.

“Across Europe today there are renewed efforts to shape firm behaviour through laws attempting to promote greater pay transparency, with evidence that such laws have led to reductions in the gender wage gap in countries such as Denmark and Switzerland. 

“With many other countries now pursuing similar legislative initiatives, linked employer-employee data will be an important tool in monitoring the ongoing effectiveness of such laws.”