Economics in a picture
The adjusted gender pay gap did not improve over the last 26 years
In 1991, the wages of Portuguese women were 27 percent below those of their men counterparts. Since 1991, the significant inflows of highly qualified women in the labor market changed notably the composition of the stock of employed workers. This evolution translated into 11 percentage point decrease in the raw (or unadjusted) wage gender gap.
However, when we take into account the characteristics of the workers to compute an adjusted gender wage gap, there is no longer an indication of improvement. Indeed, by 2017 the adjusted gender wage gap remained, stubbornly, at 19 percentage points. In other words, the wage gain achieved by women over this period is due to the catching up of their skills (most notably, schooling) in comparison to males, not by a reduction in unexplained component of the wage difference, which is conventionally equated to gender discrimination. Gender discrimination, in this sense, did not ameliorate, it slightly deteriorate over the last 26 years.
For more details see Ana Rute Cardoso, Paulo Guimarães and Pedro Portugal (2016) “What drives the gender wage gap? A look at the role of firm and job-title heterogeneity,” Oxford Economic Papers 68 (2) and Ana Rute Cardoso, Paulo Guimarães, Pedro Portugal and Pedro Raposo (2016) “The sources of the gender wage gap,” Banco de Portugal Economic Studies.
Prepared by Pedro Portugal. The analyses, opinions, and findings expressed above are those of the authors and do not necessarily coincide with those of Banco de Portugal or the Eurosystem.
If you want to receive an e-mail whenever a new “Economics in a picture” is published send your request to firstname.lastname@example.org.