Gender Pay Gap Does it exist?

By
Yonathan Abebe

Advisor:
Tewdros Gemechu

February 2019
Abstract
 Introduction

In this world we live in, we need food, shelter and water, which are basic, to
survive each and every day. To do that, as a society, we started working by creating
jobs and then created wages to do so.

Therefore, to make a living both men and women have to work to get paid.These
payments made for the same job is found to be imbalanced. This imbalance has
recently gotten attention and trending as of late due to social media and the fact that
people are discussing more openly than before.

This Gender pay gap is one of the issues that is related to gender inequality. This
inequality varies considerably in different countries. We may find higher difference in
one country versus the other and vice versa, find one lower in pay gap than the other as
many studies have shown. There are also other factors that affects gender pay gap not
related to discrimination such as level of education and capabilities of doing the job as
efficient and effective us the other. It can also be seen in the same gender that level of
education and capability of doing the job has a pay gap.

So this paper will try to show the existence of gender pay gap as a whole and in
the context of 3rd world country such as Ethiopia. This study would be important to
distinguish the different cause of the pay gap and the gender influence that caused the
pay gap.
 Statement of the Problem

Recent years, due to the inequality being a hot issue, there have been different
level of spectrums quantifying this inequality, one of which is gender inequality. This
being one of the direct form of discrimination that affects directly on day to day
livelihood, gender inequality here has a significant psychological and financial effect on
that person affected. Hence, study for gender pay gap existence, how to quantify it if it
exists and why there is gap would play a vital role in putting the public at ease by
answering their question.

Gender pay gap studies or any other inequality for that matter, if it exists the
most important thing is to address the issue at hand. what you do when you address the
issues is state facts and have a Consensus on what to be done. To do just that you
need to have a good knowledge of that matter by conducting various research and
creating awareness.

In gender pay gap inequality, knowing and understanding would produce this
inequality to diminish or bring about fruitful harmony between genders for the society. It
would form basis for the development of the country as a whole and boost productivity.
 Objective

The object of this study is to assess if any the gender pay gap reality in the
current state of our society. It also attempts to understand what the reason for this pay
gap is and what should be done to minimize this gap. Which will result in:-

- A productive society
- It will solve problem related due to gender pay gap faced in work environment
- Individuals affected by the pay gap will benefit with equal pay for equal work
done.

It will help with the change in mindset that is related with pay gap between
genders. Assist in understanding the cause of this pay difference and establish ways to
be handled.
 Literature Review

There have been a different studies conducted on gender pay gaps which has
shown there exist pay difference between genders. Wedy olsen (university of
Manchester) and Silvia, Modelling gender pay gaps is one of the studies which has
investigated on the gender pay gap and found that there has not been any change in
pay gap for fulltime employees since the 1990s and in female part time vs fulltime male
employees since the mid-1970. Which they used regression model in British house hold
to model to show gender pay gap. what was found was that the hourly earnings for
those employed full time in Britain in 2003 was that 18 percent difference between
genders in pay. In addition to that those women working part time and men working full
time was found to be higher with percentage of 40 percent.

There data set included 10,000 adults working in a British house hold and the
data was weighted to be representative of nationalities and shows that the gender pay
gap in life time working pattern account for 36 percent. The state of the labor market in
that country is rigid, meaning that a certain occupation tending to be dominated by the
other gender. This would most definitely has affect the pay gap as it would create small
work environment and non-unionized firms. The research shows that being small and
non-unionized account in addition of 18 percent in the pay gap and 38 percent due to
direct discrimination and differences in the labor market interest in women as compared
with men.
 The remaining is due to low education background which account 8 percent. The
considered factors which affect the wages where: -

 Time
 Fulltime education
 Fulltime employment
 Work gaps or interruption of work
 Percentage of gender working together
 Discrimination

This according the study showed that those with fulltime education per year,
hourly wages increase by 6 percent. For those working part time as supposed to fulltime
hourly wages decrease by 1 percent in addition loss of 3 percent gain every due to
raise. Meaning full time employee has 3 percent increase than the part time employee.

Due to work gap or absence in a year would result in a penalty of hourly wages
decrease by 1 percent in addition to gain that year would have yield. Expecting ten
percent male proportion higher than female hourly wages will increase by 1 percent.

Discrimination due to preference of one than the other on work on top of that
direct discrimination or being female would account to be about 9 percent in reduction of
hourly wage. Which accounts a lot from discussion above and is very important and
noticeable gap can be seen.

There are also cases where one factor may be related to the other such as
absence from work for 2 years and percentage of gender in the work environment. The
cumulative effect is massive as can be seen in one working part time vs fulltime would
render to one third difference.