Demystifying the Gender Pay Gap: Evidence from Glassdoor Salary Data

March 23, 2016

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This study examines the gender pay gap using a unique data set of hundreds of thousands of Glassdoor salaries shared anonymously by employees online. Unlike most studies, we include detailed statistical controls for job titles and company names. We estimate the gender pay gap in five countries: the United States, the United Kingdom, Australia, Germany and France.

  • The gender pay gap is real, both in the U.S. and around the world. Men earn more than women on average in every country we examined, both before and after adding statistical controls for personal characteristics, job title, company, industry and other factors, designed to make an apples-to-apples comparison between workers.
  • Based on more than 505,000 salaries shared by full-time U.S. employees on Glassdoor, men earn 24.1 percent higher base pay than women on average. In other words, women earn about 76 cents per dollar men earn. However, comparing workers with similar age, education and years of experience shrinks that gap to 19.2 percent. Further, comparing workers with the same job title, employer and location, the gender pay gap in the U.S. falls to 5.4 percent (94.6 cents per dollar).
  • We find a similar pattern in all five countries we examined: a large overall or “unadjusted” gender pay gap, which shrinks to a smaller “adjusted” pay gap once statistical controls are added.

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  • To drill down further into what’s causing the gender pay gap, we divide the overall gap into an “explained” part due to differences between workers, and an “unexplained” part due either to workplace discrimination—whether intentional or not—or unobserved worker characteristics. In all countries, most of the gender pay gap is explained. The “unexplained” part is only 33 percent in the U.S. and is less than half in every country.

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  • The single biggest cause of the gender pay gap is occupation and industry sorting of men and women into jobs that pay differently throughout the economy. In the U.S., occupation and industry sorting explains 54 percent of the overall pay gap—by far the largest factor.
  • Workplace fairness and anti-discrimination remain important issues. But the data show that while overt forms of discrimination may be a partial cause of the gender pay gap, they are not likely the main cause. Instead, occupation and industry sorting of men and women into systematically different jobs is the main cause.
  • Research shows that employer policies that embrace salary transparency can help eliminate hard-to-justify gender pay gaps, and can play an important role in helping achieve balance in male-female pay in the workplace.

Read more about this study on the Glassdoor Economic Research blog.