The "who, what, when and where"
of gender pay differentials
by Marie Drolet
Business and Labour Market
Analysis, June 2002
The evolving workplace series, no. 4
This paper
addresses the "who, what, when and where" of gender pay differentials.
The "who" addresses the characteristics of the individual worker, the
"what" focuses on the tasks of the worker and the "when" addresses
the employment contract between the worker and the workplace. The "where"
considers the contribution of specific workplace characteristics—such as
high performance workplace systems, foreign ownership, non-profit organizations,
training expenditures per employee, workplace part-time rate, and the educational
requirements of the job—to gender pay differentials. No previous Canadian
study has examined the male-female earnings differential in this context.
Most other studies on the gender wage gap rely on the assumption that wages are
tied to the individual worker and this approach has dominated the empirical literature.
The main reason for this approach is the type of data widely available to researchers—that
is, large household surveys containing an abundance of individual information
but very little information about employers. Using matched employee-employer data
from the 1999 Workplace and Employee Survey, the contribution of "who you
are", "what you do", "when you work" and "where
you work" to gender pay differentials are explored. Like other studies that
use standard decomposition techniques, this one finds that men still enjoy a wage
advantage over women. Unlike other studies that estimate the explained component
to be about 50%, the inclusion of workplace characteristics—in particular
more accurate industry measures—tend to increase the explained component
to around 60%. The "where you work" accounts for more of gender pay
differentials than "who you are", "what you do" and "when
you work": about 36.2%, 10.6%, 15.8% and -1.4% respectively. Yet despite
the inclusion of the new WES variables, a significant portion (38.8%) of gender
pay differentials remains unexplained.
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