In 2005, the gender pay gap in Estonia was 25.4%, which represents the biggest difference in earnings between men and women in the last six years. It is not yet clear if this situation indicates a new trend or just a temporary fluctuation. Segregation of the sexes in respect of working time, sector and occupation explains much of the pay gap, while age and education also have an impact on the wage differences.
In December 2006, Statistics Estonia (Eesti Statistika) published two surveys Earnings 2005 and Women and Men, which include, among other things, an analysis of the gender pay gap in 2005. The latter report combines various data from Statistics Estonia, such as the Labour Force Survey, Social Survey and Household Budget Survey, as well as data from other sources, such as Eurostat.
The Earnings survey gives data on October earnings. Calculations of the average gross hourly earnings were based on payments for actual worked time. The hourly earnings do not include irregular bonuses and allowances, such as quarterly and annual bonuses or other allowances, or remuneration for time not worked, for example, holiday pay or benefits.
Gender pay gap
In 2005, in Estonia, the average gross hourly earnings of employees stood at EEK 47.42 (€3.03, as at 2 February 2007). Men earned on average EEK 55.22 (€3.53) and women earned EEK 41.22 (€2.63), which is 25.4% less than the earnings of their male colleagues and represents the largest pay difference since 1999. The gender pay gap had narrowed from 28.9% in 1994 to 23.5% in 2004 (Figure 1) but continues to remain one of the widest in the European Union.
Gender pay gap as a proportion of men’s hourly wages, 1994–1995 (%)
Part of the gender pay gap may be caused by differences in hourly wages between full-time and part-time workers. During the period from 2000–to 2004, part-time workers earned on average 22.8% less than full-time workers; this proportion declined to 20.7% in 2005. About twice as many women as men work part time.
In 2005, there was a significant increase in employment among women as 10,500 of them entered the workforce, compared with just 1,400 men. However, most of the increase in female employment occurred in the hotels and restaurants sector, where wages are relatively low.
Sectoral and occupational segregation
Much of the pay gap is explained by the number of women employed in lower paid sectors and occupations. Women’s gross hourly earnings are lower across all economic sectors, except in forestry where their earnings exceed those of men by 10%.
In 2005, 43.2% of women worked in sectors where the salary level was lower than the average. Some 15.8% of the female working population worked in education, 12.4% worked in retail and wholesale trade, 11% in healthcare and social welfare, and 4% in hotels and restaurants. At the same time, in 2005, men mainly worked in sectors where wages were higher than average. The general pay gap between high paid and low paid employees – that is, the wage distribution – is also relatively wider in Estonia than in other countries.
Comparing the average gross hourly earnings of men and women by major occupational groups, the gap appears largest for those in the craft and related trades sector, at 32.8%, and is smallest for skilled agricultural and fishery workers, at 6.6%. In public administration, defence and compulsory social security, the gap was also relatively low (7.6%).
Among managing directors and chief executives in the 25–64 year age group, 62% are men and 38% are women. At the same time, in this age group, more than twice as many women as men are unskilled workers.
Influence of education
The gender pay gap is smallest for employees both with the highest and with the lowest education levels, that is, employees with a doctoral degree (23.41%) and employees without a basic education (22.52%). The biggest difference in salary is for employees with a vocational education, at 31.46% (Figure 2).
Gender pay gap, by level of education, 2005 (%)
Influence of age
The gender pay gap is smallest for employees younger than 30 years old, at only 18.2%. Conversely, the difference is greatest among employees aged 30–39 years old, at 28.4% (Figure 3). Subsequently, the pay gap gradually decreases with age. Furthermore, the employment rate of 25–34 year old women is significantly lower than that of men, since women generally stay longer in education and have more family obligations.
In fact, the biggest gender difference in yearly net income emerged in the youngest age groups. In 2003, the yearly income of 30–34 year old women was 38.6% less than men’s. This gap decreased with age.
Gender pay gap, by age, 2005 (%)
Commentary
Women in Estonia are more highly educated than their male counterparts, and they are also more active in lifelong learning, which means, in theory, that they are more productive in their work. However, previous studies have shown that women are less proactive in searching for work, and they earn lower salaries than men (Kallaste and Rõõm, 2004) (EE0412NU01). Moreover, cultural attitudes in relation to women at work and their remuneration are not yet entirely favourable towards attaining equality in the workplace. According to the survey ‘Monitoring gender equality’, 43% of men and 25% of women agree that men’s salaries should be higher than those for women (EE0609019I).
Reference
Rõõm, T. and Kallaste, E., Naised-mehed Eesti tööturul: palgaerinevuste hinnang, Poliitikauuringute Keskus PRAXIS Poliitikaanalüüs No. 8/2004.
Marre Karu and Liis Roosaar, PRAXIS Centre for Policy Studies
