Gender pay gap occurs when the pay between men and women is unequal with men earning more. The causes of wage inequality are many and include discrimination, education, and open areas of occupation just to name a few. This economic inequality occurs in nearly every country, from the most developed to the least. Below is a list of members of the Organization for Economic Cooperation and Development (OECD) with the highest pay gaps.
Gender Pay Inequality in OECD Countries
South Korea reports the biggest gender wage gap of any OECD country with 36.6%. This means that 36.6% of working women have a lower income than men. The disparity in South Korea is 2.5 times higher than the OECD average. Some claim this is because higher paid women often leave their job to take care of family.
Estonia is next on the list with 31.5% of women in the workforce earning less than men. This is particularly true in the financial sector. Although the income inequality is so stark here, the employment rate of women in this country is one of the highest in Europe.
Number 3 is Japan with a gender wage gap of 26.59%. Once explained away by a difference in educational attainment between men and women, the OECD now says that even with increased education in women the gap has not decreased. Women are not likely to hold executive positions here either, only 5% of board members are female.
Next on the list is a 21.83% wage gap in Israel. The country has no policies to counter this widening disparity which is higher in the private sector than the public. Women tend not to negotiate higher salaries but more than that is the industries in which they work. Where it is socially acceptable for women to work, the earning potential is lower.
Following Israel is the Netherlands where 20.46% of women earn less than men. Although the Netherlands is considered one of the most gender equal countries in the world, this equality has not spread to salaries. One explanation for this is the time that women take off from their careers for childbirth.
Turkey comes in just after the Netherlands with a 20.06% division in pay equality. Stating this differently, the average income for men is $28,318 while women earn just $8,813. Women here do not attain the same level of education as men which keeps them out of higher paying positions.
Other OECD member countries with surprising gender wage gaps are Canada at 18.97%, Finland (18.73%), Switzerland (18.52%), and Austria (18.19%).
Effects of Unequal Pay
Although increased access to higher education has somewhat reduced the pay gap in many countries, it has yet to make salaries equal. This inequality has results that go beyond keeping women in poverty and without retirement accounts. Companies are also affected as research shows that increased female board member participation also increases profits for the organization. Researchers have also determined that a simple 1% decrease in the gender gap would increase GDP by $260 per individual. Increased pay also leads to increased spending which could stimulate economies by as much as 4%. Reducing the gender gap is necessary to promote healthy economies and societies.
Worst Female Pay Inequality Among OECD Countries
|Rank||Country||Decrement In Female Wages Relative To Male Wages|
|1||South Korea||36.6% gender wage gap|
|2||Estonia||31.5% gender wage gap|
|3||Japan||26.59% gender wage gap|
|4||Israel||21.83% gender wage gap|
|5||Netherlands||20.46% gender wage gap|
|6||Turkey||20.06% gender wage gap|
|7||Canada||18.97% gender wage gap|
|8||Finland||18.73% gender wage gap|
|9||Switzerland||18.52% gender wage gap|
|10||Austria||18.19% gender wage gap|