Equal pay for equal work, and work of equal value is a priority for OECD countries. Pay inequality is consistently rated among the top three most pressing gender equality challenges by OECD governments – a prioritisation that has remained broadly unchanged since 2016, when the OECD first began surveying countries on their gender equality priorities. Yet considerable pay inequalities persist, with disadvantage accumulating over the life course. Progress in closing the gender pay gap has been painfully slow. Full-time working women in the OECD still earn, on average, 90 cents to every dollar or euro earned by full-time working men. The average pay gap has declined by only nine percentage points (p.p.) since the 1990s. At the current pace of change, it would take decades more to close existing gaps.
To address this persistent challenge, many governments are now mandating pay transparency tools such as employer pay gap reporting, equal pay audits, and gender-neutral job classification systems. Pay gap reporting is set to become the norm: by end‑2026, it is expected that 84% of OECD countries will mandate private‑sector pay gap reporting, up from 55% today – with much expansion in pay transparency approaches driven by the EU Pay Transparency Directive. Almost 40% of OECD countries now require private‑sector employers to conduct gender‑neutral job evaluations, while others recommend or are introducing such practices.
The appeal of these tools is intuitive: greater transparency supplies firms, workers and their representatives with information to advocate for equal pay. These policies can function well in publicising wage gaps and incentivising employers to address the inequalities they find – but only with the right policy design and implementation.
