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Pay Transparency Tools to Close the Gender Wage Gap

image of Pay Transparency Tools to Close the Gender Wage Gap

Women continue to earn less than men, in spite of major societal changes over decades and many labour market, educational and public policy initiatives that have targeted the gender wage gap. To address this persistent challenge, many governments are now mandating promising new pay transparency tools like employer pay gap reporting, equal pay audits, and gender-neutral job classification systems.

These policies hold considerable allure. Pay transparency offers a relatively simple and intuitive way to identify and address gender wage gaps when they occur in a workplace. 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. This report presents the first stocktaking of pay transparency tools across OECD countries and explores how such policies can help level the playing field for women and men at work.

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Equal pay auditing systems

Nine OECD countries have mandated comprehensive equal pay auditing processes for private sector employers. Equal pay audits are the most comprehensive government strategy for using wage transparency to address gender wage gaps. These audits require an analysis of the proportion of women and men in different positions, an analysis of the job evaluation and classification system used, and detailed information on pay and pay differentials on the basis of gender – and they typically identify follow-up actions that employers should take to close gender pay gaps. Monitoring and enforcement mechanisms vary across countries, and more evaluations are needed to understand the effects of equal pay auditing systems on wage outcomes.

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