The Higher Education Authority of Ireland (HEA) has released the results of its 2018 Graduate Outcomes Survey. The survey collects data on the paths that those who graduated higher education in 2018 took. The survey reveals that just 2 years after leaving higher education, there is already a gender pay gap between male and female graduates.
Section 8 of the report breaks down graduates’ earnings by gender, revealing a raw gender salary gap of almost €4,500 for all graduates and almost €3000 for younger graduates. However, after controlling the data for potential earnings determinants, the gap for all graduates sits at less than €2500 and at less than €1700 for younger graduates. The €1700 gap is further reduced to under €1300 when field of study and institute are controlled for.
After controls, the report shows that the mean earnings for male graduates is €37,517 while the mean earnings for female graduates stands at €35,063. For younger graduates, this gap is slightly reduced as average male earnings are €31,950 and average female graduate earnings are €30,277. The average earnings for all graduates are €36,248, while the average earnings for younger graduates is €31,065.
The Blinder-Oaxaca decomposition is a statistical method that decomposes differences in mean outcomes across 2 groups into a part that is due explained factors (for example number of years of education or experience in the labour market), and a part that is due to unexplained factors (meaning one group being treated more favourably than the other even when their qualifications are the same). The unexplained portion can be interpreted as a measure of labour market discrimination which here would be due to gender.
The report states that, using the Blinder-Oaxaca decomposition on the earnings-by-gender data, shows that field of study choices are a key factor in the gender salary gap but also that an unexplained gap remains after controlling for all available determinants. The Report acknowledges that the analysis does not include key factors such as hours worked, earnings expectations and negotiation skills. It therefore concludes that it is not possible to isolate gender discrimination in its analysis, noting that including a number of key determinants partially explains why graduate salaries differ by gender.
The report states that the difference between mean male and female earnings is €2978; 44% (€1305) of that gap is due to explained difference, while 56% (€1673) is due to unexplained difference. The explained portion of the difference is that which is accounted for by the differences in characteristics between the groups. The report notes that not all factors can be controlled for in the data so that accounts for part of the unexplained difference, so the unexplained difference should not be assumed to be discrimination-although discrimination may partially account for the unexplained gap.
A breakdown of the data shows that the main factor contributing to the explained difference is field of study as there are more male graduates from Engineering and ICT (higher earning fields) and less from Arts and Humanities (lower earning fields). Other factors that contribute to the explained gap are proportionately more males on permanent contracts and hence earning between pay than temporary contracts. The Report cites the main contributing factors to the unexplained gap as higher rates of return for males working in different countries and higher rates of return for males that achieved a 1st or 2.1 compared to females who achieved the same degree grades.
As of 2017, the gender pay gap in the European Union is 16%. This means that women earn 84 cents for every €1 men earn. The gap has slowly decreased by 1% each year over the last 7 years. The gender wage gap in Ireland was 13.9% as of 2017, while Romania achieved the smallest EU wage gap at 3.5%. The EU wage gap increases with age so we can expect the wage gap revealed by the HEA survey to increase with graduates’ age. The European Commission has developed an Action Plan which prioritises 8 areas where action is needed to address the underlying causes of the gender pay gap.
Other statistics collected by the HEA Graduate Outcomes survey indicate that 80% of graduates are working or due to start a job, 90% of employed graduates are working in Ireland and 13% of graduates are engaged in further study.
The data also revealed, after controls, that 2018 graduates of universities and colleges earn an average of €36,903 while graduates of institutes of technology earn on average €35,175. When broken down by field of study, the report shows that ICT graduates have the highest mean earnings at €37,714, while Arts and Humanities graduates have the lowest mean earnings at €32,397.
Amy Doolan – Assistant News Editor