In 2016, in private firms with 50 or more employees, women’s average hourly pay was 19 per cent lower than that of men. Once the effects of age and socio-professional categories are taken into account, the remaining pay gap stands at 12 per cent. In September 2018, the French government introduced a package of measures aimed at reducing these inequalities. Among these measures, the professional equality index must be calculated and published by all private firms with more than 50 employees from 1 March 2020. Firms must achieve a minimum score on this index; otherwise, they face penalties. The index provides a summary of several indicators, each relating to an important aspect of gender inequality in the workplace, and is calculated on the basis of the employment situation of female and male employees within firms. Using administrative data, we calculate approximate values for the indicators that make up the index for all French firms and provide an overview of the extent of gender inequalities in the workplace as measured at firm level. We also document the effects of certain methodological choices made in calculating the index and suggest possible alternatives. These alternatives could make it possible to better identify firms with significant gender inequalities.
Gender inequalities within firms: what does the professional equality index measure?
The purpose of this note is to provide an approximate calculation of the indicators that make up the index for all French firms, whilst offering an overview of the extent of the measured gender inequalities in the workplace. It also documents the effects of certain methodological choices made in calculating the index, and suggests possible alternatives that could help to better identify firms with significant gender inequalities.
Reference IPP Policy Brief No. 52
Presentation
Key Results
- There are significant disparities in gender pay inequality between firms. In 50 per cent of firms with 50 or more employees, women earn on average at least 5.8 per cent less than men.
- 15.2 per cent of firms have no women among their 10 highest hourly earners. 17.9 per cent have only one.
- The rate of pay increase for women is, on average, lower than that for men. However, these average figures mask wide disparities between firms.
- Despite taking several dimensions of inequality into account, the index could be improved, for example by considering the overall representation of women and men within the firm.
- By applying ad hoc adjustments, the index tends to underestimate pay inequalities and provides no incentive to reduce them within groups of employees where they are below 5 per cent.
