Economy
Posted: 2 months ago

Gender Pay Gap Issue in Georgia amounts to 37% - What Causes the Dramatic Gap

Gender pay gap has become a prominent issue across the world. Indeed, women on average earn 25% less than men in a number of Western countries. This gap has negative effects not only on society as a whole, but also on economic growth.

According to McKinsey & Company, achieving gender parity could increase the economy by two digit percentage points.

The aim of this newsletter is to briefly examine the roots of the gender pay gap3 in Georgia, to reveal the differences of average wage in various sectors, distributions of labour force according to gender and hourly wages for males and females.

Due to data limitations, only the wages of hired employees are considered.

Currently, the average wage for men in Georgia is 1360.5 Lari and for women it is 856.2, meaning the gender pay gap of 37.07%. The gap can be traced back to 2001, when the average female worker’s wage was nearly half of the average man’s and the gap was 49%.

In spite of the fact that absolute differences between wages have been rising, the percentage has been steadily declining since 2005. Between 2005 and 2013, the pay gap fell from 51.06% to 36.43%, before gradually rising to 37.07% today. If the aforementioned
trends of the last 10 years continue, it would take 30 years to completely eradicate the gap. But with the past 5 year trends, women’s and men’s average wages will never converge.

In 2018, the working age population of Georgia, (those aged 15 and above), was 3.034 million. Women accounted for 53.6% of the working age population, but made up only 46.6% of the labour force, which means that far more women choose to stay out of the labour force.

Female labour participation rate, which is equal to labour force divided by working age
population, has increased from 54.4% in 2010, to 55.6% in 2018. This slight increase could be attributed to the shrinking population, as the actual labour force has decreased. The current female participation rate of 55.6% seems modest, especially when compared to the 73.6% participation rate for men. Even when the pensioners deducted from both genders’ working age populations, women’s participation rate is 77.8%, while for men it is still higher and is equal to 86.2%.

This difference could be explained by various cultural stereotypes and, according to the empirical evidence, the lower female participation rate directly contributes to the pay gap.

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