Gender pay � bridging the divide | 69
such circumstances, female employment is skewed towards higher
skilled individuals and the measured gender pay divide is smaller.
CHALLENGE 6
The legal evidence
The IEA paper
1
cites figures showing that the number of tribunal
cases relating to equal pay increased from 8,200 to 44,000 over
the 2004-05 to 2006-07 period � an extremely low figure when
compared with total female employment. And only a small
proportion of these were successful.
CHALLENGE 7
The market effect
Theory and practice suggest that the market is the friend and not
the foe of equal pay for equal work. Research suggests that
countries with greater competition tend to display lower gender
pay gaps. OECD research also suggests that product market
regulation alone can explain between 20 and 40 per cent of cross-
country variation in the gender wage gap.
CHALLENGE 8
Compensating differentials
Men may well engage in certain types of work that require a
compensating differential in pay. The most obvious examples
would be night shift work, outdoor work or other activities
perhaps involving a greater risk to personal safety.
CHALLENGE 9
Sector shift
The shift towards a `weightless economy' and to sectors where
female employment is more concentrated � such as ICT, health and
education � should favour a further narrowing in the pay divide.
CHALLENGE 10
Econometric modelling
Recognition that pay statistics alone neither prove nor disprove
gender pay discrimination has led to the use of econometric
modelling. Using this technique, the gender pay gap is broken down
using multiple regression, into two parts:
Differences in observable characteristics (education, years
of experience etc).
A residual (which may be attributable to discrimination, at
least in part).

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