The gender wage gap in Canada: 1998 to 2018

Building on the work of Baker and Drolet (2010) and Drolet (2011), this study examines the evolution of the gender gap in average hourly wages since 1998. In choosing to examine hourly wages, as opposed to other measures of earnings, this study highlights gender differences in pay for an equal unit of work. The analysis includes both full- and part-time employees, and is restricted to people in the core working ages of 25 to 54. Specifically, this study addresses three questions: How did the gender wage gap in 2018 compare with the gap in 1998? What factors contributed to the narrowing of the gender wage gap between 1998 and 2018? What factors explained the remaining gender wage gap in 2018, and did these factors differ from those that explained the gap in 1998?

Highlights: (1) in 2018, female employees aged 25 to 54 earned $4.13 (or 13.3 per cent) less per hour, on average, than their male counterparts; in other words, these women earned $0.87 for every dollar earned by men; (2) the gender gap in hourly wages has narrowed by $1.04 (or 5.5 percentage points) since 1998, when it was $5.17 (or 18.8 per cent); (3) the reduction in the gender wage gap between 1998 and 2018 was largely explained by changes in the distribution of men and women across occupations; women's increased educational attainment; and the decline in the share of men in unionized employment; (4) the two largest factors explaining the remaining gender wage gap in 2018 were the distribution of women and men across industries, and women's overrepresentation in part-time work; these were also the largest explanatory factors behind the gap in 1998; and (5) similar to other studies, nearly two-thirds of the gap in 2018 was unexplained; possible explanations for this portion include gender differences in characteristics that were beyond the scope of this study, such as work experience, as well as unobservable factors, such as any gender-related biases.

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