Minimum wage growth, employer awareness helping reduce gender pay gap

Euro bills and cents.
Euro bills and cents. Source: Karin Koppel/ERR

Last year, the gender pay gap in Estonia shrank to the smallest on record at nearly 15 percent, according to Statistics Estonia data released Thursday. The Ministry of Social Affairs believes that the growth of the minimum wage as well as employer awareness have helped reduce the gap.

In 2021, the average gross hourly wage stood at €9.97 for men and €8.48 for women; in terms of monthly earnings, this made for a difference of nearly €300.

The gender pay gap in Estonia has been on a clear downward trend since 2013, when the gap stood at nearly 25 percent, or 10 percentage points higher. On year, the gender pay gap had shrunk by 0.7 percent.

For years, the gender pay gap in Estonia was the largest in Europe, but it was overtaken by Latvia last year. Estonia, meanwhile, has seen among the fastest reductions in the size of the gap in recent years.

"One factor we can highlight is the impact of the growth of the minimum wage on reducing the pay gap, but that's not enough," said Lee Maripuu, head of gender equality policy at the Ministry of Social Affairs. "One significant party to the reduction in the pay gap has been employers, whose awareness of the problem has increased significantly over the years."

According to Maripuu, one of the primary causes of the gender pay gap is the fact that men and women tend to work in different fields, and in different positions.

"Women account for the majority in the social, educational and healthcare fields, which are lower paid," she explained. "And if we look at the information and communications technology (ICT) sector, which is seeing a big labor shortage as well as wage growth, less than a quarter working in it are women."

The biggest gaps between women's and men's wages are currently in the finance sector.

"For seven years we've been working on reducing and dismantling the pay gap, and we've been analyzing the reasons," said Ülle Pind, head of human resources at Swedbank. "The reasons go back to that same choice of major. People with varying educational backgrounds can come work as client advisers. If someone has graduated with a degree in social sciences, they can take up the client adviser profession. Advancement will start to be impacted by professional background and choices, such as whether you have a degree in economics. The wage gap begins to emerge at the middle management level."

Pind noted that the foundation for future wage gaps is laid largely by choice of major when entering university.

"For some reason, many of the girls who excel in STEM subjects in high school choose social sciences majors in university," she explained. "There aren't enough jobs in these fields for social sciences majors, which is why they start looking for work, and if [this work] doesn't align with their major, then their starting position is inevitably weaker as well."

Pind noted, however, that this trend is changing, and young people have started opting for a bigger variety of professions.


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Editor: Aili Vahtla

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