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Some notes on measuring pay gaps

Author

Listed:
  • David C. Maré

    (Motu Economic and Public Policy Research)

  • Lyn Brieseman

    (Strategic Pay Ltd)

Abstract

The formula for measuring the gender pay gap is widely used and generates internationally comparable measures. It measures how much lower women’s pay is than men’s, as a proportion of men’s pay. The size of the gender gap is not directly comparable with the size of inter-ethnic gaps because inter-ethnic gaps are generally measured as a proportion of a different group’s pay (not that of men). These notes discuss choices and issues that arise when defining pay gaps among more than two groups. It discusses both the formula used for calculating pay gaps and the choice of pay measure. When examining pay gaps by ethnicity, there are several plausible ways of choosing a comparator (pay compared with what?) and a scale (as a proportion of what?).

Suggested Citation

  • David C. Maré & Lyn Brieseman, 2025. "Some notes on measuring pay gaps," Motu Notes Note_55, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:mnotes:note_55
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    File URL: https://motu-www.motu.org.nz/mnotes/Note_55.pdf
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    References listed on IDEAS

    as
    1. Isabelle Sin & Steven Stillman & Richard Fabling, 2022. "What Drives the Gender Wage Gap? Examining the Roles of Sorting, Productivity Differences, Bargaining, and Discrimination," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 636-651, October.
    2. New Zealand Treasury, 2018. "Statistical Analysis of Ethnic Wage Gaps in New Zealand," Treasury Analytical Papers Series ap18/03, New Zealand Treasury.
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