Statistics Iceland’s analysis on the gender pay gap, in cooperation with an action group on equal pay appointed by the government and the social partners, shows a narrowing gender pay gap during the period 2008-2016.

The adjusted gender pay gap measured 6.6% in 2008 but was down to 4.5% in 2016 using an ordinary least squares method for each year. By using the whole dataset a less biased estimate can be decomposed into explained and unexplained parts. The unexplained part of the pay difference was estimated to be 4.8% for the years 2008-2016 while the explained part was 7.4%. The explained part reflects what is explained by the model in the analysis while the unexplained is what the model cannot explain.

If the whole period is broken into three-year periods the unexplained part of the gender pay gap has decreased from 4.8% in the years 2008-2010 to 3.6% in the years 2014-2016. 

Decomposition on adjusted gender pay gap 2008-2016,%
  Explained Unexplained Total
2008-2010 9.7 4.8 14.5
2009-2011 8.6 4.6 13.2
2010-2012 8.2 4.6 12.8
2011-2013 7.9 4.5 12.4
2012-2014 7.2 4.4 11.6
2013-2015 6.8 4.1 10.9
2014-2016 6.6 3.6 10.2
2008-2016 7.4 4.8 12.2

The analysis on the gender pay gap in the years 2008-2016 is based on Statistics Iceland’s data on wages combined with demographic data. The whole dataset comprises about 615 thousand observations for individuals aged 18 to 67. This analysis is a sequel to an analysis from 2015 for the years 2008-2013. Data have been updated with additional years 2014-2016 and data quality on education and occupations has been improved. Due to these changes, the previously published gender pay gap is now estimated to be lower than in the initial analysis.The gender pay gap can be estimated by various statistical methods. An undisputable value of the gender pay gap cannot be measured because of imponderables such as limitations of data and uncertainties in the choice of explanatory variables and statistcal methods. This also applies to this analysis.

For further information see the Statistical Series Analysis on the gender pay gap 2008-2016

Analysis on Gender Pay Gap – Statistical Series