The unadjusted gender pay gap in Iceland was 14% in the year 2019 and 13.6% in the previous year. The gender pay gap increased with age and measured 1.9% for employees aged 24 and younger, 13.3% for the age range 35-44 years old and 21.2% for 55-64 year olds. The unadjusted gender pay gap is defined as the difference between the average gross hourly earnings of men and women expressed as a percentage of the average gross hourly earnings of men.

There was a substantial difference in gender pay gap between economic activities. The lowest pay gap was in Accommodation and food service activities (I), or 6.8%, and the biggest gap was in Financial and insurance activities (K), or 33%. The gender pay gap also varied greatly between occupational groups, with the biggest gap amongst technicians and associate professionals (3), while no gap was measured amongst clerks (4) in 2019.

It should be noted that occupations within economic activities and occupations groups can vary greatly between gender and gender segregated labour market is reflected in the gender pay gap. For example, the most common occupation of women in the occupational group of professionals (2) were primary education teaching professionals, whereas it was most common for men to be business professionals. The high gender pay gap in Financial and insurance activities (K) is consistent with the wide distribution of salaries in that economic activity.

Since 2008, the gender pay gap has decreased. In 2019 it was 14.8% in the private sector, 14% in the central government and 7.2% in the local government. The low gender pay gap amongst local government went hand in hand with a more compact distribution of wages than in other sectors and high proportion of women as over 7 in 10 employees were women.

The gender pay gap fluctuates from year to year. Partly because the dataset is based on a one single month in the each year, October. Payments part of average gross earnings paid each pay period, like payments regarding overtime and shift work, can vary from year to year and sector to sector. The gender pay gap can also be affected by the timing of collective agreements. In 2019, for example, only the private sector had reached their collective agreements, with subjacent pay raises, while the public sector, for the most part, had not. Additionally, fluctuations can be caused by different composition of data as quality increases each year. For example in 2018, the economy activity Accommodation and food service activities (I) was added to the dataset.

Earnings distribution can affect the gender pay gap
The total distribution for gender shows that proportionally more women have lower paying jobs, while proportionally more men are in the far right tale of the distribution, which means more men are in the higher wage category. This is partly due to men working more overtime, which increases the average gross hourly pay, and partly due to gender segregated labour market.

About unadjusted gender pay gap
The calculation of the unadjusted gender pay gap is according to Eurostat‘s methodology of the Stucture of Earnings Survey (SES). The gender pay gap in unadjusted form represents the difference between average gross hourly earnings of males and of females as a percentage of average gross hourly earnings of males. The calculation is based on October each year and gross hourly earnings include all regular earnings, including overtime payments. Irregular payments are excluded. The more overtime work the higher the gross hourly earnings. The gender pay gap indicator has been defined as unadjusted, i.e. not adjusted according to individual characteristics that may explain part of the earnings, such as education, years of employment, occupation, etc.

Dataset is based on the Icelandic Survey on Wages, Earnings and Labour Costs that covers about 70 thousand employees. The survey is a stratified sample survey of legal units with 10 or more employees and data are weighted according to the survey design. The survey covers about 90% of the Icelandic labour market even though certain economic activities are missing.

Unadjusted gender pay data for the years 2015-2017 has been revised, whereas the data is always adjusted every four year when SES results are available. Yearly, between survey years, data are based on national estimation and are provisional. More information on GPG metadata can be found on the Eurostat website here, and here for the metadata on SES.


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