Gebrewolde, Tewodros Makonnen, Rockey, James and Akbar Ullah |“Global Gender Pay Inequality”, Revised 2022.
This paper introduces a new measure of economic gender inequality (EGI) based on the ratio of women’s share of national labour income to men’s. This measure captures both the principles of equal pay for equal work and non- discrimination. Importantly, it can be calculated from existing data and is comparable across countries and time. We show that EGI has only been improving slowly and that due to population growth aggregate EGI has been increasing and is equivalent to one billion working-age women working for nothing by 2017. Moreover, this gap is expected to continue to increase in coming decades. A decomposition shows that this is largely driven by the gender gap in labour market participation. Instrumental variable estimates suggest that while increases in income and democratisation reduce EGI, living standards would have to increase substantially for the most unequal societies, such as Tunisia or Iran, to approach those of the countries that are currently most equal such as Latvia or Norway.