Adjusted wage difference in relation to wage discrimination

Pay discrimination means that employers reward their employees unequally for work of equal value. The unexplained gender pay gap gives a tentative indication of the existence of pay discrimination, but does not constitute evidence for it. To what extent gender-based pay discrimination actually exists cannot be concluded on the basis of this study. This is due to the following limitations of the research method used:

• The wage gap has not been adjusted for all factors related to the value of labour. Due to lack of data on this within CBS, for example, no adjustment was made for any differences between men and women in work motivation, ambition, the importance employees attach to a high salary, and taking additional courses.
• The analysis did not take into account all possible forms of remuneration. Special (occasional) rewards such as bonuses and fringe benefits such as leave opportunities and flexible working hours were not included in this study.
• For some factors, a rough categorisation was used during operationalisation, possibly losing relevant nuances. For example, workers were classified into only four occupational levels, when in reality there is a much wider range of occupational levels.
• In addition, factors that are adjusted for may actually remove the effect of possible discrimination. For example, suppose that in well-paid industries, women are less likely to be hired than men as a result of discrimination, despite equal qualifications. The wage gap would then be partly explained by the variable 'industry'. Similarly, it is possible that the variables 'managerial position' and ‘occupational field of management' explain part of the gender pay gap, while women are discriminated against by being denied managerial and executive positions more often.
It cannot be said in advance whether any pay discrimination is larger or smaller than the adjusted (or unexplained) pay gap. This is because the above causes may apply in both directions.