Gender pay differentials in Portugal: contributions to the employment policy debate in the European Union

Since the implementation of the European Employment Strategy in the 1990s, the issue of gender gaps in the European Union labour markets has been granted a high profile. The Portuguese labour market has performed well on various indicators relating to gender equality, namely, participation and employment rates. Nevertheless, a persistent pay gap remains despite the recent evolution of the labour market, especially concerning the average education level of workers. This article investigates the main factors explaining the gender pay gap across two decades and the way those factors perform along time. We also discuss the means of closing the gap in the context of the European Employment Strategy, considering the lessons from other member states. We used wage decomposition techniques to analyse the relative importance of differences in the productive characteristics of workers, differences in the way men and women are distributed among jobs and the relative importance of discrimination practices. Our findings suggest that most of the pay gap is due to discrimination practices. Individual action by economic agents is insufficient to solve the persistent pay gap. Social partners must incorporate this issue within collective bargaining in order to construct an adequate strategy for reducing the gap, which can only be done by engaging men and women, employees and employers. Reprinted by permission of Blackwell Publishers