Findings from the Rethinking Gender Pay Inequity in a More Transparent World study conducted by the ADP Research Institute confirm that women’s base salary is 17 percent less than men’s base salary, on average. However, the study also offers a new finding that when factoring in the gender pay gap for incentive pay, the gap in total earnings increased to 19 percent.
The study was conducted over a period of six years, from 2010-2016, by tracking base pay, incentive pay, and average total income of an anonymous sample of 11,000 men and women. Ahu Yildirmaz, co-head of the ADP Research Institute, explained how the study found that after six years of working at their respected firms, “the overall pay gap between men and women worsens due to disparity in bonuses.”
Young working women fare worse than middle aged working women, the study also shows. When women from 20-30 start working, their base pay is similar to men’s, but after six years, their bonus-to-base ratio is 21 percent less than their male counterparts. Women in their 40-50s also show almost identical starting salaries to males, but incentive pay, especially among lower income groups, shows the average female bonus is 8.5 percent while the male average bonus is 11.4 percent.
The study also notes that women in Finance and Real Estate industries are earning 21 percent less than men in their bonus-to-base ratio, with those industries showing the largest pay gap between men and women. Alternatively, women in the Information sector earn 7 percent more than men in bonus-to-base, balancing the overall gap in total earning.
Overall, the average bonus amount for women showed to be less than two-thirds of the amount paid to men who had equivalent base pay, age, and tenure. Yildirmaz also noted that “while it has been believed part of the wage disparity is due to women assuming the role of family caregiver that prompts them to leave the workforce, the findings show there is minimal evidence women are more likely to quit their job compared to men.”
