The wage gap between men and women has narrowed between 2019 and 2023 which applied equally to income from work, the unadjusted pay gap and the adjusted pay gap. The gender division of the labour market largely explains the existing wage gap.
In 2023, the adjusted pay gender gap between men and women was 3.6%, compared with 4.4% in 2019. If the unadjusted gender pay gap is considered, the difference was 9.3% in 2023 when looking at hourly regular total wages, down from 13.9% in 2019. When looking at hourly regular wages, the unadjusted gender pay gap between men and women was 7.4% in 2023, compared with 12.5% in 2019. Finally, the difference in income from work measured 21.9% in 2023 which was down from 25.5% in 2019.
Statistics Iceland now publishes a report on the gender pay gap which is based on a study of the gap in wages between men and women. The study is carried out in collaboration with the ministry responsible for matters of equality (initially the Prime minister’s office, but since 1 September 2024 the Ministry for the Social Affairs and the Labour Market) based on a cooperation agreement. The report summarises the development of the gender pay gap based on different measurements used to calculate the gap in wages between men and women, as well as shedding light on what lies behind the gender pay gap.
About the data
The difference in income from work between men and women is a simple measure of the gap in wages between men and women, which involves a comparison of income from work. It is based on the income from work of individuals of working age according to tax returns (18-66 years old). The measurement does not take into account factors that may explain differences in income such as the number of hours worked, occupation, industry and level of education. This indicator shows the difference in men's and women's wages as a percentage of men's wages.
The unadjusted gender pay gap is a comparison of the average hourly wages of men and women based on Statistics Iceland's data on wages. The unadjusted gender pay gap therefore takes into account the number of hours worked. Factors that can explain differences in wages, such as occupation, industry and level of education, are, however, not taken into account. The unadjusted gender pay gap shows the difference in men's and women's hourly wages as a percentage of men's wages. The unadjusted gender pay gap is calculated for hourly regular wages as well as hourly regular total wages. Regular wages include basic wages as well as any regular extra payments settled on a monthly basis. Regular total wages consist of regular wages plus overtime.
The adjusted gender pay gap assesses whether men and women with the same characteristics receive comparable wages. Models, taking into account the relevant factors (explanatory variables) such as occupation, industry and level of education, are used to isolate the relationship between gender and regular wages. The analysis is based on Statistics Iceland’s wage data, demographic data and education data. The adjusted gender pay gap is calculated using hourly regular wages.
Gender pay gap — Working paper