Equal pay and equal treatment at work (Article 157 of the Treaty of the Functioning of the European Union (TFEU) and Recast Directive 2006/54)

AuthorAnu Laas
4 Equal pay and equal treatment at work (Article 157 of the Treaty of the
Functioning of the European Union (TFEU) and Recast D irective 2006/54)
4.1 General (legal) context
4.1.1 Surveys on the gender pay gap and the difficulties of realising equal pay
Estonia has the highest gender pay gap recorded in the EU. Several studies by sociologists,
economists and statisticians have been carried out, but legal analysis and legal changes
have not taken place. According to Paats and Lunev (2014) and Marling (2017) confirm
that the explained part of gender wage gap is relatively small and the unexplained part is
high.78 The variables that increase the unexplained part of the gap and therefore favour
men are state sector, occupation, and enterprise ownership and management
responsibilities. The variables that decrease the unexplained part of the gap and therefore
favour women are enterprises economic activity and location, also size, field of speciality,
education and marriage status. Lower pay for women among managers and teachers
compared with their male counterparts shows that the gender wage gap is not just due to
the gender segregated labour market.
The Gender Equality and Equal Treatment Commissioner, in cooperation with universities,
carries out the research project Income, Wealth and Gender ( InWeGe), which explores
gender differences in income and wealth over a person's life cycle. The first articles have
already been published. Masso et al. (2020) found that firm-specific pay differentials are
an important source of wage ine quality and can be decomposed into a combination of
sorting (women are less likely to work at high-paying firms) and bargaining (women
negotiate worse wage bargains with their employers than men) effects.79
According to preliminary data of Statistics Estonia, in October 2018, there was a gender
pay gap in all economic activities. The pay gap was biggest in financial and insurance
activities (32.2 %) and smallest in transportation and storage (1.9 %). In October 2018,
the gross hourly earnings of female employees were 18.7 % lower than the gross hourly
earnings of male employees. Statistics Estonia carries out the Structure of Earnings
Survey every four years in October. The data from the survey reflect the number of
employees, structure and earnings by occupation, economic activity, age, sex, type of
contract, full-time and part-time work and education.80
During the years 2018-2021, the wage survey is targeted at uncovering the reasons for
the gender wage gap. Measures to tackle the gender wage gap are detailed in the Welfare
Development Plan 2016-2023 and highlighted in the National Action Plan for 2015-2020.81
4.1.2 Surveys on the difficulties of realising equal treatment at work
The Welfare Development Plan 2016-202382 is coordinated by the Ministry of Social Affairs.
The plan is seen as a gender equality strategy document and provides research findings
for national action plans.83 The strategy points out shortcomings in policies and the legal
framework, including a need to achieve a substantial reduction in the gender pay gap and
78 Paats, M., Lunev, M. (2014), Palgaerinevuste statistika parem kättesaadavus: kasutatavad andmeallikad,
Statistikaamet; Marling, R. (2017), Gender Equality in Estonia, in: Örtenblad, A., Marling, R. and Vasiljević,
S. (Eds.). Gender Equality in a Global Perspective. New York: Routledge, pp. 246−260.
79 Masso, J., Merikull, J., Vahter, P. (2020), The role of firms in the gender wage gap,
80 https://www.stat.ee/news-release-2019-122.
81 https://www.riigikantselei.ee/sites/default/files/content-
82 Sotsiaalministeerium (2016) Welfare Development Plan 2016-2023 (adopted on 30 June 2016),
83 Estonia Beijing +25,

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