Statistics Iceland’s analysis on the gender pay gap, in cooperation with an action group on equal pay appointed by the government and the social partners, shows a narrowing gender pay gap during the period 2008-2016.
The adjusted gender pay gap measured 6.6% in 2008 but was down to 4.5% in 2016 using an ordinary least squares method for each year. By using the whole dataset a less biased estimate can be decomposed into explained and unexplained parts. The unexplained part of the pay difference was estimated to be 4.8% for the years 2008-2016 while the explained part was 7.4%. The explained part reflects what is explained by the model in the analysis while the unexplained is what the model cannot explain.
If the whole period is broken into three-year periods the unexplained part of the gender pay gap has decreased from 4.8% in the years 2008-2010 to 3.6% in the years 2014-2016.