OECD report reveals significant gender pay between college educated men and women

Women, between ages 25-64, with a degree earn 28% less than men despite having a higher tertiary attainment and completion rate. This is one of the key insights about education in Ireland in a new report by the international economic think tank Organisation for Economic Co-operation and Development (OECD).

According to OECD’s report entitled “Education at a Glance 2019”, Ireland has one of the largest shares of tertiary-educated adults. The report reveals almost half (47%) of adults (25-64 year olds) have a degree. 51% of women have obtained a degree compared to 43% of men. In the age bracket of 25-34 years old, 60% of women hold a third level qualification compared to 52% of men.

There are also clear benefits to a third level qualification and is seen as more valuable by employers. One is more likely to be employed with a degree; 85% of graduates are employed while only 4% of graduates are unemployed. Those who only completed the Leaving Certificate have an unemployment rate of 71%. These percentages are far higher as 56% of 25-34 year olds in Ireland have gone on to third level education.

Long term unemployment rates for those graduates (31%) are slightly higher than the OECD average of 29%. Those without third level qualifications are more likely to stay unemployed for longer with the unemployment rate being 46% in Ireland compared to the OECD average of 36%. The employment rate for those with a degree is 11 percentage points higher than someone who has only completed the Leaving Certificate or attended further education and 33 percentage points higher for those who obtained a level below the Leaving Certificate.

Holders of a bachelor's degree or higher enjoy great financial benefits compared to those without one. They earn 81% more on average than those who only completed the Leaving Certificate compared to the OECD average of 44%. Those who have completed a Master’s degree can earn twice as much as someone whose formal education stopped at the Leaving Certificate. Despite tertiary educated adults having an advantage over earnings, it still varies by age; if they have completed university, those between 25-34 years of age earn 42% on average compared to 71% more among 35-44 years of age and 116% more if they’re among 45-54 years of age. These gaps between age are more marked among those without a third level degree.

But having higher educational attainment such as a masters or a doctorate doesn’t mean better chances of employment. Regardless of tertiary attainment, employment prospects are similar across a bachelors, masters and a doctorate. The employment rate for doctorate holders are only 3% higher than those with a masters.

The report has also revealed that men who have a third level degree have higher absolute net financial returns than women. Men can earn $476,000 compared to $387,000 for women. The net financial returns for Irish men in the public sector are roughly $369,000 compared to $143,000 for women. The report describes this as the “largest gap across OECD countries with available data”. However, because men earn more, they pay more taxes.

Despite earning less than men, women have more pronounced benefits if they obtain third level qualification. Their average financial benefits are 22 times the cost compared to only 15 times the cost for men. Irish women have the highest benefit-cost ratio across OECD countries while men have the third highest ratio in the OECD.

The report shows that Ireland has one of the highest rates of enrollment to third level across the OECD. 96% of tertiary students are enrolled in public institutions. Bachelor’s students are generally between 19 and 21 years of age. 53% of students enrolled in third level education are between 19 and 20 years old in contrast to 39% of students enrolled that are 21 and 22 years old. Ireland also has the second highest completion rate in the OECD. 63% of new students complete a bachelor’s degree within its theoretical timeframe. For women, this is slightly higher with 67% completing a degree.

Despite high attainment rates for third-level education, Ireland has one of the lowest investments on post-primary education. In 2016, total expenditure for tertiary education only added up to 0.8% of its GDP. In contrast to the OECD average of 1.5% and EU23 average of 1.2%. Ireland only spends $13,237 per student in third level, compared to the OECD average of $15,556 per student and to the EU23 average of $15,863.