In a whirlwind of publicity and self-promotion, Glassdoor recently released the results of a “study” that claimed to prove the existence of a gender pay gap even when potential differences in areas such as “personal characteristics, job title, company, industry and other factors” are accounted for. As a result, Glassdoor boldly claims that men are paid about 5% more than women.
However, the approach used by Glassdoor is subject to a major problem. In particular, Glassdoor’s approach relies on them being able fully to control for all other factors (such as experience, qualifications etc) that might determine someone’s wage. Although Glassdoor notes this themselves (in a single paragraph relegated to the back of their report), they do not qualify any of their headline results with an acknowledgement of this.
Seeing as Glassdoor only includes controls for a few personal characteristics (such as age, qualifications, and experience) and some factors relating to a person’s occupation and industry (such as job title and company name). In other words, Glassdoor excludes a number of relevant factors that are likely to be relevant when it comes to explaining someone’s wage.
Indeed, other studies have found that factors such as ethnicity, whether or not someone is a member of a trade union, a person’s mental and physical health, and even language skills can be important determinants of a person’s wage. The Glassdoor study does not account for any of these, and thereby erroneously attributes differences in wages that could be due to these (or other factors) to the gender pay gap.
In addition, the Glassdoor study does not seem to account for whether or not someone is working part-time or full-time – as part-time workers are likely to be paid less than full-time workers, even on an hourly basis, Glassdoor’s apparent failure to include such a distinction in their analysis could bias their results substantially. Similarly, the Glassdoor study does not even try to account for potential unobservable differences (such as personal preferences regarding careers), and this failure further biases Glassdoor’s estimate of the gender pay gap.
Finally, the data used by Glassdoor are from self-reported salaries and characteristics that are recorded by members of the Glassdoor website. There are plenty of reasons to suspect that these data are unreliable – at the very least, it is widely recognised that figures that are self-reported are likely to be subject to considerable bias, such that relying on them for a study such as this is nonsensical.
Therefore, it is clear that Glassdoor’s “study” into the gender wage gap is merely an exercise in self-promotion rather than a useful contribution to the substantial amount of past research that has been conducted on this issue.