Dr. Helen Russell:

I thank the committee for the opportunity to speak today. In my opening statement, I will focus on recommendations 32 to 36, inclusive. These are the recommendations around pay and work conditions.

I will start with the gender pay gap. The citizens' assembly set out ambitious recommendations to reduce and eventually eliminate the gender pay gap. The latest figures show there has already been a decline in the hourly pay gap since the one that is in the recommendation to 11.3%. This figure hides a good deal of variation across occupations. It is much higher, for instance, in the private sector than in the public sector. It also differs across the wage distribution. Recent ESRI research has found that the unexplained wage gap is much higher at the top end of the wage distribution, that is, the top 20% of earners. The gap is much wider there. In contrast, the gap at the bottom of the wage distribution is much narrower. This points to the importance of addressing barriers in occupational and wage progression for women. In our submission we focus on our recent research findings on the factors behind the pay gap and other labour market inequalities. We focus on the policy levers that the assembly proposed to address these.

In recommendation 36, the citizens recommended introducing a statutory right to flexible working. There is a broad body of evidence that employment flexibility facilitates those with caring responsibilities to remain employed and combine work and care. However, some types of flexible working, particularly part-time work, is associated with a pay penalty. Therefore, increased flexibility needs to occur also in higher paying jobs and jobs with good prospects in order to reduce the pay gap. Enhanced flexibility also needs to be accompanied by greater take-up among men. We do not want it to be the case that all of these flexible options are only taken up by women, because that will just exacerbate inequalities. It is important that there is a greater take up of men and a more equal sharing of caring roles within families between men and women.

The introduction of paid parents leave is an important step in that direction because this is the first paid leave that is available, apart from the two-week paternity leave. This is additional leave of two months for fathers. Looking across Europe, we know that take-up of that leave by fathers is dependent on the rate of replacement pay. The flat-rate payment that we have here is likely to limit take-up by fathers and we see that in figures so far.

The provision of affordable, quality childcare is also key to reducing labour market inequalities. I know that was one of the other recommendations of the assembly. The committee will probably be addressing that in another session, so I will not dwell on it here. There has been much policy development. We were starting from a very low base, so we are still in a situation where our costs to families are among the highest in the OECD. The ESRI has undertaken a lot of research in the area. I am looking at those policy developments that were included by my colleague, Dr. Tuda. We are very happy to discuss those in the questions and answers as well.

I will move on to pay transparency, which was recommendation 33 of the assembly. The citizens recommended the prompt implementation of the gender pay gap information Act.

Lack of transparency creates an opportunity for discrimination and bias to occur. Greater transparency in pay scales and the absence of discretionary payments such as bonuses is one of the reasons for the much lower pay gap in the public sector. The UK has introduced a policy similar to the policy here. Recent research has found that was associated with a reduction in the wage gap of 1.6 percentage points which is quite a big impact. That was mainly seen as a reduction in male wages.

Turning to recommendation 34 which relates to minimum wages, the citizens' assembly recommended aligning the minimum wage with the living wage over a period of three years. Based on the 2021-2022 figures that would be an increase of about 23% in the minimum wage. Research by colleagues in the ESRI and others elsewhere have shown that the introduction of the minimum wage in Ireland was quite significant in terms of the pay gap. It lead to a big reduction in the gap among low-paid employees. Some recent research by colleagues in Maynooth University looking specifically at the living wage and introducing that found that women were over-represented in the group affected by that change because they are more concentrated in low-pay work. They found only a small effect on the gender pay gap. This goes back to my earlier point that the gap is widest further up the earnings scale. It has an effect or is likely to have an effect but that is likely to be small.

Minimum wage policy also needs to be cognisant of the adverse employment effects. Evidence for Ireland indicates that the recent minimum wage increases did not lead to job losses. This is based on work by my colleague here. However there was evidence of a reduction in hours worked among some minimum-wage workers. In implementing that policy there needs to be careful consideration of employment effects. That is recognised in the recommendation itself.