Gender Wage Gap in Saudi Labor Force Estimated at 49%
Pilot launch of the Takafu Equal Opportunity Index measuring the gap between men and women in participation, career development and compensation in the private sector based on ILO Decent Work Indicators
Takafu is an initiative carried out by the Alnahda Center for Research. Meaning ‘parity,’ the Takafu initiative aims to establish an index to measure equal opportunity in Saudi Arabia. In line with Saudi Arabia’s Vision 2030, which stipulates measurement of growth and prosperity to support the future of the Kingdom and promotes equal access to economic opportunity for men and women, the Takafu initiative aims to support the vision and identify areas where policy makers can intervene and improve work conditions for men and women. The main source of administrative data used to produce the Index is the General Organization for Social Insurance (GOSI), a public organization that is responsible for social insurance coverage for private sector employees. GOSI collects data on the labor force through regular reporting by private employers.
The Takafu Index includes three main domains: participation, career development and compensation. These domains are designed to align with the International Labor Organization (ILO) Decent Work Indicators, presented at the 18th International Conference of Labor Statisticians, December 2008.
The Takafu Index estimates the national gender gaps for 2018 at 53% and 65% for the total Saudi and non-Saudi private sector workforce, respectively. These findings are composites of the gaps calculated across the three Takafu domains: participation, career development and compensation.
The gender gap in participation between men and women for the total Saudi workforce is 52%, and it is 97% for the non-Saudi workforce. Regarding career development, the gap is estimated at 58% for the Saudi workforce and 97% for the non-Saudi workforce. As for compensation, the wage gap for the Saudi workforce is 49%, while non-Saudi females earn twice what their male counterparts make, hence the wage gap is reported as 0% to remain consistent with the methodology of the Index. All ratios are truncated at equality or 1 (i.e., an equal number of men and women). This means that there is no reward or penalty for women surpassing men in a specific indicator.
The highest-performing industries, in terms of equal opportunity for Saudi men and women, are education, health and hospitality, while the lowest-performing industries are utility industries, and post& telecommunications. For the non-Saudi workforce, the highest-performing industries are social services, health and education, and the lowest-performing are in utilities and post & communication.
Regarding firm size, data indicate that equal opportunity for the Saudi workforce is highest in small and micro-sized establishments and lowest in mega establishments. For the non-Saudi workforce, equal opportunity is highest in large establishments and lowest in mega establishments.
While the report published this year is the culmination of the pilot year of the initiative, Alnahda Center for Research will aim to carry out a comprehensive study in the coming years.