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Empirical study on the tolerance threshold used in equal pay monitoring in Switzerland

How does the choice of Logib's tolerance threshold influence the proportion of entities complying with equal pay?

The project

In the canton of Vaud, the Public Procurement and Grants Monitoring Committees (CoMPS for its acronym in French) carries out equal pay audits using the Swiss Confederation's standard analysis model (Logib).

Since Logib was introduced, a tolerance threshold of 5% was applied when carrying out the equal pay related analyses. The tolerance threshold has become widespread over time despite the lack of a scientific and/or conceptual basis for its application, and it plays a direct role in determining whether an entity is considered compliant or not.

In this context, the Office for Equality between Women and Men (BEFH for its acronym in French) of the State of Vaud mandated CORESO to carry out a conceptual and empirical analysis on the tolerance threshold levels and the consequences that a possible modification could undertake over the compliance rate of the audited entities.

Our contribution

Thanks to the solid experience of our research team in the field of gender equality in Switzerland, as well as its track record in econometrics and statistical analysis, an empirical study was carried out to enable the CoMPS to assess the potential impact of a change in the tolerance threshold between 0% and 5% on the outcome of equality audits.

The study examines how the proportion of employing entities considered as compliant under Logib varies with the level of the tolerance threshold. The empirical analysis is based on data from 2,845 employing entities in the 2018 Swiss Structure of Earnings Survey (SES). These analyses also provided a better understanding of which characteristics are related to a higher compliance rate and how different groups (sector, economic branch, entity size and proportion of women in the entity) would be impacted by a change in the tolerance threshold.

The result

The results of the empirical study provide a broad view of the implications of a possible change in the tolerance threshold over the percentage of compliance of employing entities on equal pay. This study will enable CoMPS officials to base their decision on an accurate estimation of the consequences of such a change and thus reduce the risk of unintended effects. The conceptual thinking proposed in the study will also serve as an element of discussion for experts who carry out equal pay checks, thus contributing to continuous improvement.

This study was completed and delivered to the competent authorities during the third quarter of 2021.

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