What’s happened to the gender pay gap?

Last week’s post on the strange disappearance of Italy’s gender pay gap reminded me to do an update on what’s happening with ours. The ONS published its latest figures a couple of months ago so I have added them to the graph I did at the end of 2011.

For some background, the gap between full-time pay for men and women has fallen significantly since equal pay legislation became law in 1975. For those in their twenties, the gap had gone by 2006. If anything, women were earning, on average, slightly more than men.

genderpay13

Since then, the pay gap for those in their thirties has followed a similar trend to the point where it, too, has almost disappeared.

Gender pay difference for median hourly earnings, excluding overtime       Percentage full-time pay difference (men/women) by age band

Gender pay graph 2012

The big jump in pay differences comes in the older age groups, which accounts for the overall full-time gender pay gap being just below 10 percent.

This time, I have included the 18-21 year olds. (I excluded 16-17 year olds because the sample size is very small.) Here, the pay gap is higher and seems to be rising.

Could this be because a majority of women now go on to higher education? 51 percent of women go to university compared to 40 percent of men. Perhaps many of those women more capable of commanding higher pay rates are opting out of the 18-21 workforce and going to university instead.

This might also explain some of the reduction (or disappearance) of gender pay gaps in the twenties and thirties. Women were the main beneficiaries of the growth in higher education since the mid-1990s. By the early 2000s, they had taken up most of the new university places and the gap between male and female participation in higher education has continued to widen ever since. Could this now be feeding through into the gender pay differences? Do women in their twenties earn more on average than men because there are just a lot more of them with good qualifications? Are those with higher qualifications more likely to stay in the full-time workforce?  Is this sheer weight of numbers also countering the effects of childbirth and career interruption on the pay averages of women in their thirties?

Or could some of this be due to shifts in social attitudes? It is nearly 40 years since discrimination and unequal pay were outlawed. Have those under 40 just grown up with an expectation of equality? I suspect both factors are at work and they probably reinforce each other. The more highly qualified women there are in senior roles, the more normal it becomes.

Having said all that, there is still some evidence that, all other things being equal, women graduates get paid less than men, which makes the (negative) gender pay gap for those in their twenties all the more remarkable. Despite lower starting salaries, women still earn more than men during their twenties. Again, could this simply be due to a greater number of high-earning women shifting the average?

This is another of my ‘damned if I know’ posts (perhaps I should start a separate category for them). The data raise some interesting questions though.

Once again, I’d be fascinated to hear what other people think. Answers, hypotheses, links to articles and other musings in the usual place please.

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10 Responses to What’s happened to the gender pay gap?

  1. Pingback: What’s happened to the gender pay gap? - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. john b says:

    Women in their 20s don’t have lower starting salaries than men – female graduates in their 20s have lower starting salaries than male graduates.

    I did a bit of very basic modelling based on grad rates of c25% for boys and 33% for girls (in line with the final Graun piece), and assuming that the 5% gender discrimination against girls aged 18-21 is the baseline.

    For women aged 20-29 to achieve the indicated 2.5% differential based solely on their higher proportion of graduates, the graduate premium over non-graduates needs to be in the region of 100%. Which seems, erm, high. Not sure what to make of that TBH.

    One thought based on your Italian piece: women who drop out of the labour force in their 20s in order to have kids and so aren’t counted in the pay gap data are likely to be from the lowest-skilled lowest-income lowest-paid groups.

  3. john b says:

    Hang on. Just noticed the March 2010 BBC piece has uni participation rates around 2/3 higher than the Dec 2012 Guardian piece. Using its data in my model, you only need a 70% graduate premium to offset 5% of discrimination.

    I can’t work out, however, why those two pieces have such different rates. Uni participation surely can’t have fallen by a third in the last two years? Surely…?

  4. john b says:

    At the risk of being a one-man comments thread, aha, the BBC piece is 18-30s and the Graun piece is 18yos only, so doesn’t include people who travel/work and head to uni later on.

    • Rick says:

      Thanks for all this John. I tried to find some figures on higher education participation rates by age and gender but couldn’t see any in an easily accessible form.

      On your general point, though, I agree. Women outperforming men at university can only be part of the story. Social attitudes and, as you say, lower paid women leaving the workforce altogether may also play their part.

      On that last point, the recession might have made it more difficult for them to get back, thus exaggerating the trend.

  5. GrumpyLecturer says:

    Hi Rick. Possibly, this is without any empirical evidence, the answer may lay in the fact that as manufacturing and other traditional male dominated work where once Trade Unions negotiated detailed hierarchical pay structures disappear and service sector industries, a more gender inclusive form of employment based predominately on minimum wages, may account for the gradual disappearance of the gender pay gap.
    However, if this may prove the case then it is a race to the bottom as far as wages are concerned and this then leads on to the question of low wage increases over the past few years as more and more people rely on the State for increases in the minimum wage rates.

    • Rick says:

      Trust you to come up with a grumpy take on the subject!

      Seriously, though, I think there may be something in what you say. Take away the unions, add a severe recession, and we can all enjoy equally low pay!

  6. GrumpyLecturer says:

    Hi Rick substitute Critical Thinking rather than ‘grumpy’…lol. We have lost the art of Critical Thinking in a unified HR world….sadly

  7. Jim says:

    When the historical pay gap disappears, as the older age groups fall out of the employment figures, and the younger generations replace them, what chance we’ll stop hearing that women are discriminated against in employment? Not much I’ll wager. In fact I predict that in a decade or so time women will either be on a par or out earning men across the board, but we will still be hearing the same old routines from the usual suspects about how hard done by they are, and need special treatment. We already see it in Uni admissions – women outnumber men by a significant margin (55% to 45%), but no-one is suggesting measures to even things up there are they? There is a massive ‘equality’ industry out there for which the ‘fact’ that women are discriminated against is a given, whatever the reality is. They are not all going to put their hands up and say ‘Our work is done, make us redundant please’ now are they?

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