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Pay Inequality: Gender

Pay Inequality: Gender. Susan Harkness University of Bristol. The Gender Pay Gap and Policy. In the 1970s the Equal Pay and Sex Discrimination Acts helped to reduce the gender pay gap.

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Pay Inequality: Gender

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  1. Pay Inequality: Gender Susan Harkness University of Bristol

  2. The Gender Pay Gap and Policy • In the 1970s the Equal Pay and Sex Discrimination Acts helped to reduce the gender pay gap. • Since then there has been no direct action on the pay gap, although since 1997 there have been a range of indirect measures that may have influenced it, including: • Maternity / paternity leave and family leave. • Minimum wage. • Part Time Work: right of PT workers not to be treated less favourably.

  3. What Has Happened to the Gender Earnings Ratio? • Notes: 1. Source: General Household Survey data. • 2. PT work is defined as <30 hours per week.

  4. Explaining the FT Pay Gap • Differences in “observed characteristics”, such as age, education, work experience, occupation etc. explain very little of the pay gap between full-time women and part time workers. • The majority of the FT pay gap is “unexplained”. • Economists interpret this difference as arising from differences in unobserved characteristics (ex. effort). This is often interpreted as “discrimination”. • The decline in the FT pay gap over recent decades is mostly a result of a decline in the “unexplained” part of the pay gap.

  5. Explaining the Part-time Pay Gap • Differences in “observed characteristics” explain almost all the gap in pay between PT and FT working women. • PT women tend to have low levels of education, be in a couple, have young and numerous dependent children, and work in low level occupations. • On average women moving from FT to PT work make a downward occupational shift. • Policy initiatives (NMW 1999, PT Workers Regulations 2000, and Right to Request Flexible Working 2003) have had little impact on PT pay penalty. • The most effective way to reduce the penalty would be to strengthen the ability of women to move between FT and PT work without losing their current job. (Manning and Petrongolo 2003).

  6. Wage DistributionGender Earnings Ratio by Percentile

  7. Gender Earnings Ratio by Percentile Full-time Part-time

  8. Changes in the Pay Gap by Education

  9. Changes in the Pay Gap by Education Full-time Part-time

  10. Earnings by Age Group and Time

  11. Earnings by Age Group and Time Full-time Part-time

  12. Earnings Ratio by Birth Cohort

  13. Earnings Ratio by Birth Cohort Full-time Part-time

  14. Relative Earnings of Mothers & Non-mothers to Male Earnings (Age 25-49)

  15. Relative Earnings of Mothers & Non-mothers / Male Earnings (Age 25-49) Full-time Part-time

  16. Motherhood • Mothers earn substantially less than those without children. • The “penalty” to having children is estimated as: All FT. • 1 child 7% none. • 2 children 23% 17%. • 3 or more children 31% 28%. [Harkness and Waldfogel 2001].

  17. Conclusion • The pay gap has been steadily closing since 1997. • There remains a large pay gap between women working full- and part-time, much of which can be explained by occupational segregation. • For women working full-time there have been large gains in relative earnings for those in the bottom half of the wage distribution. • The gender pay gap rises with age, but the rate at which it increases has slowed. Over the last decade the largest improvements in relative earnings have been among women in their 30s and 40s. • Their has been a sustained improvement in the relative earnings of FT working women among recent birth cohorts. • The earnings of mothers have improved substantially over the last decade.

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