Trends in the Relative Pay of Women and Men Across Three British Birth Cohorts

1. Trends in the Relative Pay of Women and Men Across Three British Birth Cohorts Jenny Neuburger GeNet meeting, 26 September 2008

2. Research questions • How has women’s average pay changed relative to men’s since 1970? • How does women’s average pay change with age, relative to men’s? • What difference does it make adjusting for changes in women's employment participation?

3. Increases in women’s paid employment Censuses (1951, 1961, 1966) Labour Force Survey, 1971-2007

4. Improvement in (employed) women’s relative pay New Earnings Survey 1970-1997, ASHE 1998-2007

5. British Birth Cohort Studies National Survey of Health and Development (NSHD) - All babies born in England, Scotland and Wales in one week of March 1946. - Follow-up survey 5,362 in 1948. Stratified sample. - Surveyed 22 times, most recently in 2006 (age 60). National Child Development Study (NCDS) - All (17,634) babies born across Britain in a week of March 1958. - Seven follow-up studies. Added Non British-born children at ages seven and eleven. - 11,419 interviewed in 2000 (age 42). British Cohort Study (BCS) - All (17,287) babies born across Britain in a week of April 1970. - Seven follow-up studies. Non British-born added at ages five, ten and sixteen. - Non-response problems. 9,665 interviewed in 2004 (age 34).

6. % of women in paid employment, by age & cohort

7. Ratio of women’s to men’s mean hourly pay, by cohort & age

8. Mean wage offer Mean wage Truncated distribution of wage offers Not in paid work In paid work Wage offer

9. Imputation characteristics Childhood • Father’s occupation at two ages • Mother’s age when cohort member born • Parents’ education • Scores in maths and reading tests at age 10 or 11 • Number of siblings • Number of older siblings Adulthood • Highest qualifications • Occupational status of first job • Years in full-time and part-time employment • Any children, children under five, more than one child • Lives in London or the South East

10. Results I: Who is in employment? Women with higher education and ability more likely to be in paid work (and to work full-time) Differences reduce with age. Non-employees more heterogeneous group at older ages.

11. Results II: What do imputed wage distributions look like? Imputed mean wage is lower than mean wage for women in six out of the seven surveys (between two and eight per cent lower) Full-time mean is much lower for women (up to 15 per cent) when part-timers and non-employees assigned full-time wage Mean is lower for men at two ages; 33 (1991) and 42 (2000) for NCDS

12. Imputed and actual log wage distributions, NSHD NSHD women age 26 NSHD women age 31

13. Results III: Trends in actual and potential pay ratios

14. Conclusions Women’s average actual and potential pay has increased relative to men’s across cohorts, but decreases with age We underestimate cross-cohort improvements in young women’s potential pay if we ignore selection into employment Gender pay gaps for full-time workers understate gender inequality in full-time pay opportunities

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16. Sample sizes

17. % of women with children, by qual, age and cohort

18. % of women with children, by qual, age and cohort

19. % mums employed when child < 5 yrs, by qual & cohort

20. Nearest-neighbour matching based on propensity score Not in paid work Propensity score In paid work Prob(work) = 1 Prob(work) = 0

21. Imputed potential and actual mean wages