How Does the Gender Wage Gap Vary Over the Life Course and Across Cohorts?

Lead Research Organisation: University College London
Department Name: Social Science

Abstract

Nearly half a century after Britain's Equal Pay Act the convergence of men's and women's pay is slow and incomplete. Although the trend in the gender wage gap (GWG) is towards convergence, for any given birth cohort the GWG rises as people age from their twenties to mid-life, growing upon family formation. Thus, explanations of the GWG tend to focus on the time women spend away from paid work after childbirth and the difficulties they face in establishing their previous pay level on returning to the labour market. Pay penalties are particularly pronounced for women returning to part-time employment. Some people maintain that these patterns reflect women's preferences for work-life balance and conventional norms about the division of domestic labour, while others point to discriminatory practices in the workplace.

By analysing nationally representative cohort data for people born in Britain in 1958, 1970 and 1989/90 this study addresses three gaps in knowledge. First, evidence will be extended to wages and employment at later ages than has been studied hitherto. Second, it will be extended backwards to explore linkages from childhood years to labour market experience, making innovative use of under-utilised material including biometric indicators. Third, we will be able to distinguish between the effects of ageing and of having been born male or female at different points in history. This is something that is only possible with data tracking more than one cohort. There are three reasons to anticipate cohort effects:
(i) People born at different times are exposed to different labour market and policy conditions during their lifetimes. For instance, the 1958 cohort left school when the Equal Pay and other Equal Opportunities provisions were first being implemented whereas these had been in place for a decade when the 1970 cohort finished school.
(ii) The education gap between men and women has disappeared and even reversed, such that the pay-off due to qualifications will have shifted markedly between men and women across the generations.
(iii) Attitudes to women's participation in the labour market and to men's in domestic labour have shifted. These changes in social norms, together with attendant changes in public policy, have created opportunities for men and women to combine paid work, parenthood and leisure in ways not hitherto possible, with uncertain consequences for the life choices and earnings patterns of men and women across the life course.

The study will address five related questions:
1. What does the GWG look like over the life course and across birth cohorts? Does it change later in life and how does it compare across cohorts for people at the same points in their life?
2. How much of the GWG is accounted for by differences in human capital (qualifications and work experience) accumulated over the life course? How different does the course of the wage gap look across ages for men and women with similar human capital attributes?
3. What role do parenthood and caring responsibilities play in the emergence of differences between men and women in employment and pay and how the GWG persists over the life-course?
4. How much of the GWG is attributable to the sorts of jobs undertaken by men and women, particularly in respect of occupation and part-time hours?
5. What role do childhood attributes and experiences play in determining the subsequent GWG and do childhood influences still matter having accounted for early adulthood experiences?
The study will provide a comprehensive anatomy of the GWG across individuals' life-times, up to the age of 61 in the case of the 1958 cohort, and across three generations with births spanning 40 years, offering numerous insights into wage formation which will assist in efforts to mitigate the consequences of unequal treatment in the past and promote gender equality in the present and future.

Planned Impact

This project will inform policy on women's pay relative to men's, and the factors that determine any discrepancy. It is timely given the new requirements for large organisations to report their gender wage gaps. We will examine changes in the gap across the life-cycle and across cohorts, offering insights into a range of policy-related issues. First and foremost, it will provide a clear and robust set of estimates regarding the evolution of the gender pay gap five decades after the passage of the Equal Pay Act. Policy-makers will be able to benchmark progress that has been made towards gender equality whilst variance in that gap across sub-groups of the population (eg. by education level and social class) will help inform where policy makers should focus their efforts in future. Regression analyses will introduce potential determinants of the gender wage gap in a step-wise fashion to help account for the size of the gap. In doing so, it will quantify the importance of various factors, again helping policy-makers focus their efforts on factors that appear to account for most of the variance. Similar analyses will be undertaken for different parts of the earnings distribution, thus going beyond the usual focus on differences in mean earnings. Estimating gender gaps in different parts of the wage distribution will help in analysing any impact of existing policies which "bite" at different points, such as the national minimum wage.

All government departments should find our results useful because they are now all under a statutory duty to monitor and report on equality among their own departmental employees. Public sector bodies also have a statutory duty to eliminate discrimination and advance equality of opportunity. But the government agencies who are most likely to benefit from this knowledge about the size and sources of the gender wage gap are those with direct responsibility for the promotion and enforcement of equal treatment across the workforce, including the Government Equalities Office, the Department for International Development (its Secretary of State is currently Minister for Women and Equalities), the Equality and Human Rights Commission, the Low Pay Commission, the Department for Business, Energy and Industrial Strategy (responsible for issues such as flexible working and parental leave), Acas (who provide guidance on equal pay), and the Department for Work and Pensions (responsible for pension policy). Beyond the UK, researchers in the OECD and the European Commission will want to know what the implications of the study are for policy formation internationally.

Women's groups and those promoting women's rights, such as the Women's Equality Party and the Women's Budget Group, can refer to our evidence on potential discrimination against women at work, in terms of recruitment, pay and progression. Evidence of changes in the size of the gender wage gap over the life-course will be of interest to groups lobbying on their behalf, such as Age Concern who are interested in older workers and pensions, while Mumsnet may focus on findings about family formation.

Trade unions seek to promote equality at work and eliminate employer discriminatory behaviour. They have a special interest in gender equality with women now constituting the majority of union members. They will examine our research to further their understanding of what lies behind the gender wage gap and use the evidence to promote further government and societal action to eliminate it. As the professional body for personnel managers, the Chartered Institute for Personnel Development will look to the study to help promote and encourage gender equality at work.

The one day workshop will bring together these practitioner and policy beneficiaries with academics in the field to discuss early findings from the study and their implications for policy and practice which will be reflected in our policy report.

Publications

10 25 50
 
Description The paper "The Gender Gap in Wages over the Life Course: Evidence from a British Cohort Born in 1958" is the first to trace the gender wage gap (GWG) faced by those in employment through to age 55 using six survey sweeps from the National Child Development Study. Previous studies had only gone up to age 42. The raw GWG among this birth cohort follows an inverse U-shape. In line with previous studies we find a small but significant pay gap at age 23 in 1981 (before most of the cohort had become parents), which increased up to age 42. Extending the analysis to age 55 highlights that the gender pay gap declines somewhat for people in their fifties.

The increase in the raw GWG as family building proceeded to mid-life was mainly accounted for by a divergence in work experience - women's slower accumulation of experience in full-time employment, which was an indirect consequence of family building. For this cohort the GWG did not start (or end) with family formation. After allowing for the widening differences in experience over the life-cycle there is still a residual wage gap which starts at age 23 indicating a significant price for being female, around 16 log points (or 15% of male pay), and ends at around 11 log points at 55.

Much of this residual gap is associated with asymmetric remuneration of men and women with family responsibilities, but unequal treatment is not wholly due to parenthood. There was a wage penalty for being female before parenthood and women who never had children did not entirely escape it in later periods of their life.

The paper "A Short History of the Gender Wage Gap in Britain" extends the analysis in the first paper to consider two cohort studies, the 1958 NCDS and the 1970 BCS, to investigate the GWG over the lifetime and across cohorts. It introduces a method to correct for non-random participation in employment that was not considered in the previous paper. The results also show that the GWG increases until employees reach their forties, after which it falls. In addition it shows that the GWG has closed across birth cohorts at all points in the adult life-cycle. Furthermore failure to correct for non-random participation in employment - both within and across birth cohorts - leads to an underestimate in the rate at which men's and women's earnings have converged over recent decades.

The paper "Are women doing it for themselves? Gender segregation and the gender wage gap" focuses on the workplace and uses matched employer-employee data from the 2004 and 2011 Workplace Employment Relations Surveys (WERS). It shows that the GWG declines substantially with the increasing share of female managers in the workplace. The gap closes because women's wages rise with the share of female managers in the workplace while men's wages fall. Additional estimates suggest the share of female managers in the workplace has a causal impact in reducing gender inequalities in earnings particularly when employees are paid for performance. This is consistent with the proposition that women are more likely to be paid equitably when managers have discretion in the way they reward performance and those managers are women.
Exploitation Route The above papers have been submitted to academic journals and these papers and other work in progress have been accepted for presentation at major international conferences: ESPE 2019, EALE 2019, Understanding Inequalities 2020, Celebrating 50 years of the 1970 British Cohort Study and EALE/SOLE 2020. Thus our work will contribute to academic debate and will hopefully influence future research.

Our advisory group also has academic members as well as representatives from government (GEO), non-departmental public bodies (EHRC and ACAS) and trades unions (TUC) who are committed to taking forward the findings in the public policy community.
Sectors Aerospace, Defence and Marine,Agriculture, Food and Drink,Chemicals,Communities and Social Services/Policy,Construction,Creative Economy,Digital/Communication/Information Technologies (including Software),Education,Electronics,Energy,Environment,Financial Services, and Management Consultancy,Healthcare,Leisure Activities, including Sports, Recreation and Tourism,Government, Democracy and Justice,Manufacturing, including Industrial Biotechology,Culture, Heritage, Museums and Collections,Pharmace

URL https://www.ucl.ac.uk/ioe/departments-and-centres/centres/quantitative-social-science/gender-wage-gap-evidence-cohort-studies
 
Description This project aims to inform policy on women's pay relative to men's, and the factors that determine any discrepancy. It is expected to benefit government, public sectors, charities and NGOs, Trade Unions, and professional bodies, such as Chartered Institute for Personnel Development. In this section we summarise the work done in order to achieve this aim. Since the start of the project in September 2019, we have established an advisory board. This group is expected to provide input at an early stage on what practitioners and policy makers know about the causes of the gender wage gap, provide input which will inform the analyses we perform, provide feedback on early findings, and assist in the effective dissemination of final results to all stakeholder groups. The board consists of: • Gil Dix (Advisory, Conciliation and Arbitration Service; more information available at https://www.acas.org.uk/about-us) • Jane Waldfogel (Columbia University) • Kelli Jones and Rebecca Thomas (Equality and Human Rights Commission; more information available at https://www.equalityhumanrights.com/en/about-us) • Francine Hudson and James Heagerty (Government Equalities Office; more information available at https://www.gov.uk/government/organisations/government-equalities-office/about) • Monica Costa-Dias (Institute for Fiscal Studies) • Laura Gardiner (The Resolution Foundation; more information available at https://www.resolutionfoundation.org/about-us/mission/) • Sian Elliott and Sue Coe (Trades Union Congress; more information available at https://www.tuc.org.uk/national/about-tuc) On the 30th of January 2020 we held our first advisory board meeting, where we shared the key findings with members of advisory board. We also discussed interim findings and expectations in terms of how advisory board members can contributions to the project. In terms of media related impact, we set up a website (https://www.ucl.ac.uk/ioe/departments-and-centres/centres/quantitative-social-science/gender-wage-gap-evidence-cohort-studies), with a view to reach a wider audience. This website is being regularly updated, and any the blogs, and non-academic articles are included there. Our faculty website receives 15,000 unique users per week making this a better way of attracting visitors than a standalone site, especially as it allows promotion of news items and events from the project on faculty- or university-wide pages. Any updates are also promoted using the IOE's termly e-newsletter Research News that is sent to key policy stakeholders.
First Year Of Impact 2020
Sector Communities and Social Services/Policy,Government, Democracy and Justice
Impact Types Societal,Economic,Policy & public services

 
Description A talk at an international conference. European Society for Population Economics 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Presentation of initial results on new dataset about the gender wage gap and its antecedents in the British birth cohort of 1958. International audience included post graduate students as well as academics from north America and Europe. Made contact with colleague from Norway.
Year(s) Of Engagement Activity 2019
 
Description ESRC Data Impact Blog 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact ESRC hosted blog
Year(s) Of Engagement Activity 2019
URL http://blog.ukdataservice.ac.uk/the-gender-pay-gap-from-the-perspective-of-people-born-in-1958/
 
Description Presentation of research at practitioner conference 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact Presentation of research findings to Chartered Institute of Personnel Development
Year(s) Of Engagement Activity 2019
URL https://discovery.ucl.ac.uk/id/eprint/10089689/2/Bryson_CIPD%20ARC%202020%20-%20John%20Forth.pdf
 
Description blog on IoE website 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Blog reporting our study showing women managers close the gender pay gap.
Year(s) Of Engagement Activity 2019
URL https://ioelondonblog.wordpress.com/2019/10/24/how-women-managers-close-the-gender-wage-gap/
 
Description conference presentation at 2019 European Association for Labour Economists 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact conference presentation
Year(s) Of Engagement Activity 2019
URL https://discovery.ucl.ac.uk/id/eprint/10082941/1/Bryson_uppsala_v3.pdf
 
Description website for project 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact project website providing full information on the project
Year(s) Of Engagement Activity 2019
URL https://www.ucl.ac.uk/ioe/departments-and-centres/centres/quantitative-social-science/gender-wage-ga...