Gender pay gap exposes unequal UK as women earn 40% less than men

·5-min read
Gender pay disparity exposes unequal Britain as women earn 40% less than men
Women in the UK earn an average of £13.20 per hour compared to £16.30 for men. Photo: Vuk Valcic/SOPA Images/Sipa USA

Working-age women in the UK earned 40% less on average than their male peers in 2019, new research on gender inequalities has found.

Among those aged between 20 and 55, who are not in education, long-term sick or retired, women in paid work earn 19% less per hour on average, according to the Institute of Fiscal Studies (IFS) Deaton Review of Inequalities, funded by the Nuffield Foundation.

Women in the UK earn an average of £13.20 per hour compared to £16.30 for men.

Comparing the amount earned per hour between women and men in paid work is the typical measure of the "gender pay gap".

The gender pay gap has fallen by "only a tiny amount" since 2005 when it stood at 20.5%, and is down from 24% in 1995 despite the increase in women’s educational attainment over the last quarter of a century, according to the report.

Read more: Gender pay gap fuelled by 'lack of pay transparency'

The earnings gap of 40% is an improvement of around 25% compared to the mid-1990s. But over three-quarters of this reduction over the past 25 years can be explained by the rapid rise in women becoming highly educated, the IFS said.

Women of working age are now five percentage points more likely to have a university degree than men, compared to five percentage points less likely 25 years ago.

This suggests that it is "only because of the increase in women’s educational attainment that there has been any meaningful progress in closing the gender earnings gap", according to the report.

Watch: Why do we still have a gender pay gap?

Differences in hourly wages for men and women used to be particularly large among less-well-educated workers, but this has changed. The hourly wage gap between men and women is now bigger for those with degrees or A-level-equivalent qualifications than for those with lower levels of education. 

The introduction of the UK’s minimum wage in 1998, and subsequent raises of the minimum wage have been an important factor in helping low-paid women, the IFS found. More highly educated women have not made the same kind of progress.

However, gender gaps in overall earnings are still largest when comparing low-educated men and women as low-educated women are the most likely to be doing few or no hours of paid work. Of working-age adults with GCSEs or a lower level of education, 26.5% of women do not work for pay compared with 9.5% of men.

"After accounting for the rapid improvement in women’s education, there has been almost no progress on gender gaps in paid work over the past quarter-century. Working-age women in the UK are now more educated than their male counterparts and it seems unlikely that we can rely on women becoming more and more educated to close the existing gaps," said Monica Costa-Dias, deputy research director at IFS and an author of the report.

A gender gap in working hours is another reason for the 40% earnings gap as employed women do eight fewer hours of paid work per week than men — an average of 34 per week compared to 42.

Read more: Work from home may damage women's careers, says BoE policymaker

Women are also 9.5 percentage points less likely to be in paid work at all — 83.5% of women compared to 93% of men.

Working-age women do more than 50 hours more unpaid work per month, including childcare and housework, than their male counterparts. A rise in the number of hours of paid work for women have not been met by reductions in their unpaid work, according to the report.

Having children increases employment gender gaps "substantially" and "immediately", the IFS found. Gaps in hourly wages open up more slowly after becoming parents as the impact of women switching to more family-friendly but lower-paying occupations combine with the "part-time penalty" to slow their wage progression.

Gender gaps in both paid and unpaid work seem to be driven by "deep-seated social norms and expectations", according to the report.

"Attitudes and norms surrounding the roles that women and men play in paid and unpaid work appear central to explaining persistent gender gaps. However, evidence suggests that attitudes and beliefs about gender roles may become less traditional when people observe others sharing work more equally," said Alison Andrew, a senior research economist at IFS and another author of the report.

"For this reason, ambitious policies that consistently encourage women and men to share both paid and unpaid work in a way that is less bound by strict ideas about gender roles may have transformative effects."

Read more: The best countries for women to live and work in around the world

The IFS is calling for interventions that change established norms, including government policies that consistently point in the same direction towards less radically different gender roles.

The cost to the government of more widely available free childcare could balance out if it successfully ensured that the talents of both men and women were put to their most productive uses, whether in the labour market or at home, the report found.

"The gender gap in total earnings in the UK is almost twice as large as in some other countries which suggests the gender earnings gap is heavily influenced by the policy environment and cultural and social norms.

"For example, women are likely to take on more childcare even when they are the highest earner in the household, and a number of other countries also have more generous parental leave policies than the UK," said Mark Franks, director of welfare at the Nuffield Foundation.

Watch: Helena Morrissey: Many companies will have to 'go backwards to go forwards' to close the gender pay gap

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