Barely any change to gender earnings gap in 25 years

The average working-age woman in the UK earned 40% less than her male counterpart in 2019. This is because, among 20- to 55-year-olds not in education, long-term sick or retired:

  • Women are 9.5 percentage points less likely to be in paid work at all (83.5% of women and 93% of men).
  • Women do eight fewer hours of paid work per week than men if they are employed (34 per week on average rather than 42).
  • Women in paid work earn 19% less per hour on average (£13.20 rather than £16.30).

The 40% earnings gap is about 13 percentage points, or 25%, lower than in the mid-1990s. But over three-quarters of the reduction in the earnings gap over the past 25 years can be explained by the rapid increase in women’s educational attainment. Women of working age have gone from being five percentage points less likely, to five percentage points more likely, to have a university degree than men. 

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. The additional combined effect on the gender earnings gap of other changes in the economy, society and policy, including additional public support for childcare for example, has been comparatively small.

These are among the key findings of new research on gender inequalities undertaken for the IFS Deaton Review of Inequalities, funded by the Nuffield Foundation.

  • Comparing the amount earned per hour between women and men in paid work – the typical measure of the ‘gender pay gap’ – reveals a gap of around 19%, down from 24% in 1995 and 20.5% in 2005. This gap has fallen by only a tiny amount since 2005 despite the increase in women’s educational attainment over that period.
     
  • In a big break from the past, 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 education. It used to be that gender differences in hourly wages were especially large among less-well-educated workers. The introduction of, and increases to, the UK’s minimum wage have been an important factor in helping low-paid women. More highly educated women have not made comparable progress.
     
  • Gender gaps in employment and hours increase substantially immediately upon parenthood. Gaps in hourly wages open up more slowly after childbirth as the impacts 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 paid and unpaid work seem to be driven by deep-seated social norms and expectations. Interventions that change established norms, perhaps through an accumulation of policies which consistently point in the same direction towards less radically different gender roles, could have transformative effects.

There are large costs to the nation as a whole associated with the status quo. Even expensive policies, such as much more widely available free childcare, could eventually pay for themselves if they successfully ensure that the talents of both men and women are put to their most productive uses, whether in the labour market or at home.