University of Bath: Barely any change to gender earnings gap in 25 years accounting for increases in women’s education

Findings from an Institute for Fiscal Studies (IFS) report released today (Monday 6 December) highlight that in 2019 the average working-age woman in the UK was still earning 40% less than their male counterparts – revealing hardly any change to the gender wage gap in 25 years once improvements in women’s education have been accounted for.

Key findings of the new research on gender inequalities, undertaken for the IFS Deaton Review of Inequalities funded by the Nuffield Foundation, show that women are less likely to be in paid work than men, do fewer hours of paid work, and that those in paid work earn less per hour on average than men.

An accompanying IFS commentary – ‘Gender Revolution, Evolution or Neverlution?’ – authored by Lynn Prince Cooke (University of Bath) explores why and how these inequities have become entrenched and considers what policymakers might now do to tackle them.

In context, whilst the current 40% earnings gap is lower than in the mid-1990s, this narrowing is mostly explained by rapid increases in women’s improved educational attainment: e.g., women of working age have gone from being 5% less likely, to 5% more likely to have a degree than men. By comparison, other changes in the economy, society, and policy, including additional support for childcare, have all had comparatively minor effects in narrowing the gap.

Writing in her commentary, Professor Cooke from the University of Bath’s Department of Social & Policy Sciences and Centre for the Analysis of Social Policy explains how persistent gender inequalities are a vicious cycle: ‘Women’s relative social status disadvantages them in the organizational allocation of economic resources and power, and their relative economic resources and power reinforces their lower social status.’

Gender earnings equality, however, reflects more than relative social and economic power, argues Professor Cooke. As she elaborates: “There is a physical dimension as well. Violence against women and sexual harassment are further methods of oppression – problems that have been exacerbated by the pandemic. Women face these risks from birth, through schooling, and in the workplace. In all, the justice system and policy need to do much, much more to rectify the economic, social, and physical roots of gender inequalities.”

An important part of this, argues Professor Cooke, is to encourage a norm of greater caring among men. In a related IPR blog, Professor Cooke and Dr Kathrin Morosow from the University of Manchester make the case for enhancing UK paid fatherhood leaves. Parental leave in the UK lags behind much of Europe, which, say the authors, undermines wider efforts to improve gender wage equality given the disproportionate impact of raising children on women’s careers and advancement.

For example, UK fathers are entitled to only 1 or 2 weeks of paternity leave, paid at £151.97 a week, or 90% of the average weekly earnings (whichever is lower). They are also entitled to take any of 37 weeks of the shared parental leave that follows but this is also paid at the same low rate. By contrast, in Finland fathers are permitted 9 weeks of dedicated father leave paid at 70% of earnings, while Iceland offers each parent 6 months paid parental leave at 80% of earnings.

Generous paid fatherhood leaves not only support mothers’ quicker return to employment, they enhance couple relationships and improve children’s social and cognitive outcomes. A commonly cited argument used against expanded provision for parental leave is cost. However, as the researchers argue, calculations which underpin impact assessments are blunt and fail to recognise the many individual, familial and societal benefits enhanced fatherhood leave could bring, underscored by the high productivity in Scandinavia where parental leaves are most generous.

They suggest that if the UK government is serious about reducing gender earnings inequalities, it should try to monetise the financial benefits of generous paid leave for fathers in its impact assessments. As they explain: ‘Expanding paid leave in the UK for fathers not only helps to diminish the gender wage gap, it can also improve multiple aspects of the lives of millions of UK families.’

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