1. How Much Less do Women Earn? Examining Differences by Region Dr. Vanessa Gash University of Manchester

2. Introduction to the project (1) Majority of the findings that will be presented at todays workshop are the product of a commissioned project by The Government Equalities Office. The project examined how the gender pay gap (the gap between men and womens average hourly earnings) changed in the past ten years. It applied new statistical methods to the analysis of both the direct and indirect drivers of the pay gap. These new methods include (1) bootstrapping to get an interval of accuracy around the pay gap and (2) the application of a simulation method in our decomposition of the gender pay gap. The project used the British Household Panel Survey (BHPS) data to examine the pay gap in 1995-1997 and in 2004-2007.

3. Introduction to the project (2) The project used regression methods to analyse the causes of the gender pay gap in the past ten years in the UK. The BHPS work-life history data, covering more than 17 years for each of over 10,000 people, allowed us to control for variation in market experience between women and between men and women. The project then decomposed the constituents of the gender pay gap for 1995-1997 and in 2004-2007 allowing an assessment of divergence in the causes of the gender pay gap over time.

4. Introduction to the project (3) The project also applied structural equation models to reveal the direct and indirect drivers of the pay gap. In the structural equation models part-time work, career interruptions and sex segregation were all found to be significant drivers of the pay gap. One of the key recommendations of the report was the importance of career interruptions on womens life long earning capacity.

5. Previous work in the area What explains pay differentials? Productivity-related differences between employees Human capital: skills and qualifications which make someone more attractive in the labour market Education level Employment experience Recent research shows: full-time labour market experience accounts for a large proportion of the gender pay gap the more detailed the account of labour market experience, the better the prediction of the GPG While education is a determinant of wages, it is not an important driver of the gender wage gap

6. Previous work in the area Institutional context of gender wage inequality There is a smaller gender wage gap in the public sector, (Grimshaw, 2000). Occupational segregation is a significant contributor to the gender pay gap (i.e. Olsen & Walby, 2004; Mumford and Smith, 2007) How gendered culture and values influence earnings Swaffield (2007) finds that differences between women in gender role attitudes are an important driver of wages.

8. How do we measure the gender pay gap? 1-(womens [overall] hourly earnings / mens full-time earnings) Between 2004-2007 all womens mean hourly earnings were £10.10 an hour. Between 2004-2007 all full-time mens earnings were £12.71 an hour. £10.10/£12.71 = 0.79 So women earn 79% of what full-time men earn per hour, and the gender pay gap is 21%. This measure uses full-time male earnings as the denominator. It is based on the assumption that full-time male earnings is the baseline against which other workers can be compared.

9. Forms of Employment BHPS, by Gender and Time

10. How do we measure the gender pay gap? We do not include mens part-time earnings as part-time work remains an outlier of male working experience. Though nearly 10% of male workers work part-time hours. Other institutions measure the GPG differently. The Government Equalities Office uses all male employees wages (rather than ft employees) as the denominator. The OECD also uses all male wages as the denominator. In countries with high rates of male part-time employment, the inclusion of male part-time workers earnings in the denominator tends to decrease the gender pay gap.

11. The Gender Pay Gap in GB, BHPS data 2004-2007FemaleMale Full-time Pay Gap Part-time Pay Gap Overall Pay Gap Full-time Employees£10.85£12.71 Part-time Employees, <30 hrs a week£8.77£8.75 All Employees£10.10£12.42 1995-1997FemaleMale Full-time Pay Gap Part-time Pay Gap Overall Pay Gap Full-time Employees£8.94£10.96 Part-time Employees, <30 hrs a week£7.01£8.21 All Employees£8.20£10.79

12. The Gender Pay Gap in GB 2004-2007FemaleMale Full-time Pay Gap Part-time Pay Gap Overall Pay Gap Full-time Employees£10.85£12.71 Part-time Employees, <30 hrs a week£8.77£8.75 All Employees£10.10£12.420.21 1995-1997FemaleMale Full-time Pay Gap Part-time Pay Gap Overall Pay Gap Full-time Employees£8.94£10.96 Part-time Employees, <30 hrs a week£7.01£8.21 All Employees£8.20£10.79 0.25

13. The Gender Pay Gap in GB 2004-2007FemaleMale Full-time Pay Gap Part-time Pay Gap Overall Pay Gap Full-time Employees£10.85£12.710.15 Part-time Employees, <30 hrs a week£8.77£8.750.31 All Employees£10.10£12.420.21 1995-1997FemaleMale Full-time Pay Gap Part-time Pay Gap Overall Pay Gap Full-time Employees£8.94£10.960.18 Part-time Employees, <30 hrs a week£7.01£8.210.36 All Employees£8.20£10.79 0.25

14. Gender pay gap by region