Gender pay gap among graduates ‘static for 20 years’

23 Aug 16
The wage gap between higher-educated women and men is the same as it was 20 years ago, an IFS report has found.

Research from the Institute for Fiscal Studies, funded by the Joseph Rowntree Foundation, has examined wage inequality between the genders. It found that although the gap between male and female hourly wages has been shrinking, some groups of women have not moved toward parity.

At present the gap in average hourly wage rates between men and women is 18%, compared with 23% in 2003 and 28% in 1993. However, this steady decline has not been seen among graduates or those with A-levels.

Robert Joyce, associate director at IFS and an author of the report, said: “The gap between the hourly pay of higher-educated men and women has not closed at all in the last 20 years. The reduction in the overall gender wage gap has been the result of more women becoming highly educated, and a decline in the wage gap among the lowest-educated.”

Also, the report found that the wage gap is smaller when comparing young women – before they become mothers – and their male counterparts. After a woman’s first child is born, the gap widens consistently for 12 years, by which point the women receive 33% less pay per hour then men. 

This is likely to be associated with a reduction in the number of hours worked after childbirth, rather than women receiving an immediate cut in hourly pay. Women then lose out on subsequent wage progression over time, allowing the incomes of men – and women – working full time to pull further ahead.

According to Joyce, “understanding that lack of progression is going to be crucial to making progress in reducing the gender wage gap.”

Also, women who take time out from paid work altogether miss out on wage growth when they return to the labour market. Those women returning to employment are on average 2% worse off for every year out of work, in terms of wage growth, compared with women remaining in employment. 

This ‘time out’ penalty is even more pronounced among higher-educated women, who are around 4% worse off for every year away from work. However, women with the lowest level of education do not seem to be affected by this phenomena, despite the fact they take off longer on average compared with those who are highly educated. The report speculates this is because they have less wage growth to miss out on.

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