Labour Market

Why we should stop obsessing over the gender pay gap


Research published by UCL Institute of Education last week concluded that boys’ academic ambition at GCSE level – higher than girls’ according to its survey – could explain the “gender pay gap”. So goes the logic: boys are more likely than girls to say they plan to attend an elite institution, driven and ambitious young people outperform their peers, ipso facto, wage gap.

It is not hard to pick holes in their analysis. While it may be the case that teenage boys have higher ambitions – indeed it is possible this research can teach us something on gendered aspirations – this certainly isn’t reflected in university admissions. 57 per cent of those who go to university are female. Women represented 54.9 per cent of students at Russell Group universities in 2019. That same year, Oxford admitted 1,406 female students compared with 1,180 male students.

Meanwhile, earlier in the educational journey, girls consistently outperform boys at school, with the exception of advanced maths-based subjects. 51.5 per cent of pupils achieving AAA or better at A-level are female.

And if you look at the gender pay gap – which is negligible between men and women in their 20s,  the UCL researchers’ conclusion simply doesn’t add up. The gap has steadily declined over time to the point where it is not inconceivable that children studying their GCSEs today won’t have any gap at all by the time they reach the workplace. Perhaps it could be negative: after all, in the 22-39 age bracket the gap is -4.4 per cent (in favour of women) for part-time work.

None of this is to mention the fact that the gender pay gap is misleading itself. It has been illegal in this country to pay men and women differently for the same job since the Equal Pay Act came into force in 1970.

Gender pay gap reporting – introduced in 2017 for companies with over 250 employees but suspended in 2020 due to Coronavirus – doesn’t take into account key differentials: years of experience, job, background. It quite literally means that easyJet could be – and indeed has been – publicly demonised for reporting a pay gap of over 50 per cent. Never mind the fact that just 5 per cent of its pilots (who are paid an average of £89,000 per annum) are female, whereas women make up around 70% of cabin crew (paid under £24,000).

Perhaps most importantly, it doesn’t distinguish between full-time workers and part-time workers. Given women are more likely to work part-time, for which the average salary tends to be lower, gender pay gap reporting is almost guaranteed to reveal that men earn more.

Of greater use is the Office for National Statistics’s Annual Survey of Hours and Earnings. In 2019, it found:

  • The gender pay gap among full-time employees stands at 8.9 per cent, little changed from 2018, and a decline of 0.6 percentage points since 2012;

  • The gender pay gap among all employees fell from 17.8 per cent in 2018 to 17.3 per cent in 2019, and continues to decline;

  • For age groups under 40 years, the gender pay gap for full-time employees is now close to zero.


Their controls – such as using median rather than mean hourly earnings to avoid skewing figures towards a relatively small number of very high earners – help achieve a more accurate reflection of pay differences. But there remains limited statistical analysis of gender pay differentials in Britain which involve like-for-like comparisons (i.e. same job, background, education level, years of work experience). In the absence of this data, we cannot leap to the assumption that discrimination is at play.

It is important to ask why these UCL researchers chose to extrapolate from stated teenage ambitions the existence of a gender pay gap. If we want female pupils to be more ambitious, surely we stop telling them that regardless of how aspirational they may be, or how hard they may work, they’ll be paid less on account of their sex. It could be that it was the low hanging fruit – the media tends to readily embrace any research that can feed the victimhood narrative, and the UCL report was given due attention by The Guardian among others.

But this is all the more frustrating given the report isn’t entirely without value. The notion that we should better educate all children on how the choices they make as a teenager will affect career and earning potential later in life is an important one. A fundamental rethink of careers guidance could better prepare pupils for what happens after they turn 16 – and a key element of this could be enlightening them about the options outside the classroom. The IEA has posted two videos this month on education, apprenticeships, training and universities. These focused not on perpetuating victimhood narratives but on how we best equip young people with the knowledge and skills they need for the future workforce.

 

The videos:

https://www.youtube.com/watch?v=1kaAzQu6BPw

https://www.youtube.com/watch?v=_7_CfPBiycY

 

Director of Communications

Annabel Denham is Director of Communications at the Institute of Economic Affairs. She previously worked at The Entrepreneurs Network, an offshoot of the Adam Smith Institute, where she was Associate Director and ran the APPG for Entrepreneurship. Prior to that, Annabel worked as a Researcher for former-MP Lord (Peter) Lilley and as Deputy Business Features Editor at City AM.


2 thoughts on “Why we should stop obsessing over the gender pay gap”

  1. Posted 31/07/2020 at 14:07 | Permalink

    All very good points. In addition, it is important to mention that all of these approaches to thinking about the problem assume that people are and should be thinking about material rewards and Russell group universities. Of course, we want people to be motivated in life and not to be idle and to make the best use of their talents. However, it is strange that the left, who go on about greed and capitalism all the time, seem to regard money as the measuring rod of success.

  2. Posted 01/08/2020 at 05:27 | Permalink

    My friend at work is very concerned about the gender pay gap. I am not.

    His wife works part time work to look after the children, as he does not do half the housework and cooking. He is more ambitious, even while less talented. Therefore he has earned a lot more than her since their marriage.

    I was at home for six years while my wife worked, on order to look after the kids. I do half the housework and cooking. Over the years her earnings and mine would be very similar.

    What people do, not what they worry about, is why society has a pay gap. And yet those most guilty fail to see it.

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