March’s Chart of the Month displays the percentage differences in tertiary education, participation in the workforce, and average wages, between women and men in the UK. It highlights the gender disparities that still exist within the labour market. For instance, in 2020 average wages for female workers were 15% lower than for men, yet they were 5% more likely to be in tertiary education.
Over the last ten years, women’s representation in the workforce has seen relatively stable increases. Despite this, wage discrimination happens throughout the country. Women for the last decade have been better represented in tertiary education, yet their wages and participation rates still lag behind that of men. There are many underlying societal factors that might explain this conundrum.
One such factor might be societal pressures causing the burden of childcare to still fall upon women (women in the UK spend 20% more time on childcare than men). Therefore, women disproportionately need more time out of work. One way that women can reduce their working hours is through part-time work. However, they earn less as a result, contributing to the gender pay gap.
Another factor may be that in the UK, paternity leave is not mandated, and if it is offered by businesses, it usually pays less than work would. Childcare for new-borns more likely falls upon the mothers as a result. Fortunately, they can take paid maternity leave. However, women can lose skills over their time away from work and find it harder to re-enter the labour force afterwards.
Another issue with the lack of mandated paternity leave is that employers may pre-emptively discriminate against women because of the fear of maternity leave and not hire or promote them; it is a cost for which they see no corresponding output. If paternity leave were mandated, men would have the same cost attached to them, leading to less discrimination on this basis.
However, the gender wage and participation rate gap in the UK narrowed during COVID. Online work increased employment opportunities for women who were tied down to household work, allowing them to do both at once. Women in top pay quartiles were also able to earn the same amount remotely, and the number of women in managerial and board positions increased by 2% during this period, a sign of the thinning of the glass ceiling.
In certain industries, women are still struggling to reach senior positions. For example, in the technologies industry, it is estimated that it will take another 25 years for there to be equal proportions of men and women in senior roles.
The industry disparity may be attributed to career decisions early in life. Girls have fewer role models in industries such as STEM as the famous CEOs are mostly male. Therefore, they may be less likely to choose to pursue such careers, which can lead to fewer role models for future generations.
Nordic countries are ranked by the Economist as being the most gender equitable in the world, a result of their government intervention. For example, legislation says that companies must offer paid paternity leaves. Many new fathers take time off work, reducing cultural biases that women should bear the responsibility of childcare. In Finland, Norway, and Sweden, anyone can look up what their colleagues earn, which gives firms less scope to pay unequally. In Iceland, businesses must have certificates, given by inspectors, to verify that they are paying women equally. Moreover, a variety of career choices are promoted to young girls.
Despite these progressive policies, inequalities still persist. In Iceland and Sweden, where paternity leave is most generous, only 30% of leave is taken by fathers. In Norway, this figure drops to 19%. Moreover, in Sweden, women still earn 7.4% less than men.
But this is better than Britain, where these policies do not take place; 1% of leave is taken by fathers, and the wage gap is 14%. It is clear that if the UK wants to reduce gender disparities in labour at a quicker rate, they should also implement policies that incentivise men to help women at home and reduce stereotypes.
Our Question of the Month:
Which government policies do you think would work best in the UK for addressing the gender pay gap?
Written by Zihan Tian