The gender pay gap in the UK: children and experience in work

Monica Costa Dias,Francesca Parodi,Robert Joyce

doi:10.1093/oxrep/graa053

Abstract

Abstract In this study, we document the evolution of the gender pay gap in the UK over the past three decades and its association with fertility, examining the role of various differences in career patterns between men and women and how they change with the arrival of the first child. We show that differences in accumulated years of labour market experience play an important role, while differences in industry, occupation, and job characteristics explain less, conditional on working experience. We develop an empirical wage model to estimate the causal effect of working experience on the wages of women. Estimates from this model are then used to simulate two counterfactual scenarios in which women who are employed always work full-time, or women’s rates of both part-time and full-time work are the same as men’s. We find that differences in working experience explain up to two-thirds of the gender pay gap of college graduates 20 years after the first childbirth, and that the gap is largely driven by differences in full-time experience. The role of working experience is more moderate for individuals with no college education, but it can still account for about one-third of the overall long-term gender wage gap.

Highlights

Gender differences in earnings are essentially universal across countries
The employment rates of mothers in English-speaking countries tend to fall in the middle of the table, close to the average for OECD and EU countries
We find similar but more volatile patterns when reproducing the figures on UK Household Longitudinal Study (UKHLS) data

Summary

Introduction

Gender differences in earnings are essentially universal across countries. Within the developed world those gaps have tended to fall greatly over the last century, progress has stalled in recent decades and the gaps remain sizeable (Goldin, 2014; Blau and Kahn, 2017). A closer look reveals a caveat to that: whereas the gender wage gap is fairly stable in the years before childbirth and begins to gradually increase from the time of the first child, occupation and industry differences between men and women seem to be on a more uniformly increasing trajectory that starts a few years before the birth of the first child. This may in part be due to job changes in anticipation of having children. We focus on working experience in what follows, to examine its causal role on gender differences in wages

Model and estimation

Results

Policy implications

VIII. Concluding remarks