THE BLOG

What Causes the Gender Pay Gap?

02/03/2016 11:55 GMT | Updated 02/03/2017 10:12 GMT

The gender pay gap is very much in the news at the moment after the announcement of government plans for larger companies to publish their gender pay data. A study out today by the Association of Accounting Technicians shows the experiences of men and women working in finance vary drastically in terms of pay, progression and prejudice.

The study shows that not only do men expect bigger salary rises than women and are more likely to push for - and get - pay rises, but that almost three times as many women in middle management say they have experienced discrimination because of their gender than men in the same position.

Moreover, it also shows how starting a family disproportionately affects women's career progression. Women were much more likely to think there is a gender pay gap than men - almost two thirds of men said they thought men and women were treated equally when it came to progression opportunities and remuneration, compared to less than half of women.

The gender pay gap currently stands at around 19.2%, but research shows it gets wider as women get older. The pay gap among women over 40 is 25.5%, possibly linked to women who take a career break to bring up children.

In November, the Office for National Statistics published figures showing the gender pay gap for full-time employees has fallen to its lowest level, although it has changed very little in the last four years.

It measures the gender pay gap based on hourly pay and says it has decreased to 9.4%, from 9.6% in 2014, the lowest gap since its survey began in 1997. When part-time workers are included, where women dominate [41% work part time compared with 11% of men], there is no fall in the gender pay gap and it remains at 19.2%.

Complex issues

The gender pay gap is often confused with equal pay for equal work, but it is more complex than that and reflects the fact that lower paid jobs are more likely to be filled by women than men. There are many reasons for this. They include the fact that women tend to gravitate to sectors which are historically lower paid - such as care work - rather than the higher paid sectors including IT and engineering; the fact that women tend to be more likely to be in support functions such as HR than in more core business areas such as finance; the impact of career breaks; women's reluctance to ask for more pay, itself a complex issue; and unconscious bias and discrimination against women which holds them back from being promoted and can ultimately lead to them being pushed out.

Another often linked factor is flexible working and the fact that it is still mainly women who are the prime carers of children and therefore more likely to work reduced hours, paying the price in terms of career progression. This is even if they end up working more or less full-time hours in those part-time jobs. Historically women have put up with this treatment because their need to work part time outweighs their anger at the injustice of it and because it is hard to argue what part time is these days when so many are working all the time.

It's an unfairness that is putting men off asking for reduced hours. Fear of the impact on their career progression is one of the main reasons men cite for not asking for flexible working. I've interviewed quite a few men who do work part time. The responses are interesting. They range from one man who said he didn't want to complain about the fact he more or less worked full time, but got part-time pay because women put up with it and it wouldn't be fair [it isn't fair!] to another who had negotiated an extra day's pay on the grounds in recognition that he would probably do a little bit more than his hours. I wonder how many women have managed to negotiate a similar deal.

Allied to the problem of career progression and reduced hours is the lack availability of challenging, better paid part-time jobs. Still. Things are improving, but for many the pace of change is too slow.

For Claudia Goldin, Professor of Economics at Harvard University, flexible working is the main cause of the gender pay gap. She says pay gaps are higher in professions where work impinges more on family life. So, for example, in corporate law or consultancy, there can be tremendous demands that eat into sleep, weekends and holidays. There is a very big pay reward for those who are prepared to work like this, says Goldin.

The AAT study suggests that the reasons are highly complex and often linked. While there is criticism about the kind of information that the government wants to see published and the lack of any analysis or context to it, it is surely a step forward. It is hard to deal with a problem in the absence of hard data, even if the data itself needs to be subject to analysis.