Business

Gender pay gap ‘widens for graduates’

The gender pay gap between male and female graduates is widening while lesser-educated men and women are seeing that gap narrow, a report says.

The Institute for Fiscal Studies found the average hourly wages of men and women with degrees differed by 22% in 2016, compared with 21% in 1993.

Overall, the think tank found women earn 20% less than men now, compared to a gap of nearly 30% in the early 1990s.

A key factor was women working part-time in motherhood, the report said.

When women become mothers they may move out of full-time employment – where experience is rewarded with progression and higher pay – and into part-time work, the report said.

"The effect of part-time work in shutting down wage progression is especially striking," it added.

"Whereas, in general, people in paid work see their pay rise year on year as they gain more experience, our new research shows that part-time workers miss out on these gains."

The vast majority of part-time workers were women, especially mothers of young children, the report said.

It also found that mothers were likely to lag 30% behind in earnings than fathers with a similar educational background by the time their children reach 20.

'Lose out'

The report, which was compiled on behalf of the independent Joseph Rowntree Foundation charity, says the lack of earnings growth in part-time work particularly affects graduate women, "because they are the women for whom continuing in full-time paid work would have led to the most wage progression".

It says, for example, that a graduate who has worked full-time for seven years before having a child would, on average, see her hourly wage rise by a further 6% as a result of continuing in full-time work for another year, "but would see none of that wage progression if she switched to part-time work instead".

Monica Costa Dias, associate director at the IFS and a co-author of the report, said: "It is remarkable that periods spent in part-time work lead to virtually no wage progression at all."

The pay gap has narrowed most considerably between women and men educated to GCSE-level with the difference in average hourly pay falling from 28% in the early 1990s to about 18% in 2016.

The report said this change from 1993 is because "women in work are now better educated relative to men than they were".

The research shows women with A-levels have seen the wage gap close from 29% in 1993 to around 22%.

Robert Joyce, associate director at the IFS and co-author of the report, said: "Traditionally it has been lower-educated women whose wages were especially low relative to similarly educated men.

"It is now the highest-educated women whose wages are the furthest behind their male counterparts – and this is particularly related to the fact that they lose out so badly from working part-time."

Part-time progression

The report said a key challenge for future research was to understand why part-time work shuts down wage progression so much.

"There are a number of possibilities, including less training provision, missing out on informal interactions and networking opportunities, and genuine constraints placed upon the build-up of skill by working fewer hours," it said.

However, even before women have their first child, the IFS said they were paid 10% less than men on average.

Mr Joyce said new legislation that requires UK companies with more than 250 employees to publish their gender pay gaps "could be part of the solution" since women may not be aware that men were being paid more than them.

Original Article

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