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Mind the gap!

The gender pay gap may be decreasing but women still face financial disadvantage for having children. Employment law specialist Michael Newman looks at the recent research on the gender pay gap.

Mother and baby
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    Michael Newman is a discrimination and employment law specialist.
    The gender pay gap is far from a perfect measure of gender inequality – by focusing on pay, it blurs the distinction between women choosing not to follow traditional working patterns, and discrimination that prevents them from advancing their careers. However, the ready availability of statistics on earnings makes it easy to track over time, and so is a useful mirror to hold up to the working population.

    Recent research from the Resolution Foundation highlights the changes in the gender pay gap between different generations, from the 'greatest generation' (those born between 1911- 1925) all the way to 'millennials' (those born between 1981 – 2000). 

    The figures are stark – the gender pay gap is consistently decreasing – but the broader trend is more concerning. Despite the significant differences between the generations (from life expectancy, working patterns, and the use of technology), one constant is that women will be penalised financially as a result of having children. 

    The other consistent pattern is that the gender pay gap increases until around age 40, starting immediately upon entry to the employment market and continuing to steadily rise, regardless of the generation you belong to. 

    One unexplored aspect of the differences between the generations is how the gender pay gap is affected by the ages at which different generations tend to start a family – we will not know whether millennials face a delayed impact as a result of generally having children later, or whether the improved gender pay gap is actually maintained throughout their working lives.

    While the Resolution Foundation cites the decrease in “labour market experience” as a contributing factor to the gender pay gap, it remains to be seen whether this is a cause or mere correlation. If it were the former, you would expect to see the gender pay gap decrease when a woman returns to work; instead, the data shows that the pay gap tends to widen at this point.

    What the research really highlights is that although generational boundaries may be artificial (do your characteristics really changed when you are born in 1981 rather than 1980?), the penalty paid by women for bearing the brunt of childcare responsibilities remains very real.

    Source: RF analysis of ONS, Quarterly Labour Force Survey; ONS, Annual Survey of Hours and Earnings; ONS, New Earnings Survey Panel Dataset

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