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Who works for whom and the UK gender pay gap

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  • Sarah Louise Jewell

    (Department of Economics, University of Reading)

  • Giovanni Razzu

    (Department of Economics, University of Reading)

  • Carl Singleton

    (Department of Economics, University of Reading)

Abstract

This study reports novel facts about the UK gender pay gap. We use a representative, longitudinal and linked employer-employee dataset for 2002-16. Men's average log hourly wage was 22 points higher than women's in this period. We find 16% of this raw pay gap is accounted for by estimated firm-specific wage effects. This is almost three times the amount explained by gender occupation differences. When we decompose a preadjusted measure of the pay gap, we find less than 1 percentage point or a 6% share is accounted for by the gender allocation across high and low wage firms. In other words, only a small share of what is traditionally referred to as the 'unexplained' part of the pay gap is explained by the differences between men and women in whom they work for.

Suggested Citation

  • Sarah Louise Jewell & Giovanni Razzu & Carl Singleton, 2019. "Who works for whom and the UK gender pay gap," Economics Discussion Papers em-dp2019-06, Department of Economics, University of Reading.
    • Handle: RePEc:rdg:emxxdp:em-dp2019-06
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    File URL: http://www.reading.ac.uk/web/FILES/economics/emdp201906v2.pdf
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    Cited by:

    1. Tim Butcher & Karen Mumford & Peter N. Smith, 2019. "The Gender Earnings Gap in British Workplaces: A Knowledge Exchange Report," Discussion Papers 19/10, Department of Economics, University of York.
    2. John Forth & Nikolaos Theodoropoulos, 2023. "Employers and the gender wage gap," IZA World of Labor, Institute of Labor Economics (IZA), pages 511-511, October.
    3. Forth, John & Theodoropoulos, Nikolaos, 2022. "Earnings Discrimination in the Workplace," GLO Discussion Paper Series 1110, Global Labor Organization (GLO).
    4. Kaya Ezgi, 2021. "Gender wage gap across the distribution: What is the role of within- and between-firm effects?," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-49, January.
    5. Melanie Jones & Ezgi Kaya, 2023. "The UK gender pay gap: Does firm size matter?," Economica, London School of Economics and Political Science, vol. 90(359), pages 937-952, July.
    6. Amadxarif, Zahid & Angeli, Marilena & Haldane, Andrew G & Zemaityte, Gabija, 2020. "Understanding pay gaps," Bank of England working papers 877, Bank of England.
    7. Melanie Jones & Ezgi Kaya, 2022. "The gender pay gap: what can we learn from Northern Ireland? [Women’s labour market participation in Northern Ireland: a re-examination of the ‘traditionalism’ argument]," Oxford Economic Papers, Oxford University Press, vol. 74(1), pages 94-114.
    8. Li, Jiang & Dostie, Benoit & Simard-Duplain, Gaëlle, 2020. "What Is the Role of Firm-Specific Pay Policies on the Gender Earnings Gap in Canada?," IZA Discussion Papers 13907, Institute of Labor Economics (IZA).
    9. Sophie Clot & Marina Della Giusta & Giovanni Razzu, 2020. "Gender gaps in competition: new experimental evidence from UK," Economics Discussion Papers em-dp2020-15, Department of Economics, University of Reading.
    10. Alessandra Casarico & Salvatore Lattanzio, 2024. "What Firms Do: Gender Inequality in Linked Employer-Employee Data," Journal of Labor Economics, University of Chicago Press, vol. 42(2), pages 325-355.
    11. Masso, Jaan & Meriküll, Jaanika & Vahter, Priit, 2022. "The role of firms in the gender wage gap," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 454-473.
    12. Pham, Tho & Schaefer, Daniel & Singleton, Carl, 2024. "Unequal Hiring Wages and Their Impact on the Gender Pay Gap," IZA Discussion Papers 17285, Institute of Labor Economics (IZA).
    13. Melanie Jones & Ezgi Kaya, 2024. "Performance‐related pay and the UK gender pay gap," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(4), pages 512-529, October.
    14. Phan, Van & Singleton, Carl & Bryson, Alex & Forth, John & Ritchie, Felix & Stokes, Lucy & Whittard, Damian, 2022. "Accounting for Firms in Ethnicity Wage Gaps throughout the Earnings Distribution," IZA Discussion Papers 15284, Institute of Labor Economics (IZA).
    15. Jones, Melanie K. & Kaya, Ezgi, 2022. "Organisational Gender Pay Gaps in the UK: What Happened Post-transparency?," IZA Discussion Papers 15342, Institute of Labor Economics (IZA).
    16. Kaya, Ezgi, 2024. "Labour Market Performance of Immigrants: New Evidence from Linked Administrative Data," GLO Discussion Paper Series 1418, Global Labor Organization (GLO).
    17. Yannis Galanakis & Amanda Gosling, 2024. "Mind the (Gender Pay) Gap - The role of Board Gender Composition," Working Papers 045, The Productivity Institute.
    18. Van Phan & Carl Singleton & Alex Bryson & John Forth & Felix Ritchie & Lucy Stokes & Damian Whittard, 2023. "Accounting for firms in gender-ethnicity wage gaps throughout the earnings distribution," Economics Discussion Papers em-dp2023-16, Department of Economics, University of Reading.
    19. Riccardo Leoncini & Mariele Macaluso & Annalivia Polselli, 2024. "Gender segregation: analysis across sectoral dominance in the UK labour market," Empirical Economics, Springer, vol. 67(5), pages 2289-2343, November.
    20. Riccardo Leoncini & Mariele Macaluso & Annalivia Polselli, 2023. "Gender Segregation: Analysis across Sectoral-Dominance in the UK Labour Market," Papers 2303.04539, arXiv.org, revised Dec 2023.

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    More about this item

    Keywords

    gender wage gap; firm-specific wages; occupation premiums;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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