Businesses have made 'almost no progress' on gender pay gaps, says think tank

Experts say stereotypes are fuelling continued inequality and urge firms to urgently address ‘sexist’ policies and cultures

Businesses’ attempts to reduce the gender pay gap in the UK have made “almost no progress”, according to a think tank.

Research from the Institute of Fiscal Studies (IFS), funded by the Nuffield Foundation, found that the average working-age woman in the UK earned 40 per cent less than her male counterpart in 2019: just 13 percentage points (or 25 per cent) lower than in the mid 1990s.

The IFS added that most of this progress was because of increased educational attainment among women, with changes to business practices contributing very little. Education alone accounted for a 10 percentage point fall in the gender pay gap over this period.

Monica Costa-Dias, deputy research director at the IFS, said: “After accounting for the rapid improvement in women’s education, there has been almost no progress on gender gaps in paid work over the past quarter-century.” 

She added it was “unlikely” that companies could rely on women becoming more educated to close the existing gaps, despite more women now being more educated than their male counterparts.

The report said that while women were now 5 per cent more likely to have graduated from university than men, male graduates still earn 23 per cent more an hour than female graduates.

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In comparison, among those who left school at age 16 or earlier, men were paid 17 per cent more an hour than their female counterparts.

Across the board, women in work earned 19 per cent less per hour on average, receiving on average £13.20 compared to £16.30 for men.

Women were also 9.5 percentage points less likely to be in paid work at all (83.5 per cent of women and 93 per cent of men), and when in paid work were more likely to be working fewer hours than men (34 per week on average rather than 42 per cent).

Dr Jo Kandola, head of digital solutions at Pearn Kandola, said that not only was education a misconceived barrier to equal pay, but firms were also wrong to think women needed to “up their game and make more effort” to get into senior roles, such as negotiating salary or developing new skills. 

She also warned that just improving the recruitment process would not solve the gender pay gap: “Our research has found that women more easily associate men with competence than they do women, so having gender-balanced panels is unlikely to lead to different outcomes.”

Instead, she said that the true cause of the gender pay gap was stereotypes, adding that “we need to reject the belief that men and women are different in terms of their skills and abilities”.

Charlotte Woodworth, gender equality campaign director at Business in the Community, told People Management that one way employers can take action is by ensuring their company has carer-friendly working cultures and policies.

The “vast majority” of employers have policies and cultures that “reinforce outdated stereotypes of women as carers and men as breadwinners”, which is a driver of persistent gender inequality at work, she said.

“That means urgently addressing the arguably sexist model many organisations follow that sees male carers given significantly less support in terms of the time and money available to enable them to deliver their caring responsibilities than women,” she said.