The gender earnings gap: evidence from the UK

Rising female labour-force participation has been one of the most striking changes to have occurred in industrialised countries’ labour markets over recent decades. In the UK between 1973 and 1993, female labour-force participation rose from 57 per cent to 68 per cent for women aged 16 to 64.2 Women now account for half of all employees and 36 per cent of those working full-time (compared with 38 per cent and 30 per cent respectively in 1971).3 Yet, although women have been the main beneficiaries from the creation of new jobs, they have still not gained earnings parity with men. For women working full-time,however, the pay gap has been closing, and the New Earnings Survey reports a rise in the ratio of median hourly pay of full-time women to men from 65 per cent in 1970 to 73 per cent in 1976 and a more gradual increase thereafter to 80 per cent in 1994. In contrast, the relative earnings position of women working part-time has changed little for over two decades. Our period of study (the mid-1970s to the early 1990s) saw significant shifts in the composition of female employment that are potentially important in explaining changes in the gender gap. First, there has been a notable increase in the average age of full-time working women which has primarily resulted from increased employment amongst women of child-bearing age. This has shifted the