The gender pay gap in the UK: children and experience in work

Despite some convergence, the gender pay gap remains large. In this study, we use BHPS-USoc data to document the evolution of the gender pay gap in the UK over the past 25 years and its association with fertility. We also investigate the potential role of various differences in career patterns between men and women and how they change with the arrival of the first child. We show that differences in accumulated years of experience and in working hours play an important role. We develop an empirical wage model to estimate the causal effect of working experience in the wages of women. Estimates from this model are then used to simulate counterfactual scenarios where women always work full-time if at all and where women work as much as men do. We find that differences in working experience can explain up to two thirds of the existing gender pay gap of college graduates 20 years after the first childbirth, and that the gap is largely driven by differences in working hours. The role of working experience is more moderate for individuals with no college education, but it can still account for about one third of the overall gender wage gap 20 years after childbirth.