New research shows discrimination is not causing the gender pay gap

Women's pay rates reflect different values and choices

Discrimination is not a significant cause of differences in pay between men and women according to new research released by the Institute of Economic Affairs today.

The report – Should We Mind the Gap?* – written by Professor J. R. Shackleton** concludes that “we should make far less of a song and dance about the gender pay gap”.

The research raises serious doubts about the supposed benefits of equal pay and anti-discrimination legislation and argues they may well be counter-productive.

The pay gap is falling, likely to fall further and may go into reverse. But its interpretation and dynamics are poorly understood by policy-makers, let alone the general public.

The gaps in pay that do exist are principally explained by differences in working conditions and the values, preferences and choices of individual men and women, which are beyond the reach of government.

Among the report’s findings are the following:

• For 22-29 year old men and women, the median full-time pay gap is now less than 1 per cent

• Women’s mean part-time earnings are now higher than those of male part-timers

• Pay gap comparisons between countries are much more favourable to the UK than is commonly understood

• Men tend to work longer hours and put in more overtime, with twice as many male as female managers working more than 48 hours a week

• Men have a greater chance than women of losing their jobs and of suffering serious injury at work

• Men tend to seek higher pay and career success – while more women seek job satisfaction

• 2/3rds of women plan to take a career break, while less than 1/8th of men do

• Of top 25 ideal employers for women, 12 were in relatively low-paid public or voluntary sector, against only 4 for men

• Proposals to introduce compulsory pay audits, to give greater subsidies to childcare, to use government procurement to support equal pay drives, and increased flexible working are unlikely to narrow the gap significantly

• Other pay gaps – ethnic gaps, disability, religious, sexual orientation - exist. These interact in unpredictable ways and thus make a consistent public policy impossible to achieve

Professor Shackleton said:

"The widespread belief that the gender pay gap is a reflection of deep rooted discrimination by employers is ill-informed and an unhelpful contribution to the debate. The pay gap is falling but is also a reflection of individuals’ lifestyle preferences. Government can’t regulate or legislate these away – and shouldn’t try to."

The report has led the IEA’s Editorial Director, Philip Booth, to call for the repeal of legislation that purports to promote equality in the workplace.

Professor Booth said:

"In the last decade, in the name of promoting equality, we have had a huge increase in the burden placed upon employers. This can often harm the very people it is intended to help. Indeed, given this new evidence, we should question the need for the Equal Pay Act. It seems to be individual choices and not systematic discrimination that determine pay and conditions."

ENDS

*
Should We Mind the Gap? Gender Pay Differentials and Public Policy by J. R. Shackleton, Hobart Paper 164, Institute of Economic Affairs, £10.00.

** J. R. Shackleton is Professor of Ec