Part-time work paves way to gender pay gap

A lack of progression up the part-time pay scales is a key reason for the persistent gender pay gap, finds a new report for the Joseph Rowntree Foundation.

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With large companies filing their first mandatory gender pay reports and many revealing persistent gaps between male and female pay, new research by the Institute for Fiscal Studies concludes mothers suffer a large and long-term pay penalty from part-time working.The gender wage gap has come down from 30% in the early 1990s to around 20% today the reportWage Progression and the Gender Wage Gap: The causal impact of hours of work, calculates. However, progress on full pay alignment has all but stalled. Various measures showing at current rates the gender pay gap will only close well into the next century. The IFS’s research, which was funded by social change campaigners the Joseph Rowntree Foundation, shows one important factor is that mothers spend less time in paid work and more time working part-time than fathers. As a result, they miss out on earnings growth associated with more experience.

Part-time work caps pay progression

While there are lots of reasons for the pay gap, the effect of part-time work on wage progression is especially striking, says the IFS. People in paid work generally see their pay rise annually and as they secure more experience. The new research shows part-time workers miss out on these gains.The vast majority of part-time workers are women, especially mothers of young children. The study finds that by the time a first child is grown up (aged 20), mothers earn about 30% less per hour, on average, than similarly educated fathers.About a quarter of that wage gap is explained by the higher propensity of the mothers to have been in part-time rather than full-time paid work while that child was growing up, and the consequent lack of wage progression. About a further tenth of that gap is explained by mothers’ higher propensity to have taken time out of the labour market altogether.

Graduate women’s lifetime earnings hardest hit

The lack of earnings growth in part-time work has a particularly big impact for graduate women, because by continuing in full-time paid work, they would have seen the most wage progression.A graduate who worked full-time for seven years before having a child would, on average, see her hourly wage rise by a further 6% (over and above general wage inflation) as a result of continuing in full-time work for another year. However, she would see none of that wage progression if she switched to part-time work instead, shows the study. 
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Improving part-time wage progression could close gender pay gap

The IFS proposes that improved wage progression in part-time work could play a significant role in closing the gender wage gap – especially among graduates. Women continue to earn less on average than men despite the fact that they are better educated on average.While the gender wage gap has from 28% to 18% for working mothers educated to GCSE level, it has not fallen at all in the last 25 years for the highest-educated women. Female graduates still earn about 22% less per hour than male graduates, with implications for career prospects and UK productivity.Significantly, women earn about 10% less than men even before they have children. The gap increases rapidly for many women after they have children. Twenty years after the birth of their first child, a woman’s hourly wage will on average be a third lower than the hourly wage of a man with a similar level of education.

'Remarkable' that part-time work limits pay progression

Monica Costa Dias, IFS associate director and an author of the report, said: “There are many likely reasons for persistent gaps in the wages of men and women which research is still investigating, but the fact that working part-time has a long-term depressing effect is an important contributing factor. “It is remarkable that periods spent in part-time work lead to virtually no wage progression at all. It should be a priority for governments and others to understand the reasons for this. Addressing it would have the potential to narrow the gender wage gap significantly.” Robert Joyce, IFS associate director and another author of the report, said: “There has been a substantial fall in the gap between the earnings of lower-educated men and women over the last 25 years.“However, there has been no fall at all in the gap for graduates. Traditionally, it has been lower-educated women whose wages were especially low relative to similarly educated men.“It is now the highest-educated women whose wages are the furthest behind their male counterparts – and this is particularly related to the fact that they lose out so badly from working part-time.”
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