In this piece, Professor Vicky Pryce, Centre for Economics and Business Research (CEBR), discusses the sources of gender inequality in the UK’s economy, as well as the policy measures needed to address them.
Research and a proliferation of books, including mine, highlight that women, society and the economy suffer because of gender inequality.
Gender equality economics is now mainstream Economics
The recent Nobel Prize awarded to Claudia Goldin underlines that free markets aren’t efficient when it comes to gender.
Motherhood isn’t the only reason for gender inequality but it does count for a large percentage of the pay gap, just under 8% for full time employees and 14.3% for all employees, including part-time in the UK. According to the IFS, the gap starts to rise to reach 21% in the 12 years after the birth of a first child. Three quarters of mothers report discrimination due to pregnancy. Availability for dependents reduces mobility and economic opportunities. It dumps domestic chores on women and means employers can offer them lower wages. Significantly, covid and lockdowns put greater stress on mothers, who were more likely to quit or reduce hours, also affecting pensions. DWP data shows women aged 55-59 have an average private pension worth £95k compared to men’s £145k, and pension tax relief favours higher earners, where women are fewer. Unfreezing lifetime pension allowances will widen this gap. And Bupa research showed that almost 1m women quit jobs because of menopause. At least the law now allows topping up for a full state pension.
Women working part time end up, on average, working at least one level below their skills level, with 38% of women working part-time versus just 14% of men, and being paid one third less during their working life than men. Concentrated in lower paid occupations such as teaching, nursing and social care, and office admin, even here women remain underrepresented at the top. The gender pay gap in education is 22% and in health care and social work some 14%.
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