Tuesday, October 21, 2008

UK Pay Gap Based on Personal Lifestyle Choices: Like Marriage and Motherhood

The UK's Institute of Economics Affairs has released a new study "Should We Mind the Gap? Gender Pay Differentials and Public Policy" (full study here, press release here, newspaper report here).

Professor John Shackleton, of the University of East London, who led the report, said in reality the pay gap hardly existed for workers under 30.

"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," said the report.

He said men work longer hours in more dangerous jobs and face a greater risk of being sacked, while women who take career breaks outnumber their male equivalents by more than five to one.

"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."

MP: The table above from the report is very enlightening:

1. For unmarried, single workers there is NO "pay gap," and in fact women make 1.1% MORE than men in the U.K. (median wage of £8.82 per hour for females vs. £8.72 for men), so there is actually a pay gap for men!

2. For the overall population of U.K. workers, without even controlling for relevant factors like hours worked, career choices, etc., quite a bit of the "pay gap" can be explained by just two factors, both of which relate to voluntary and personal lifestyle choices: marriage and motherhood (see table above).

3. The pay gap increases as the number of children increases, and is highest for married workers with 4 children.


At 10/21/2008 11:23 AM, Anonymous Anonymous said...

Let me echo my criticism from your lost post on this subject.

Your reference point is ridiculous. Absolutely ridiculous.

You're claiming that we're saving hundreds of billions of dollars a year while the price of gas right now is still higher than it was a year ago!

At 10/21/2008 12:36 PM, Anonymous Anonymous said...

Not quite, nobrainer. The reference point was gas's high point over the summer, when we were told that "the era of cheap gas is over." Yes, it is not literally "savings." But, that is the amount that we won't now have to spend on gasoline had the peak continued, as many people thought.

At 10/21/2008 1:24 PM, Anonymous Anonymous said...

Try telling this to Obama supporters, who will probably tell you that McCain hates women because he dared point out this very basic fact.

Obama even has this "pay gap" posted on his website as "evidence" that the evil white man is "discriminating" against women. It's disgusting.

At 10/21/2008 2:35 PM, Blogger like such as said...

Alex -


At 10/21/2008 4:36 PM, Anonymous Anonymous said...

Yeah, I saw something about that the other day. Reality is in his own office, and yet it doesn't stop him from demogoguing the issue on his website and on television advertisements, implying that McCain hates women.

At 10/22/2008 6:37 PM, Anonymous Anonymous said...

Since when is "single" a "lifestyle choice"?

"Single" is to a large extent driven by age (i.e. youth). And it's well known that younger workers are typically lower on the earnings curve than older workers.


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