The IFS, run by Paul Johnson, said research showed the gender pay gap is fuelled by women being more likely to work part time after starting a family
The gender pay gap is fuelled by women being more likely to work part time after starting a family, the Institute for Fiscal Studies said today.
The economics think tank said part time work was associated with ‘little or no’ pay growth on the eve of new rules forcing many firms to reveal salary data.
From tomorrow, all employers with more than 250 staff must publish reports on the gap between average earnings of male and female staff.
More than 1,000 included companies have not yet done so with just hours until the deadline.
The data will fuel debate about whether and why there is still a gender pay gap in Britain despite the passing of equalities legislation.
The IFS said its research showed that while there were several factors behind the wage cap, having children is a major factor in why some women’s pay falls behind.
It said: ‘The research also shows that some, but not all, of the gender wage gap is explained by the fact that after having children women are much more likely than men to work part-time, and part-time work is associated with little or no subsequent progression in hourly wages.
‘This is particularly important for graduates for whom full-time experience typically delivers considerable wage growth.’
The IFS praised the Government for demanding firms publish data about hourly earnings rather than annual pay.
This is because annualised figures would exaggerate losses faced by part time workers even if there was little or no difference in hourly pay.
But warning child care was not the only factor, the think tank added: ‘The cause of – and therefore the appropriate response by policymakers to – this part of the gender wage gap could be very different to, for example, the part of the gender wage gap that exists prior to the arrival of a first child.’
Data published so far on the median gender pay gap reveals 79 per cent of firms pay men more than women
In some cases a large pay gap is not surprising, it added.
The IFS said: ‘For example five organisations are currently reporting that their mean gender wage gap is 80 percentage points or more larger than their median gender wage gap and all five are English Premier League football clubs.’
By Wednesday an estimated 9,000 companies and public bodies with 250 employees or more must have submitted their median and mean gender pay gap data to the Government Equalities Office.
As of 10am today, figures show that just 7,590 have done so, with 79 per cent of those having a pay gap.
The rest of the employers either have no median gender pay gap (8 per cent) or one in favour of women (13 per cent).
Companies who do not provide their figures could face legal action including court orders and fines.
The gender pay gap is calculated as the difference between the average salaries of men and women – it is not the same as equal pay, where firms are required to pay people doing the same job the same salary regardless of gender.
The national median gender pay gap is 18.4 per cent.
Home Secretary Amber Rudd is overseeing the roll out of the new reporting rules