Closing the gender gap

Despite many advances in women’s rights and gender equality, women in employment continue to pay a high price for starting a family. Taxes, steep childcare costs, and lack of availability or access to such facilities force many into part-time work when they would ideally like to be working full-time.

Pay inequalities

According to a recent report by the Organisation for Economic Co-operation and Development (OECD), women have made great strides in terms of educational opportunities and attainment, which has helped them to participate more in the labour market. However, women still face a number of inequalities in areas such as working hours, conditions of employment and earnings.

The report shows that men earn on average 16% more than women in similar full-time jobs in OECD countries. At the top of the pay scale, the gender pay gap is even higher (21%), which suggests the continued existence of a ‘glass ceiling’ preventing women from achieving true equality.

Higher pay gap for women with children

The gender pay gap is highest for women who have children. OECD figures show that a woman with no children faces a pay gap of 7% on average, whereas for a woman with one or more children this figure rises to 22%.

"Closing the gender gap must be a central part of any strategy to create more sustainable economies and inclusive societies,” said OECD Secretary-General Angel Gurría. “The world’s population is ageing and this challenge can only be mastered if all the talent available is mobilised.”

“Governments should make further progress in the access and quality of education for all, improve tax and benefits systems, and make childcare more affordable, in order to help women contribute more to economic growth and a fairer society," Gurría continued.

The UK position

OECD figures show that around 70% of UK women are now employed or actively seeking work. However, 40% of female employment in the UK continues to be part-time, with the high cost of childcare preventing many mothers from being able to work full-time. This barrier to full-time work is one of the main contributors to the gender pay gap in the UK, which currently sits at 18% in relation to median earnings.

The existence of a gender pay gap in the UK has been further supported by recent research from the Institute for Public Policy Research (IPPR), which found that having children still has a significant impact on the wages of parents.

The study found however, that in addition to the negative impacts on a woman’s pay and career prospects, having a child can further add to the gender pay gap by creating a ‘fatherhood pay bonus’. Men who were fathers were found to be earning significantly more by the age of 40 than men without children.

Researchers suggest a number of possible reasons for this, including:

• men increase their earning capacity when they become fathers because they feel a greater responsibility to breadwinning for the family, or
• fatherhood is valued by some employers because of the perceived loyalty it may bring and is therefore rewarded.

The OECD would like to see the UK Government do more to enable women, and mothers in particular, to increase their working hours. An effective starting point would be the introduction of more affordable high-quality childcare provision.

As well as helping to eradicate the gender pay gap, increasing the number of hours worked by women would also provide a boost to the economy, says the OECD.

Impact of pay inequality

Experiencing pay inequality can be the cause of major detriment for women, not just during their career, but for the rest of their lives, claims the OECD.

Despite having carried out a great deal of unpaid work at home, the fact that women have worked fewer hours in paid employment will mean they have lower pension savings, and therefore a smaller pension on retirement. According to the OECD, women live on average six years longer than men, but women aged over 65 are one and a half times more likely to live in poverty than men of a similar age.