06 February 2018
Part-time workers see virtually no hourly wage progression and, as women account for most people on reduced hours, this is a significant driver behind the persistence of the gender pay gap.
This is according to new research released by the Institute of Fiscal Studies (IFS) and the Joseph Rowntree Foundation, which found that the almost complete lack of pay rises for women in part time work accounted for a quarter of the gender pay gap among mothers.
Women of a higher level of education are especially hard hit because graduates have a higher earning potential and could be expected to receive much more generous wage increases if they were in full-time work.
The authors argue that this is why the gender pay gap is now widest among women with higher levels of education – female graduates take home 22% less than men – while women with a lower level of education have seen the pay gap close from 28% to 18% since the early 1990s.
Further, mothers are at particular risk of losing potential earnings because many women decide to reduce their hours when they have children. By the time a woman’s first child has reached the age of 20, she takes home and average of 30% less per hour than fathers of a similar education level.
The loss in wage progression among part-time workers was significantly more important in explaining the wage gap among parents than the fact mothers are more likely to take time out of the labour force, which was estimated to account for around 10% of the disparity.
“It is remarkable that periods spent in part-time work lead to virtually no wage progression at all,” Monica Costa Dias, author of the report and Associate Director of the IFS said. “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.”
However, the report also revealed that part-time working cannot account for all of the gender pay gap, with female graduates earning 10% less than their male counterparts even before they have children.