The UK does not have a gender pay gap

The Institute for Fiscal Studies has a report out insisting that the gender pay gap in the UK hasn’t changed at all. Or, rather, once we take out the education factor it hasn’t changed. We on the other hand, and correctly, insist that the UK doesn’t have a gender pay gap at all:

But there has been no similar progress for graduates for whom the gap in hourly wages has not shifted at all.

This means "barely any change" to the gender earnings gap, the IFS said.

In the report itself the more subtle points are:

Gender gaps in pay, paid work and unpaid work have substantial consequences for inequalities in material living standards. Women in single-adult families, especially single mothers, are especially vulnerable to poverty. Women in opposite-gender couple families have been found to consume less than their male partners.

 Inequalities in earnings and its three components increase vastly after parenthood. The opening of gaps around childbirth suggests that unpaid care work is central in shaping inequalities in the labour market.

 The gendered roles that mothers and fathers take on appear to be largely unrelated to their relative earnings potential. Even mothers who earn more than their male partners before childbirth are more likely than their partners to reduce hours of work in the years after childbirth.

What we actually have is a child pay gap, possibly a motherhood pay gap.

As we’ve pointed out many times before mothers - all else being equal - earn less than non-mothers, fathers earn more than non-fathers. That in a sexually dimorphic species the gendered reaction to the arrival of children differs does not surprise us.

This leaves the question of what, if anything, should be done about it?

Norms, preferences and beliefs appear central to the choices of families. Two-fifths of both men and women in the UK agree that ‘a woman should stay at home when she has children under school age’. Internationally, there is huge variation in the proportion of the population who hold traditional gender attitudes. The extent of agreement with such statements is strongly positively correlated with gender gaps in labour market outcomes.

 However, these constructs are not immutable. An accumulation of policies consistently supporting a more equal sharing of responsibilities between parents (or large policy reforms challenging gender roles) may help build up a change in attitudes that leads to permanent change in norms. Given the huge economic costs associated with the status quo, even expensive policies could potentially pay for themselves if they successfully ensure that the talents of both women and men are put to their most productive uses, whether in the labour market or at home.

The clash here is between the two meanings of “liberal”. The modern - and we insist wrong - meaning appears to be equal outcomes at the population level. The correct meaning is that older, classical, one of equal ability to maximise personal utility. You know, this idea of freedom and liberty to live life as one wants?

The claim being made there is that the population must change its ways to meet that desire for equal outcomes.

We agree entirely that if there were an equal number of househusbands to housewives then that disparity of outcome at that population level would disappear and those outcomes would be, at the population level, equal.

The thing is, well, what if the individual folks don’t in fact want to do that? What if sexual dimorphism means that this outcome is not in fact utility maximising?

There’s really only one way to find out, isn’t there? Have that potential equality, as we already largely do, that equality of choices, and see what happens. Our bet is around and about what currently does but we’re willing to be proven wrong. The idea that the population must be forced into some - by revealed preference - undesired manner of living their lives seems most illiberal to us. Even if it is an attempt to meet that modern liberal goal of equality of outcome.