ONS: large proportion of UK gender pay gap cannot be explained by age or occupation

"Differences in characteristics" between men and women can be used to explain only 36.1% of the difference between men's and women's hourly pay, according to a new report by the Office of National Statistics (ONS). However, the official data on which the report was based does not track factors such as childcare and other caring commitments, career breaks or level of education.

"The analysis would benefit from information on family structures, education and career breaks; without these the unexplained element is over-stated," the ONS said in its report.

"Factors such as the number of children, the age of children, whether parents have any caring responsibilities, the number of years spent in school and the highest level of qualification achieved are likely to improve the estimation of men's and women's pay structures and consequently decrease the unexplained element of the pay gap. As a result, the unexplained element should not be interpreted as a measure of discriminatory behaviour, though it is possible that this plays a part," it said.

Of the characteristics tracked by the data, occupation had the largest effect, as it explained 23% of the difference between men's and women's hourly pay. A further 9.1% could be explained by differences in working patterns, such as men being more likely to work in full-time jobs which tend to pay more than part-time jobs, the ONS said.

"In other words, if women had the same returns to these characteristics as men and with all other factors held constant, women would still earn less on average than men because fewer women work in the highest-paying occupations and in full-time jobs," it said.

The gap between the average hourly earnings of men and women working full-time has fallen from 10.5% in 2011 to 9.1% in 2017, but remains in favour of men, according to the ONS. This figure is based on the ONS' annual survey of hours and earnings (ASHE) data. Average hourly pay for both men and women who work full-time is higher than for those who work part-time, and men are proportionally more likely to work full-time than women.

The gender pay gap for all workers, whether full or part time, increased slightly last year, from 18.2% to 18.4%, according to the ONS. However, this is part of a wider downward trend, and is driven by an increase in the proportion of employees working full-time versus part-time over this period.

The ONS data shows the pay gap widening in older age groups, for both full and part-time workers. This "may capture the differential impact of taking time out of the labour market", for example women taking time out to have children. Occupations employing more men demonstrated larger gender pay gaps, while those with "almost equal employment shares between men and women" had the smallest gender pay gaps, according to the ONS.

The age at which women's wages tend to stop growing is lower than that of men, according to the data. Men's wages stopped growing at 48, at which point they were 65.8% higher than at age 16, while women's wages stopped growing at age 45, having increased by 50.4% compared to at age 16. The gap between full-time workers' hourly wages reached its peak between ages 50 and 59, according to the data.

All public sector employers, and private and voluntary sector employers with 250 employees or more, will have to publish gender pay gap data by 4 April under new government regulations. Among the 600 or so employers that have reported to date, and that have provided additional contextualising information, many have suggested that their gender pay gap is due to fewer women in senior management roles compared to lower-paid administrative and similar roles; or historical cultural issues such as fewer women applying for roles at firms operating in particular sectors.

Private and voluntary sector employers subject to the new reporting duty are required to publish annually their overall mean and median pay gaps based on gross hourly pay for men and women, expressed as a percentage; as well as their mean and median gender bonus gaps. They must also publish the proportion of male and female employees within each quartile of their pay distribution, ordered from lowest to highest pay, as well as the proportion of both men and women that have been paid a bonus in the preceding 12 month period.