Something in the way she moves: a fresh look at an old gap

In this paper, we propose a new decomposition as a useful complement to traditional methods of explaining the gender pay gap and the pay gap between full-time and part-time women. We decompose average earnings into the contribution of the average starting wage for workers entering paid work from non-employment, average wage growth for those in continuous employment, and the fraction of workers entering employment. We use this to inform discussion of the pay gap, first, between men and women and, second, between full-time and part-time women. Comparing men and women using data drawn from the British Household Panel Survey, we find no significant differences in wage growth whilst in continuous employment: the source of the gender pay gap comes from the entrant pay gap and the share of entrants. The study of longer-run changes leads us to expect a modest further narrowing of this gap. Comparisons of full- and part-time women indicate no difference in entry pay shares and little difference in wage growth. The bulk of the full- to part-time gap is explained in terms of the fact that women working part-time are much more likely to be entrants to the labour market.