Unpacking Unequal Pay at Mid-Life: Evidence from the British Cohort Studies

Abstract

The gap between men’s and women’s hourly pay in the UK has diminished over time, while peaking in mid-life for successive cohorts. Does this peak adjusted for gender differences in individual and job characteristics signify a female pay penalty? Is any penalty confined to mothers? We compare employees in two British Birth Cohorts (NCDS and BCS70) aged 42 in 2000 and 2012. Components of the pay gap, derived from regressions of male and female pay, are constructed using Oaxaca’s method. Women’s education and experience gains helped narrow the later pay gap, but an unexplained component remained, even after allowing for job characteristics. The unexplained gap was not confined to parents, though wider than for others. Mothers gained little from prior experience in part-time work and faced low pay in current part-time jobs in particular occupations. Results suggest policies should address women’s low bargaining power generally besides targeting mothers’ low pay.