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Analysis the Components of the Gender Pay Gap in the UK: What are the Main Components of the Gender Pay Gap, and to What Extent do they Contribute to this Inequality? (2010)

What is the size of the gender pay gap in the UK? What are the main components which contribute to this gap? There have been various changes in gender relations and labour market structure, all of which have affected the pay gap. Increase in women’s educational attainment, anti-discrimination legislation and changes in women’s attitudes towards work have all caused the gap to narrow in recent years.

The Oaxaca decomposition of the gender pay gap distinguishes between components that attribute to gender differences in productivity related characteristics and a residual component which is normally recognised as discrimination. This study of data from the 2010 British labour survey shows there is a gender pay gap of approximately 14.8% of which much is attributed to uneven distribution of sexes in occupational and industrial sectors.

However it is concluded that it is misleading to assume occupational and industrial sectors as productivity-related characteristics, nonetheless they are components which contribute to the overall gender pay gap.

Over the last thirty years, the full time pay gap has narrowed markedly while there has only been a slender reduction in the part-time pay gap. The introduction of the Equal pay act in 1975 has helped to reduce this inequality and today the pay gap stands at 18.4 percent compared to a much more substantial 30 percent before the act was introduced. Part of the gap can be explained by differences in the observed characteristics of both genders, such as education and experience. However, even once taking into account these factors affecting productivity a significant gap is left unexplained. This unexplained gap derives from either employer discrimination or non-observed productivity differential.

This dissertation will initially begin with of a brief history of the gender pay gap in the UK and then go on to explain the factors which contribute to the gap such as human capital endowments and discrimination. Following this there will be a review of previous literature, description of the data and variables which are to be used for econometric analysis followed by the analysis and empirical findings of my study. Conclusions will be presented in the final section.


  • 12,000 words – 60 pages in length
  • Excellent use of literature
  • Excellent use of economics and data analysis models: Oaxaca Decomposition, Multi Collinearity, Chow Test, Ramsey RESET, Jarque Bera and Hetroskedasticity
  • Well written throughout
  • Ideal for any Economics student

1. Introduction

2. Background and Stylised Facts

3. Theoretical Background
Supply-side factors
Demand-side factors
Occupational segregation
Discrimination

4. Literature Review
Human capital
Social reproduction
Monophony and Firm size
Compensating wage differentials and part-time work
Occupational segregation
Discrimination

5. Data and Findings
Sample selection issues

6. Variables and Hypotheses
Dependent variable
Explanatory variables
Employment
Labour market and industry
Occupational segregation
Household and Demographics
Female and Female interaction variables

7. Methodology
OLS-Regression and its limitations
Criticisms of the Oaxaca-Blinder decomposition

8. Econometric Results and Analysis
Regression Overview
Decomposition overview
Findings for individual variables

9. Conclusion

Bibliography

Appendices

Gender Pay Gap UK Economics Dissertation
Gender Pay Gap UK Economics Dissertation

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