Concetta Gigante, PhD candidate in Economics at the University of Liverpool, explores the impact of pay transparency policies and how geographies shape the UK’s gender wage gap.
In the United Kingdom (UK) the workforce gender wage gap has been decreasing, with Office for National Statistics (ONS) estimates suggesting a 25 percent reduction between women and men over the last decade. However, we cannot be complacent, as considerable wage inequalities still persist.
A deeper understanding of the structural and spatial forces behind the gender wage gap is required to address these wage disparities between women and men.
My latest research offers a comprehensive geographical analysis of the workforce wage gap across vertical and horizontal segregation. This means I consider the concentration of women and men across and within jobs at different positions of the job distribution and the dominance of one gender in a given sector, respectively. I also look at differences across regions and labour market transformations and the drivers of structural inequality in the gender wage gap.
This work is also the first study on the effects of the Gender Wage Gap Reporting Policy in the UK through spatial lenses using quasi-experimental methods.
What is the Gender Wage Gap Reporting Policy?
The UK provides a distinctive case for studying the geographical workforce wage gap between genders. This is because of the introduction of the Gender Wage Gap Reporting Policy and the UK’s diverse regional economies.
In 2017 the UK Government introduced the Gender Wage Gap Reporting Policy as part of the Equality Act 2010 (Specific Duties and Public Authorities) Regulation 2017. This policy established a mandatory requirement for firms with 250 or more employees to report information on female and male wages over a list of 14 metrics; for example, the difference in means of the hourly wage between women and men relative to the mean hourly wage of men.
The institutional framework provided by this regulation gave me a unique opportunity to evaluate the impact of pay transparency policies on the gender wage gap. As such, my analysis sheds lights not only on regional inequalities but also on structural and spatial dynamics of regional economies, where policies need a coordinated approach to reduce wage inequality and close the workforce wage gap.
What is the current state of the workforce wage gap?
To investigate the UK workforce wage gap I used data from the Labour Force Survey over the period 2003 (quarter 3) to 2024 (quarter 4) for its rich data on variables such as wages, employment, industry sectors and occupation, all in a longitudinal structure with more than 1 million observations.
By documenting the workforce wage gap and its drivers across UK geographical regions, my evidence suggests that over all the industries and occupations considered the workforce wage gap has declined over time. Yet, as of 2024, women still earn on average 17 percent less than men in aggregate terms.
This figure changes drastically when narrowed over occupations and industries. The occupation of skilled trades shows the highest gender wage gap of 24 percent, whereas the gap in professional occupation wages has actually been increasing over time, reaching 17 percent in 2024. By contrast, less variation over time in the gender wage gap is evident in the industry of public administration, education and health.
I find that the workforce wage gap in space varies significantly across regions, with a clear divide between the North and the South of the UK. The South East, the South West and the East of England are the regions with the highest workforce wage gap, with an average of 24.57 percent, while the lowest gap is present in Northern Ireland and Wales at 11.2 and 16.5 percent, respectively.
The gender wage gap in full time employment has been steadily declining over time, whereas I find that in part time jobs the gap has been increasing over the last decade. Moreover, the gender wage gap in flexible and non-flexible jobs declined since 2003 by approximately 38.10 and 41.18 percent, respectively.
Analysing wage inequality within each group of females and males, the evidence highlights that inequality in female wages tend to be lower than inequality in male wages. In 2024 the region with the highest rate of wage inequality within each group, computed through the Gini coefficient, is the South East standing at 28.9 (female) and 30.8 (male) percent.
My study highlights that the workforce wage gap is not only the result of individual circumstances in the labour market between women and men but can be part of the factors leading to structural inequalities. By identifying the drivers of the gender wage gap in a longitudinal dimension, these findings identified a very unequal distribution of the gender wage gap in space across UK geographical regions.
What do the findings reveal about the effectiveness of the Gender Wage Gap Reporting Policy?
The Equality Act 2010 (Specific Duties and Public Authorities) Regulation 2017 has mandated transparency in pay through the Gender Wage Gap Reporting Policy. My findings reveal an increase of the gender wage gap in the first three years after the policy implementation. A decay is observed only after three years post-policy, with an estimated overall effect of the policy of 2.32 percent on the gender wage gap.
My findings also reveal a statistically significant reduction of the workforce wage gap given an increase in the hours of female in full time employment and the years of experience. Studying this from a different perspective I can evaluate whether the presence of the gender wage gap has an effect on the probability of female workers in taking full time employment. I estimate a statistically significant decline of this probability in a remarkable percentage of between 17.3 and 68.7 percent.
The Gender Wage Gap Reporting Policy has increased transparency but has not yet eliminated structural inequality in wages. Addressing the gender wage gap is both a matter of fairness and of economic efficiency and socially inclusive growth.
To know more about this study you can read my working paper.
Why do these findings matter?
This study provides the first empirical evidence of the impact of the Equality Act 2010 (Specific Duties and Public Authorities) Regulation 2017 on the workforce wage gap in the UK to show how institutional interventions shape the gender wage gap.
The findings demonstrate that tackling the gender wage gap requires a coordinated approach between policy interventions and cultural change initiatives, particularly tailored to address regional disparities, and vertical and horizontal segregation. By studying the geography of the gender wage gap, this research underscores that wage gaps are a product of the jobs, the places and the structures that shape our opportunities, as well as due to the labour market we are placed in.
More research on the workforce wage gap is vital to enhance our understanding on workers’ productivity and economic growth. To this aim, I embedded the current evidence in a macroeconomic model of the gender wage gap within a richer data structure. This allows me to strengthen the current evidence and to quantify the effects of pay transparency policies, in particular the Equality Act 2010 (Specific Duties and Public Authorities) Regulation 2017, on workers’ productivity and economic growth.
About the author
Concetta Gigante is PhD Candidate in Economics at the University of Liverpool funded by the UKRI ESRC.
Concetta’s research interests include questions related to macroeconomics, labour market inequalities, unemployment, workers’ productivity, economic growth and public economics. Her PhD examines banks’ regulations in macroeconomic models and she is currently extending this research on the workforce wage gap into a macroeconomic model.
To find out more about Concetta’s research, connect with her on LinkedIn and follow her on Bluesky.
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