The male wage premium

Wage inequality between men and women has split opinion in the UK after the Government last week announced that all large firms would have to publish the gap in average earnings between their male and female employees. In light of that debate, today’s HESA data on the pay of recent graduates is interesting. It shows that female graduates are slightly more likely than male graduates to be in work a year after graduating, but they earn considerably less.

Of course, that’s not necessarily a causal link and Ben Southwood rightly pointed out that, in the US, similar results are due to differences in the subjects that male and female students study. However, that doesn’t appear to be the case in the UK:

These correlations aren’t in any way conclusive, but they’re hardly reassuring for people who think the wage gap between men and women has been eliminated. Importantly, it’s only through transparent discussion of these outcomes and the possible mechanisms that we will overcome the societal problems that caused the wage gap. Avoid those questions by opposing pay transparency will not make the problem go away, nor silence the critics.

  • One thing I hate is how employers pressure employees not to talk to each other about pay rates. Back in the days of fixed ( and published) pay scales this was all transparent. Now the relationship is asymmetric and open to forms of abuse including gender discrimination.

    • I’m a big fan of pay transparency, too, but I wonder if it’s a bit of a prisoner’s dilemma? After all, it helps your bargaining to know the salary of others but it’s probably best for you of others don’t have the same bargaining strength.

    • I’m a big fan of pay transparency, too, but I wonder if it’s a bit of a prisoner’s dilemma? After all, it helps your bargaining to know the salary of others but it’s probably best for you of others don’t have the same bargaining strength.