Inequality: Evaluating The Gender Pay Gap

What Is It?

The Gender Pay Gap (GPG) represents the difference between the median – or mid-point – earnings of men and women in a workforce in any given year. In basic terms it’s a comparison of the middle hourly earnings of all men and all women in a given workforce, such as Britain or America.

What It’s Not…

It’s not a comparison of male and female mean earnings – the total earnings of all men and all women divided by the number of men and women in the workforce. This is an average that’s easily distorted by economic outliers such as a much higher proportion of men in very highly-paid roles (such as company CEO’s or Investment Bankers) and a much higher proportion of women in relatively lower-paid roles (such as cleaners, retail assistants and care workers)

It’s also not a comparison of the relative levels of male – female pay for the same job (do female Investment Bankers or Care Workers get the same rate of pay as their male counterparts?)

What It Is…

It’s a broad (macro-economic) measure of the extent of structural social and economic inequalities in the way pay is distributed throughout an economy. As such, it allows us to track changes over time in the relative value of male and female labour. For example, over the past 50 years in Britain the GPG has declined significantly in response to a wide range of political, economic and cultural changes (that, in another context, you might want to explore at some point):

In 1975 the GPG was around 30 – 40% in favour of male workers.

By the mid-nineties the gap, although still substantial, had closed to between 20 – 25%.

In the early 2000’s the gap closed slightly to 15 – 19%

By 2020 the gap had closed to around 9% (for full-time employees). If part-time employment – something predominantly carried-out by women – is included the gap was around 17%.

Further changes in subsequent years has seen the GPG narrow to 7.5% in 2023 and 7% in 2024.

Or Maybe Not…

A recent study by Forth et al (2025) has placed a question mark over the validity of the statistical analysis used to calculate the Gender Pay Gap and, in particular, the representativeness of the sampling on which it’s calculation is based.

The main issue, according to Forth et al, is that “an annual sample 1% of employee jobs” designed to be representative in terms of gender, age, occupation, and region has tended to “under-represent jobs in small, young, private-sector organisations”. The upshot of this, the authors argue, is that the Office for National Statistics (ONS) “has been consistently under-estimating the UK GPG over the last 20 years, by a small but noteworthy margin of around 1%”.

Which, in the greater scheme of income inequality isn’t that much. Unless you’re the victim of such inequality.

But Then Again…

If you’re looking to impress an examiner with your ability to dig beneath the surface of social statistics to evaluate the things that most students simply take for granted, then maybe you could be on to something…

References

John Forth, Alex Bryson, Van Phan, Felix Ritchie, Carl Singleton, Lucy Stokes and Damian Whittard (2025) :“The Representativeness of the Annual Survey of Hours and Earnings and Its Implications for UK Wage Policy”

Kalyeena Makortoff (2025) “UK gender pay gap underestimated for two decades, report says”: The Guardian