In our latest post, Professor Melanie Jones and Dr Ezgi Kaya reflect on their new IZA discussion paper on the gender pay gap in Northern Ireland.
Headline figures from the UK Office for National Statistics show that the gender pay gap in Northern Ireland is far narrower than in the rest of the UK. Our analysis focuses on understanding and explaining the reasons for this surprising difference given the relatively similar social, economic and policy environment.
Using information from a recent large-scale survey which collects comparable information across UK households we find that the mean gender pay gap for full-time employees in Northern Ireland, at 5 per cent, is about a third of the corresponding 16 per cent gap in the rest of the UK, and is narrower than in all other UK regions.
We find that other individual characteristics such as education, and job-related characteristics such as occupation, are key in explaining the narrower gender pay gap in Northern Ireland. That is, relative to men, women hold higher qualifications and work in higher-paying occupations, which narrow the gender pay gap.
Importantly, there is no evidence that the influence of gender pay inequality, measured after accounting for differences in these characteristics, differs between Northern Ireland and the rest of the UK. As such, the findings reinforce the critical distinction between the gender pay gap and pay equality, particularly important in the UK policy context where firms are required to report only their gender pay gap.
“The message from analysis of Northern Ireland is clear; the narrow gender pay gap does not provide evidence of an absence of pay inequality.”
Our analysis highlights the particular importance of occupation. The gender pay gap in Northern Ireland is lower than the rest of the UK both as a result of women being relatively more concentrated in higher-paying occupations in Northern Ireland and because the earnings associated with different occupations in Northern Ireland benefit women relative to men.
That the gap between the highest and lowest earners in Northern Ireland is narrower than the rest of the UK also acts to benefit women and has a further narrowing effect on the gender pay gap.
Our analysis, therefore, highlights that, despite the more similar policy and social context, factors well-established to influence the gender pay gap internationally also have an important role in generating dramatic variation within the UK.
Also, in November last year, we wrote a piece for this blog on the Gender Pay Gap in the UK Public Sector.
Melanie Jones is Professor of Economics at Cardiff Business School.
Dr Ezgi Kaya is a Lecturer in Economics at Cardiff Business School.