These are the slides presented at the ESWG Gender Pay Gap Seminar on Wednesday 23 June 2021.

1. ESWG Seminar – Gender Pay Gap
23 June 2021 slido#57800

2. ESWG Seminar – Gender Pay Gap
ESWG, Professor of Econometric Theory and Economic Statistics,
Cambridge University
Welcome – Richard Smith
23 June 2021 slido#578002021

3. Opening remarks
Professor of Economics and Labour Market Diversity, York University
Karen Mumford
23 June 2021 slido#578002021

4. Agenda
14:00 – 14:05 Welcome – Richard Smith, ESWG, Professor of Econometric Theory
and Economic Statistics, Cambridge University
14:05 – 14:10 Opening remarks – Karen Mumford, Professor of Economics and Labour Market Diversity,
York University
14:10 – 14:30 Measuring the Gender Pay Gap using ONS survey data – Nicola White, Head of
Earnings, ONS
14:30 – 14:50 Gender Pay Gap over time and space – Judith Shapiro, LSE
14:50 – 15:10 How can we turn pay gap statistics into actionable data for employers especially HR staff
with little or no stats skills? - Nigel Marriott, Independent Statistician
15:10 – 15:25 Panel discussion
15:25 – 15:30 Closing remarks – Karen Mumford, Professor of Economics and Labour Market Diversity,
York University
slido #57800

5. Questions can be submitted via the slido app using code #57800.
You can also access slido via the link in the chat box.
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6. Measuring the Gender
Pay Gap using ONS
survey data
Nicola White
Head of Earnings, Office for National Statistics
23 June 2021 Gender Pay Gap slido#578002021

7. Overview of ASHE
• The Annual Survey of Hours and Earnings is the most comprehensive source of earnings
information in the UK.
• ASHE provides information about the levels, distribution and make-up of earnings and hours paid
for employees. It provides data by industry, occupation, sector, age and geography, from UK-level
down to local authority and parliamentary constituency.
• ASHE and the New Earnings Survey, which preceded it, have been collected every year since 1970
allowing for comparison over time.
• ASHE is based on a 1% sample of employee jobs taken from HMRC’s PAYE records.
Consequently, individuals with more than one job may appear in the sample more than once.
• ASHE produces annual publications on three key topics: Employee earnings, Low and high pay
and the Gender pay gap.
Gender Pay Gap slido #57800

8. How ONS calculate the gender pay gap
• ONS’ headline measure of the gender pay gap is the difference between median gross hourly earnings (excl. overtime) of
men and women as a proportion of median gross hourly earnings (excl. overtime) for men:
𝑚𝑒𝑑𝑖𝑎𝑛 𝑔𝑟𝑜𝑠𝑠 ℎ𝑜𝑢𝑟𝑙𝑦 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑒𝑥𝑐𝑙. 𝑜𝑣𝑒𝑟𝑡𝑖𝑚𝑒 𝑓𝑜𝑟 𝒎𝒆𝒏 − 𝑚𝑒𝑑𝑖𝑎𝑛 𝑔𝑟𝑜𝑠𝑠 ℎ𝑜𝑢𝑟𝑙𝑦 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑒𝑥𝑐𝑙. 𝑜𝑣𝑒𝑟𝑡𝑖𝑚𝑒 𝑓𝑜𝑟 𝒘𝒐𝒎𝒆𝒏
𝑚𝑒𝑑𝑖𝑎𝑛 𝑔𝑟𝑜𝑠𝑠 ℎ𝑜𝑢𝑟𝑙𝑦 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑒𝑥𝑐𝑙. 𝑜𝑣𝑒𝑟𝑡𝑖𝑚𝑒 𝑓𝑜𝑟 𝒎𝒆𝒏
• E.g., a 10% gender pay gap denotes that women earn 10% less, on average, than men.
• Hourly earnings is used as it better accounts for the fact that men work more hours per week on average than women.
• Overtime is excluded because including it can skew the results given men work relatively more overtime than women on
average.
• The gender pay gap is calculated separately for full-time and part-time employees, as the net effect for all employees can
mask the movements in the two different series.
• Note, this measure does not take into account equal pay for equal work, and does not necessarily mean men and women
are paid differently for the same job.
Gender Pay Gap slido #57800

9. Gender pay gap in 2020
• The gap has continued to close over
the years, but it is still in favour of
men.
• Among full-time employees, the GPG
was 7.4% (down from 9.0% in 2019
and 17.4% in 1997).
• For part-time employees, the GPG
was -2.9% (up from -3.5% in 2019
and 0.6% in 1997).
• For all employees, the GPG was
15.5% (down from 17.4% in 2019 and
27.5% in 1997).
Source: ONS, Annual Survey of Hours and Earnings
Gender Pay Gap slido #57800

10. Gender pay gap in 2020 – region
• The gender pay gap varies
substantially between regions.
• The gender pay gap is higher in every
region of England, than in each of
Northern Ireland, Scotland and Wales.
• Northern Ireland has a negative
gender pay gap. This is in part due to
that a higher proportion of women
work in the public sector, where pay
rates for some jobs are higher than the
private sector.
Source: ONS, Annual Survey of Hours and Earnings
Gender Pay Gap slido #57800

11. Gender pay gap in 2020 – age
• The gender pay gap remained close to zero for
full-time employees aged under 40 years but
was over 10% for older age groups.
• The GPG widens in favour of women for part-
time employees aged 30 to 39. This is likely to
be influenced by the fact that the average age
of first-time mothers is 29 years, who may have
a preference for part-time employment when
rejoining the labour market.
• The GPG for older age groups is positive for
both full-time and part-time employees. This
may capture the differential impact of taking
time out of the labour market, one possible
reason for women taking time out is having
children.
Source: ONS, Annual Survey of Hours and Earnings
Gender Pay Gap slido #57800

12. Further gender pay gap analysis
• The GPG was analysed in more detail and using regression techniques, to provide more insight
into the factors that affect men's and women's pay.
• The model considered age, job tenure, working pattern, occupation, region, business size and
sector as factors, for the 2017 ASHE data.
• Holding all other factors constant, women’s pay growth in respect of age was lower than men’s pay
growth, and also stopped growing at a younger age.
• In terms of occupation, men working in the chief executives and senior official's occupation earn
almost four times more than men in elementary occupations; in the case of women, this is almost
3.5 times more.
• Regarding job tenure, men who have worked for over 20 years in the same organisation earn
20.8% more compared with those men who worked for no longer than one year; for women, pay is
17.5% higher.
Gender Pay Gap slido #57800

13. • The Blinder-Oaxaca decomposition was used
to determine how much the gender pay gap is
explained by the characteristics in the model.
• 36.1% of the difference in men’s and
women’s log hourly pay could be explained
by differences in characteristics between men
and women included in the model:
• Occupation has the largest effect,
which explains 23.0% of the
differences.
• Working pattern explains 9.1% of
differences.
• 63.9% of the gap cannot be explained
by the model. Information on family
structures, caring responsibilities,
education and career breaks would be
beneficial to investigate.
Gender Pay Gap slido #57800

14. Government Gender pay gap reporting
• ONS is not responsible for and does not publish the results of gender pay gap
reporting.
• In 2017, the government introduced mandatory gender pay gap reporting for
employers with 250 or more employees.
• These employers must publish and report figures about the gender pay gap in their
company, using employer payroll data:
• mean and median gender pay gap using hourly pay
• mean and median gender pay gap using bonus pay
• % of men and women in each hourly pay quarter
• % of men and women receiving bonus pay
Gender Pay Gap slido #57800

15. Links and further information
• ASHE gender pay gap bulletin
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bullet
ins/genderpaygapintheuk/2020
• ASHE methodology and guidance
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/meth
odologies/annualsurveyofhoursandearningsashemethodologyandguidance
• Understanding the gender pay gap in the UK (regression analysis):
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articl
es/understandingthegenderpaygapintheuk/2018-01-17
• Decoding the gender pay gap: https://blog.ons.gov.uk/2019/04/16/decoding-the-gender-pay-gap-
how-a-bletchley-park-codebreaker-helped-explain-a-strange-paradox/
• Information on gender pay gap reporting: https://www.gov.uk/government/collections/gender-pay-
gap-reporting
Gender Pay Gap slido #57800

16. The Gender Pay Gap Across Time and Space
Dr Judith Shapiro
j.c.shapiro@lse.ac.uk
j.c.shapiro@lse.ac.uk

17. Main points
Department of Economics
Key points:
• The metric of the “gender pay gap” has been a remarkable success as
persuasive instrument, flawed as policy/welfare/efficiency target..
• A critical flaw is its normally strong inverse relationship with women’s labour
force participation , This is widely recognised but widely underplayed
• .
• Popular misunderstanding that the unadjusted ONS “headline” measure
represents unequal pay for equal work contains the potential for backlash.
• Public understanding of issues is far from easy, given high dimensionality,
time lags in production, even for the raw gap, and often polarised priors
• Surveying the enormous and constantly growing empirical literature ,the
situation is reminiscent of the period when cross-country growth
regressions flourished in development economics…. What follows?
• Unnecessary to say: For the ONS , the challenge is greater and more important:
and short of “going Nordic” will continue to have to be “unsung heroes” ….

18. An initial concern…
 “The Transition in East Germany:
When Is a Ten-Point Fall in the Gender Wage Gap Bad News?
Jennifer Hunt, Journal of Labor Economics, Vol 20, #1
1990 -1994, mean female monthly wages rose from 74% of male to 84%;
But labour force participation rate fell from 83% to 60%, 6 pp more than male.
[Hunt’s analysis points to the exit of low-wage women, and to an overall relative welfare loss for
women. State-of-the-art but no attempt at Heckman correction]
Post-Soviet Russia, with a persistent high gender pay gap (> 30%)
“The low gender gap in employment and the high gender gap in pay
can be argued to go together”
http://conference.iza.org/conference_files/worldb2014/posadas_j6007.pdf

19. More immediately:
Contrast between reports such as ….
“The pandemic has set women’s labor force participation back more than 30 years ”
(https://blog.dol.gov/2021/03/19/5-facts-about-the-state-of-the-gender-pay-gap)
Chief Economist, US Bureau of Labor and other “She-cession” warnings and
And
“Gender pay gap in U.S. held steady in 2020”
“High-earning women haven’t suffered the same level of unemployment,
which will likely help skew the data…the gender pay gap began the year
at 81¢ on the dollar and ended it at 84 cents.”

20. Source: ILOSTAT, mean monthly. full +part-time,
GPG as f (Female/Male Labour Force Participation Rate)
See especially Olivetti and Petrongolo, 2008

21. Source: ILOSTAT, mean monthly. full +part-time,
GPG as f (Female/Male Labour Force Participation Rate)
Add supplementary employme
prominently? (Not a huge Davo

22. Economics
GPG as f (Female/Male Labour Force Participation Rate)
Why not log wages?
Better technically: public understanding?
Should this take a leaf from RSS/Moffitt?
Thanks to Karl Xing, and elsewhere to Melania Kovalenko, Marie Ogino, Dan Carey, Veer Abrol

23. Another problem with excessive salience, headlines enhanced by
Equality Act reporting:
The ONS is scrupulous in insisting always that the “headline gender pay gap” “is a
measure across all jobs in the UK, not of the difference in pay between men and women
for doing the same job. ”
However, with a headline rate, there may well be headlines

24. Eurostat is unclear

25. Equality Act Reporting : First Results
Duchini et al, 2020:
Increases probability women by 5% that women are hired into above median-wage
occupations … not yet translated into a visible and significant increase in women’s
salaries, the policy leads to a 2.8 percent decrease in male real hourly pay, in
treated firms compared to control ones, reducing the pre-policy gender pay gap by
15 percent.
https://warwick.ac.uk/fac/soc/economics/staff/educhini/duchini_simion_turrell_oct_2020_pay_transparency_and_glass_ceiling.pdf
Jack Blundell, 2021:
A 1.6 percentage-point narrowing of the gender pay gap, primarily due to a decline
in male wages.
Most accessible summary: https://blogs.lse.ac.uk/businessreview/2021/03/29/uk-gender-pay-gap-reporting-a-crude-but-effective-policy/

26. 2018: Three publicised studies
Department of Economics
 The Gender Earnings Gap in the Gig Economy: Evidence from over a
Million Rideshare Drivers, Cody et al, RE Studies, 2020.
Reports: Uber gender pay gap of 7% explained by experience,
preferences, eg no airport pickups, and speed.
 Why Do Women Earn Less Than Men? Evidence from Bus and Train
Operators∗ Valentin Bolotnyy Natalia Emanuel (Harvard students)
MBTA, Massachusetts, 11% gap, same idea as above
 Yana Gallen, , Motherhood and the Gender Productivity Gap, Danish
Employee- Employer Data: Becker-Friedman Institute
Lower Productivity explains 8 percentage points of the 12 point
gender gap
 .
Department of Economics

27. Concluding
• Empirical evidence vast: measuring gaps has proved eternally irresistible.
• 3,108 JSTOR articles since Oaxaca (1973)
Not much on “what works”.
• Stephen Durlauf’s observation: cross-country growth regressions gave stylised facts
 What do we have? [Gaps higher at upper end, younger cohorts w/tiny gaps…)
• Emerging at last: to take centre stage The Motherhood Penalty or Wage Gap
• Understanding part-time work
• Outliers matter: eg a corner of Northwest Europe after the plague. Luxembourg’
Fresh approaches: follow example of development economics?
• Find more natural experiments (US rich in this: eg Bailey, 2021, Equal Pay Act) ,
• More RCTs on what works: are they possible? Design policy as natural experiment

28. How can we turn pay gap
statistics into actionable data
for employers especially HR
staff with little or no stats skills
Nigel Marriott CStat
Independent Statistician
ESWG, June 2021
28
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Company
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5577275,
VAT
number
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29. 29
 All of my blogs about the statistics of diversity & inclusion are here.
 https://marriott-stats.com/nigels-blog/category/diversity/
 My blog headings use a prefix to indicate theme e.g.
 Pay Gaps is the most common prefix and tend to be about general issues
with pay gap reporting.
 Pay Gap Case Study is used for posts that talk about specific examples
usually an employer or an industry.
 Pay Gap Trends is used for year on year analysis which includes methods
of imputation when data is missing (such as for 2019 snapshot)
 Ethnicity has also been used and if I write something relevant I will also
use Disability, Sexuality, etc.
 I’ve also grouped my blogs by a different set of themes here.
 https://bit.ly/2NJb9VR
 I will refer to a specific blog in a slide by adding this label e.g. “See C2”
means click on the 2nd blog listed under theme C.
www.marriott-stats.com
Look out for this labelreferringto a blog
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See C2

30. Why Ryanair’s Gender Pay Gap Report
is my favourite
30
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See D8

31. 31
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“The statistics were not merely inadequate: they lied. And
the lies they told led the people that ran baseball to
misjudge their players and mismanage their games”
“When numbers acquire the significance of language, they
acquire the power to do all the things which language can
do: to become fiction and drama and poetry. ”
Quotesfromthe“The Bill JamesBaseballAbstract
1977”byBill James,founderofSabermetrics

32. 32
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~30%of
employers
produce1-
pagePDFs.
Usually,they
justlistthe
statutory
calculations
&littlemore.

33. 33
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Iestimatebetween5-15%ofemployers
makemistakeswiththesecalculations
Do the statutorynumbertellyoumore
aboutRyanair’sgenderpaygapthan…
SeelinksinThemeC
e.g.C4ClevelandPolice

34. 34
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Ryanair had the largest verified gender pay gap
of any employer in the UK in 2018
… these self declarednumbers?
Two things immediately stand out from these numbers alone
1. The reason for the large pay gap today is clear & obvious
2. It will take a very long time to close the gap if ever

35. 35
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196meninthe
upperpayhalf
needtoswap
paywith196
womeninthe
lowerpayhalfto
eliminatethe
mediangender
paygap
Thenumbersarethestory(assumingnogrowthin
numberofemployees&2018 genderratioof 2:1)
OR
227malepilots
needtoswap
jobswith224
femalecabin
crew&3others
-196
+196
-196
+196
SeeE3forhowlongitwilltaketoachievetheseswaps

36. 36
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Iregardthe4pay
quartersasthe
FINGERPRINTofan
employer
Anemployer’sstorycanbetoldwiththeir
FINGERPRINT&SWAPNUMBER&PAYRATIO
SeeD7formoreabout
SWAPNUMBERS
Ryanair ltd
Hourly Pay by Gender in 2018
34%
43%
81%
100%
66%
57%
19%
0%
Lower Pay
Quarter
Lower Middle
Pay Quarter
Upper Middle
Pay Quarter
Upper Pay
Quarter
For every £1.00 the median man was paid in
2018, the median woman was paid £0.36
36% of employees in 2018 were women SeeB6(gender)&D6
(ethnicity)formore
aboutFINGERPRINTS
Ryanair’sGenderSwapNumberper
1,000employeesin2018was+129
PAYRATIOscompletes
thestoryi.e.average
payperPayQuarter
relativetotheLower
PayQuarter

37. South Tyneside Nhs Foundation Trust
Hourly Pay by Gender in 2018
16%
15%
10%
21%
84%
85%
90%
79%
Lower Pay
Quarter
Lower Middle
Pay Quarter
Upper Middle
Pay Quarter
Upper Pay
Quarter
For every £1.00 the median man was paid in
2018, the median woman was paid £1.00
84% of employees in 2018 were women
37
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Theaveragewomanearns78pfor
every£1earnedbytheaverage
manatS.TynesideNHS
ASwapNumberof Zeroismerelya Necessarystep
to closinga paygap butisnotSufficientonits own
InotetheUpperMiddlePay
Quarteristhemostfemale
dominatedpayquarterwhilst
theUpperPayQuarteristhe
mostmaledominated(though
still80%female).
IcallthisaGLASSCEILING
SeeB6formoreaboutFingerprintsintheNHS
WhatshouldS.Tynesidefocuson
goingforward? Morelowerpaid
men? Morehigherpaidwomen?

38. HITACHI CAPITAL (UK) PLC
Hourly Pay by Gender in 2020
38%
35%
54%
73%
62%
65%
46%
27%
Lower Pay
Quarter
Lower Middle
Pay Quarter
Upper Middle
Pay Quarter
Upper Pay
Quarter
For every £1.00 the median man was paid in
2020, the median woman was paid £0.68
50% of employees in 2020 were women
Staffordshire Police Headquarters
Hourly Pay by Gender in 2020
41%
40%
62%
71%
59%
60%
38%
29%
Lower Pay
Quarter
Lower Middle
Pay Quarter
Upper Middle
Pay Quarter
Upper Pay
Quarter
For every £1.00 the median man was paid in
2020, the median woman was paid £0.83
47% of employees in 2020 were women
38
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GSN
per1k
=+68
ASwapNumberis amoreaccuratemeasureof how
muchtime&work isneededto closeapaygap
Hitachi’sMedianGenderPayGapistwicethatofS.StaffsPolicebutGSNisthesame
ThelargerpaygapatHitachiisalmostcertainlyduetoalargerPAYRATIO
GSN
per1k
=+65
ThetimeneededtoreachaGSNofzeroislikelytobethesamethoughyoucould
arguethatHitachiwillbequickerduetopolicehierarchalstructures.

39. How did we end up with the current
statutory calculations
& are they still needed?
39
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See D9 if I’ve run out of time!

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Whydid ParliamentcopyONS paygapmethod?
 The ONS pay gap methodology documents and the Equality Act 2010 have
many remarkable similarities suggesting Parliament did a copy & paste.
 In particular they share the same April 5th snapshot date & relevant
pay period, the same exclusions for specific types of leave and what
should be regarded as pay.
 Consciously or subconsciously, it would appear that Parliament wanted
employers to be COMPARED between themselves and with the ONS
national pay gap
 With hindsight & experience, I now say comparability is both not possible
nor is it desirable and the legislation should be amended accordingly.
 For a start ONS & GPG pay gaps will never be the same e.g. “what
would ONS pay gap be if every employer’s GPG was 0?”
 A comparison mindset results in League Table mentalities whereas
the correct mindset is that of Continuous Improvement.
 The only reason why financial accounts are standardised is to identify
the correct tax rates & allowances. Why must GPG be standardised?
SeeB9
SeeE1

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7 RecommendationsforImprovingGPGReports
1. Make Gender Breakdowns by the 4 Pay Quarters (Fingerprints) the
front & centre of GPG reporting regime & abolish the other statistics
2. Employers to submit data for Men, Women, Other & N/A subject to a
minimum number per category to be determined by ICO for anonymity
3. Employers to submit actual numbers per category per Pay Quarter
4. Employers to submit average pay per Pay Quarter
5. GEO to calculate & publish Fingerprints, Swap Numbers & Pay Ratios
• Fingerprints i.e. % breakdown by category per pay quarter
• Swap Numbers calculated assuming employer has 1,000 employees
• Pay Ratios where lower pay quarter is set to 1
• Actual numbers submitted by employers are NOT made public.
6. Employers to include a 2nd breakdown by category in their pay gap
report (not sent to GEO) which reflects how the employer operates.
• Employer’s options include Job Role (like Ryanair), Sites/Divisions,
Perm/Temp, Full Time/Part Time, Pay Bands, etc.
7. Employers repeat steps 2 to 6 above including & excluding Variable Pay
SeeD9 fordetailedrecommendations

42. 42
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5 SuggestionsforImprovingCalculations
 GEO should make the following technical changes to GPG regulations
since we no longer need or desire comparability with ONS.
A. All calculations based on a 12 months/52 weeks period
B. With all calculations using 12 months/52 weeks data, reconsider
current employee exclusions (partners, reduced pay leave, etc)
C. Use Total Remuneration Package (i.e. include pensions & benefits)
instead of Ordinary Pay
D. Change Bonus Pay to Variable Pay and consult over its definition
with the intention of giving employers some discretion over what is
and isn’t variable pay
E. Conglomerates to report combined group data in addition to the
lowest level legal entities
SeeE4for10 waysto gamecurrentsystem
SeeB8&C3

43. 43
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SeeE4for10 Quick &EasyWaysto
EliminateyourPayGapTomorrow!
 I wrote this blog to show how the existing GPG system could be gamed by
unscrupulous actors, what I call Creative Pay Gapping.
 In doing so, I hoped to stimulate debate on what could be changed to
reduce distortions & incentives to game the system and make life easier
for employers.

44. 44
 All of my blogs about the statistics of diversity & inclusion are here.
 https://marriott-stats.com/nigels-blog/category/diversity/
 My blog headings use a prefix to indicate theme e.g.
 Pay Gaps is the most common prefix and tend to be about general issues
with pay gap reporting.
 Pay Gap Case Study is used for posts that talk about specific examples
usually an employer or an industry.
 Pay Gap Trends is used for year on year analysis which includes methods
of imputation when data is missing (such as for 2019 snapshot)
 Ethnicity has also been used and if I write something relevant I will also
use Disability, Sexuality, etc.
 I’ve also grouped my blogs by a different set of themes here.
 https://bit.ly/2NJb9VR
 I will refer to a specific blog in a slide by adding this label e.g. “See C2”
means click on the 2nd blog listed under theme C.
www.marriott-stats.com
Look out for this labelreferringto a blog
Copyright
of
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See C2

45. Panel Discussion
Karen Mumford – Professor of Economics and Labour Market Diversity, York University
David Freeman – Deputy Director, Labour Market and Households, ONS
Judith Shapiro – LSE
Nigel Marriott – Independent Statistician
23 June 2021 slido#57800

46. Closing remarks
Professor of Economics and Labour Market Diversity, York University
Karen Mumford
23 June 2021 slido#57800