Last updated: 19 Mar 2024 11:00 Posted in:
While women’s participation in labour markets is increasing they continue to face pay disparities compared with men, according to the latest PwC Women in Work Index.
It found that the gender pay gap widened between 2021 and 2022 in 20 of the 33 OECD countries. This includes the UK, which experienced the largest annual fall on the Index of any OECD country, dropping four places from 13th to 17th place. This was driven by a widening of the gender pay gap in the UK from 14.3% in 2021 to 14.5% in 2022 and the fact that the UK is being outpaced by other countries in terms of progress made towards achieving gender equality at work.
Luxembourg ranks top on the Index, followed by Iceland and Slovenia. PwC said: “Luxembourg’s strong performance was driven by an improvement across all five indicators on the Index between 2021 and 2022. Luxembourg is a leader across the OECD on the gender pay gap, with a negative gap of -0.2%, meaning average earnings are higher for women than men.”
Australia saw the largest annual improvement in rankings, rising seven places from 17th place in 2021 to 10th place in 2022.
On the UK Regional Index, Scotland took the top spot this year followed by the South West in second and the East of England in third. Scotland’s strong performance was driven by an improvement across most indicators, including an increase in the female labour force participation rate from 73.2% in 2021 to 74.9% in 2022. This also led to Scotland recording the lowest gap in participation rates between men and women across the UK at 4.4%.
The Big 4 firm said that although a useful measure, the gender pay gap captures the difference in average earnings between women and men and does not account for differences in other pay-determining characteristics, such as qualification levels, industry and occupational grade.
It said: “We conduct analysis to explore whether gender disparities in pay in the UK remain once accounting for other personal and work-related characteristics that impact pay.
“Even after accounting for nine pay-determining factors other than gender, we find the majority of the pay differential between men and women persists. Our analysis shows that, on average, for every £1 earned by a man in the UK, a woman earns 90p despite having a similar personal and professional background. This highlights the significant role that biases and structural inequalities in the workplace play in driving gender pay disparities.”
The PwC Index found that closing the gender pay penalty could also unlock significant economic gains. It said: “We estimate that if women in the UK no longer faced a gender pay penalty, the potential increase in women’s earnings could be up to £55bn per year. Moreover, it could encourage more women to join or re-join the workforce – a 5% increase in the total number of women in employment could boost UK GDP by up to £125bn every year.”
The latest Index results use 2022 data, due to a time lag in data availability across all 33 countries on the Index.
"Our analysis shows that, on average, for every £1 earned by a man in the UK, a woman earns 90p despite having a similar personal and professional background. This highlights the significant role that biases and structural inequalities in the workplace play in driving gender pay disparities."
The PwC Women in Work Index