The state of pay: Demystifying the gender pay gap

New firm-level data, published for 2017/18 to meet new government reporting requirements, suggests that pay gaps are prevalent at the level of the employer, although they tend to be smaller than the pay gap for the industry in which they operate. Closing the pay gap within firms would not, therefore, eliminate the economy-wide pay gap altogether. But employers do have an important part to play, and should make every effort to ensure that their pay, progression and flexible working policies help both men and women to combine work and caring commitments, and do not unconsciously bias the balance of who progresses, and who doesn’t.

It is possible for an employer to have a large gender pay gap and be working hard to promote gender equality; it is also possible for an employer to have a small gap and pay women (and men) poorly. Further, some measures to promote gender equality may actually increase the pay gap in the short-term – for example, the recruitment of more female graduate trainees. We should therefore be cautious in attributing too much importance to the pay gap data in isolation. We would encourage more firms to publish short, accessible narrative reports alongside their pay gap results in future.

You can find IPPR’s own gender pay gap reporting here.