The UK’s gender pay gap is larger than official estimates because data used to calculate it has not been weighted properly to account for jobs in smaller start-up and private sector organisations, academics have argued.
Researchers at UCL, Bayes Business School, University of the West of England, and University of Stirling reviewed the Office for National Statistics’ Annual Survey of Hours and Earnings (ASHE). This is used to calculate the UK gender pay gap.
Their findings, published in the British Journal of Industrial Relations, concluded that, despite efforts to weight the sample to be representative of the breadth of the UK workforce, it had not accounted for higher non-response rates from specific types of employers.
Having developed and applied a more representative revised weighting scheme, the researchers re-estimated the size of the UK gender pay gap.
They found the gap has been consistently underestimated over the past 20 years by the small but noteworthy margin of around one percentage point.
This happened because the original weighting under-represented smaller private sector firms, especially for women, and over-represented larger and public sector employers.
In the latter, pay is generally higher, and the differences between men and women within jobs are generally smaller. This under-representation was because smaller private firms were less likely to respond to the ONS survey, the research team found.
Despite being a mandatory requirement, on average, only 63% of employers responded to the survey between 1997-2019, dropping to just 46% since 2020.
The response rate among the largest firms was around 50 percentage points higher than among the smallest firms, and around 15 percentage points higher among public sector employers than private sector.
Study co-author Professor Alex Bryson, from UCL’s Social Research Institute, said: “When we saw the higher non-response rate among some firms, we questioned whether this could be skewing the sample and, therefore, distorting its findings.
“By adjusting the weighting, we accounted for this bias and saw that the UK gender pay gap has been consistently under-estimated for decades,” he added.
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