His and her (lower) pay: the impact of public reporting on the gender pay gap

A new paper finds that the U.K.'s 2017 gender pay reporting law has lowered pay inequality and given workers more visibility into gender-based pay imbalances

One of the most persistent challenges across the employment world is the pay gap between men and women. In every developed nation, according to the 2020 World Economic Forum report, “the differential in men’s median income and women’s median income is about 13.5%.” Looking at the trend, “the average wage gap in OECD countries is closing but at a very slow rate.” Indeed, it was 14.5% a decade ago and is now 13.5%, and it has therefore reduced by 1 percentage point in 10 years. This direction, notes the WEF, “is consistent with Executive Opinion Survey trends, which finds that in OECD countries, the wage equality for similar work has increased by approximately 2 percentage points in 10 years.”

The problem is even worse for minority women, notes the U.S. Department of Labor:

Compared with white men with the same education, Black and Latina women with only a bachelor’s degree have the largest gap at 65%, and Black women with advanced degrees earn 70% of what white men with advanced degrees earn. Educational attainment is not enough to close gender earnings gaps. In fact, most women with advanced degrees earn less than white men, on average, with only a bachelor’s degree. 

There are, of course, differing opinions as to why the gender pay gap persists. Some people believe that men and women chose different careers, which accounts for the discrepancies. Others believe that this phenomenon is created by gender discrimination, fewer advancement opportunities for women, and differences in men and women's relative bargaining power. 

As a result of the lack of progress on these issues, a few nations have implemented laws that force companies to report their gender wage gap. These acts are not without controversy, so it's important to understand what effect, if any, they have had on the problem. To aid in this task, new research from Stanford's Jack Blundell examines the impact of a 2017 U.K. law on wages in that market. Though his research looks only at U.K. data, it's worth noting that the gender pay gap in that market has followed a very close trend to that of the United States.