Explaining UK Gender Pay Differentials: Evidence from the BHPS 1995

Abstract

Oaxaca-Blinder decomposition is an important differential analysis tool in the area of economics and other social sciences to analyse the gender discrimination. This analysis helps in identifying the extent and the causes of this differential helpful for better social policy. The basic idea behind this analysis is that the gap is decomposed into the part attributable due to endowments and a part due to shift coefficients. Applying to the BHPS 1995, data we find that there is very significant gap between the male-female wages. The males have received advantage over the females in some attributes and another advantage is lower to some characteristics gains for females. Overall it is observed that discrimination is present in the UK labour market in 1995. But when treated for one or the other characteristics the gap favouring one or the other group minimizes.

Keywords: Wage Inequality, Earnings Differential, Gender, Discrimination, Earning Functions, BHPS