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Gender Wage Differentials in Public and Private Sectors Dissertation

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Introduction

Research Description

Lemieux (45) once said that one of the most defining factors in any employment unit is the wage that an individual earns. Among other factors, earning is one of the reasons that would make an individual choose one job for the other. The employment sector in the United Kingdom has been divided into two major categories, which are the private sector and the public sector. The main difference between the two is the fact that in the public sector, the employees work for the government in that they are paid salaries from the government while in the private sector, the employees work for privately owned companies and organizations. There has been a raging debate about the widening gap between the salaries offered in the private sector and those offered in the public sector. Becker (2005, p. 12) claim that this is not a good sign considering that every employee deserves to be paid according to the type of job and the experience he / she has for the job.

Another major determiner of the salaries in both the public and the private sector has been the gender of the employee. The employers in both the private and the public sector have continuously looked out for gender when offering their salaries. Various individuals and organizations have condemned this, claiming that some women in the job markets are well equipped with enough experience as compared to men in the same job market. Considering gender while offering salaries would not only be unfair to the women, but also unrealistic basis of determining salaries (Bhaskar 2001, p. 56).

Earning differentials across the sectors and based on gender has drawn the attention of many researchers. As such, various scholars have been conducting massive research with the intent of determining the reason behind this and the rationality behind it. The surveys that have been conducted about the widened gap between the salaries offered in the private and the public sectors. This has been used to mount pressure on the United Kingdom’s government to put into place measures to ensure that the rights of workers concerning salaries have been catered for (Lemieux 2007, p. 67). Among the laws that the government has been pressured to put in place is the earnings harmonization law that would ensure that the salaries of those working in the private sector is not abnormally different from those in the private sector. Gender equality has also been an issue, as various organizations have been keen to ensure that there are no discriminatory practices in the workplaces based on gender. This would mean that the gap between the salaries that are being offered in both the private and public sector would significantly reduce with time, and that gender would not be a reason to bring about difference in the earnings. Analysts have continued to say that this would be a major milestone in the realization of the countries goals and dreams (Lemieux 2007, p. 45).

Research analysts and nongovernmental organizations fighting for the rights of women have mounted pressure on government to put in place laws that would ensure women, who are employed in both the private and public sector, get the kind of salaries they deserve based on the type of job they are doing and the experience that they have. This would be a major milestone in the realization of gender equality in all aspects, which includes employment. In addition, the non-governmental organizations have continuously urged the government to put in place laws would ensure any employer who may in one way or the other use gender as a determining factor for salaries is prosecuted (Williams 2008, p. 92). This would reduce cases of women having to be paid less as compared to men just because of lack of gender equality. They have continued to say that this would have a major impact on the quality of services and goods that would be produced due to the surety to the women that their rights with regard to the salaries that they receive are safeguarded. This would also translate to an increase in the GDP of the country, as a whole since women would be able to perform better in their duties as employees. This would ensure harmony in various workplaces and as Bhaskar (2002, p. 138) states, this would translate to increased productivity of both genders.

According to the research analysts, the United Kingdom has had an increase in the GDP because most of employers have embraced the spirit of gender equality, which is very important when it comes to the realization of the profit margins. Various scholars have observed that several employers have not embraced the spirit of gender equality. Many of them are still biased towards women. Changing this trend would translate to a drastic increase in the GDP of the country as a whole. As such, the government should serve as an example in the fight for gender equality, which would be a major milestone in the general realization of the country’s goals and dreams. According to Blackaby (2001, p. 240), this would result in having a country where every individual would be judged based on the credentials and the ability to perform specific functions and not on gender. The graph below shows the economic growth of the economy of the United Kingdom from 1988 to 2009 based on the gross domestic product. The steady economic growth has been consistent with the implementation of various gender equality policies and wage harmonization laws.

GDP for the United Kingdom in the recent years.
Figure 1: GDP for the United Kingdom in the recent years.

In the United Kingdom, the wages that are paid off to the public sector add up to over 50% of the total government spending that is allocated in the annual budget. This is mainly because the United Kingdom’s government account for over 20% of the total workforce of the whole country. In addition to that, the government has introduced laws that are going to ensure that the salaries of all the government employees is increased which would mean that the total expenditure on wages by the United Kingdom’s government would go up significantly. This has raised a major debate among the stakeholders in both the private and public sectors in that some of them claim that the total expenditure of the government would be higher than expected which would translate into an increase in the total budget allocation to the government (Bailyn 2003, p. 36).

The recent studies have shown that there is earning difference between the two sectors. The studies show that there has been persistent difference in the earnings between those working in the public sector and those working in the private sector. For a long time, employees in the public sector have been earning a lower salary as compared to employees in the private sector. Because of the constant pressure put by trade unions and the employees themselves, the government has been forced to adjust salaries of public employees upwards. Although there are some private firms that still currently pay their employees much higher as compared to those in the public sector, Booth (2008, p. 340) notes that on average, public employee are better remunerated than those in the private sector.

This has brought a new twist in the private sector. It is very important to consider the level and the growth of the salaries of the public sector because an increase of the salaries at a very high rate would translate to a very big risk in terms of the private sector stimulating the salaries to increase according to the expectations. Considering the similarities of the nature of work between public and private employees and the seminaries in academic qualifications and other credentials, this would translate to an increase in the pressure for the private employers to increase the salaries of their employees. This would have an adverse effect on the private sector, which would have to increase their sales further according to the inflationary risk that would be created by the increase in the salaries by the government to the public sector (Freeman 2004, p. 21).

Context of the Research

This research paper would discuss the gap that is continuously growing between the salaries that are offered in the public sector and those that are offered in the private sector. The paper will also discuss the earning differential based on gender. The main sources of data for this research will be the primary and the secondary sources of information. The primary source of information will be on the survey on the sample population as described in the analysis section of this paper. The secondary sources will be from the relevant literatures that exist in this topic. The paper would draw from these two sources of information to make a conclusion on this topic.

Literature Review

The wage difference has attracted a lot of attention from researchers, especially due to the controversy with which it comes. According to Deaton (2008, p. 16), the gap between the salaries that are offered in both the private and public sector rises on a daily basis which is not healthy for any given working nation. This scholar also notes that there have also been cases where the employers have a very high degree of bargaining power in that the employers would decide the salaries that they offered to their employees.

Budd (2004, 208) argues that labor laws that have been introduced by the government are important aspects to consider when offering salaries to one’s employees. The important aspects that are to consider include the size of the workplace where the employees are working. The bigger the size of the workplace the higher the numbers of employees, which would in turn, translate to higher salary remuneration to the employees. In addition to that, the scholar notes that the type of owner of the company in question would determine the salaries that are offered to the employees. According to Deaton (2008, p. 45), labor laws that were introduced demands that if the business is owned by a foreigner it would pay to higher salaries to the employees as opposed to the companies that are owned by the local residents which would have a lower salary rate. In addition to that, if the business in question would have multiple partners, this would translate to an increase in the salaries that are offered to the employees.

The company in question must also consider the industrial relations policies that have been set by the government since the salaries that are offered to the employees must be discussed between the employees and the company management. Burgess (2003, p. 280) observes that this would reduce cases of the employees and the company management always being in wrangles over salaries and how they should be paid. According to the United Kingdom’s government website, this would be one of the ways that would reduce cases of the employees having to go on strike because their salaries have been delayed or the salaries that they are being offered is not enough and as such this would go a long way in achieving the goal of the country.

Resource Requirements

According to Dex (2002, p.52), the companies in question must adhere to strict human resource management practices. This would ensure that they employ the right people who are qualified for the correct job. As such, this would increase the chances of the employees being paid with accordance to their level of experience and as such reduce the gap that has been developed over the years between the salaries that are being offered in the private sector and those that are being offered in the public sector. In addition, the research analysts have continued to say that by doing this the employers would be able to deliver the right quality of products, services because the employees that they would have would be of the right experience, and as such be able to deliver according to the specifications of the customers and consumers Burgess (2003, p. 290).

Other scholars have been on the forefront in conducting surveys that have been used to determine the rate at which the gap between the salaries of the private and public sector affect employees. Dex (2002 p. 52) notes that various organizations have made concerted efforts to ensure that the gap is reduced to a minimum low, in order to avert any adverse effect it may have on the economy of the country as a whole. The surveys that have been conducted have shown that the government has been on the forefront in increasing the gap formed between salaries being offered in the private and those that are being offered in public sectors in that the government has in the recent years increased the public sector salaries drastically thus increasing the gap by a huge margin.

The human resource management has introduced a policy that has increased the performance of the company in question in that it has been able to develop practices that are family friendly in the work places (Budd 2003, p. 18). This practice has continuously increased the demand for employees, both women and men, in both the private and public sector because this practice, which have been known to increase the profit margins of a company, are in very high demand, considering that most of the companies in the United Kingdom are profit oriented. As such, we need this practice in a bid to increase the profit margins that they may experience. According to Caracciolo (2001, p. 340), in the United Kingdom, these practices have come to be of very high demand considering that most of the companies would go for policies that would increase the profit margins.

These practices include in incorporation of women in every aspect of deliberations, which may be held by the company since women would be included in the decision-making organs of the companies. Caracciolo (2001, p. 343) argues that this would mean they would fight for the women in the employment sector to get the kind of salaries that they deserve as compared to the kind of job that they would be performing and the kind of experience that they have gained over the years. According to a survey conducted in the recent years, this has had a drastic effect on the quality and quantity of products and services that are being offered to the customers.

Dixit (2007, 380) reports that in a recent newspaper article, the United Kingdom has also had increased pressure from the international organizations, which include the European Union, to put in place measures and laws that are going to make sure the rights of the women in the employment sector are catered for. This scholar notes that this would entail legislating and fostering of policies aimed at facilitating the full reconciliation of work and family life. This would be aimed at increase gender equality in both the workplaces and in the family life. This has had a major impact on the quality of services that are offered by the women due to their rights being fought for which is a very important factor to consider in the employment sector in both the public and private sector. This has prompted the United Kingdom’s government to adopt laws that are going to make sure that there is gender equality in both the work and family settings through a campaign that has been dubbed the work life campaign.

In this campaign, the government has gone out of its way to promote gender equality by conducting a huge public awareness by the production and distribution of information to both individuals and teams on matters that concern the specific obligations that are to be held by each member. These obligations include the legal entitlement of the women, which include the entitlement in the workplaces, which are to be paid a salary that is in accordance to the kind of job and the kind of experience that they have gained over the past years and thus increase gender equality.

Psychological aspects

According to the report by Disney (2008, p. 350), in the surveys that have been conducted, the gender salary inequality has been well documented. The surveys have found out that an increasing gap between the salaries that are offered for the women and those that are offered for the men in both the private and public sector exist. The surveys conducted have clearly shown that the gap between salaries offered in both the private and public sector has decreased in a drastic manner, although the gap between the two genders is still huge considering that women are paid less as compared to what the men are paid for the same types of jobs. Women have the same type of experience that has been gained over years yet they are not allowed to earn equally

Trinder (2007, p. 42) says that the surveys have also found out that there are exploited links on the salaries that are offered to the women and the men with regard to the characteristics. This has been a major milestone in trying to explain the gap has developed between the salaries that are offered to women and the men in the same type of jobs and the same experiences for the jobs. These surveys have elicited a heated debate among the stakeholders in the employment industry, some of whom support that gender equality in the workplaces would be very favorable to the increase in the profit margins that would be experienced by the specific companies. This would in turn translate to the general increase in the GDP of the United Kingdom as a whole (Disney, 2008, p. 368).

The surveys that have been conducted in the recent years have shown that the gap that has developed between the salaries that are offered to the women and men is determined by the workplace. This is because the salary that is to be paid to both the women and men is determined by the characteristic of the job in question and the general workplace where the job is. According to the survey that was conducted in different workplaces, most of workplaces have embraced the need for gender equality but some of the workplaces have not yet been able to embrace the need for gender equality especially in the workplaces in that the salaries that are offered to both the men and women would differ. According to the surveys that have been conducted, it is very important to have gender equality in the workplaces. This is because one may find that in some of the workplaces in question; the women are more experienced than the men, which would mean that the women would have a greater advantage as compared to men. Therefore, they would have to be paid at least more as compared to men considering that men would not have the kind of experience that may be held by women (Trinder 2004, p. 42).

This has continued to increase the debate on the gap between the salaries that are offered to the men and those that are offered to the women. Weichselbaumer (2005, p. 502) notes that the international organizations mounting pressure on the United Kingdom’s government to put in place laws that would ensure that the salaries that are offered to the women reflect the kind of job they would be doing and the type of experience that they would have gained over the years. In addition, the international organizations have been on the Frontline in mounting pressure on the private sector to increase the salaries of the women to reduce the gap that has been developed between the salaries that are offered to the women and those that are offered to the men.

Disney (2003, p. 130) observes that there has also been an increase in the debate with regard to the difference in workplaces in that the different workplaces would determine the difference in the gap between the salaries that are offered to the women and those that are offered to the men. According to that surveys that have been conducted by research analysts in the recent years, the workplaces is one of the major determining factors in the determination of the salaries that are to be offered regardless of the gender. In addition, the workplace values have been struggling to ensure equality in salaries, with employees in some workplaces enjoying higher salaries as compared to others working in other workplaces but perform the same kind of duties. This has widened the rift between the salaries that are offered to the men and women in that most of the employees who would enjoy the high salaries are the men while those who enjoy the low salaries in the same type of workplaces would be the women. This would have a major effect on the products, services that are offered to the customers and consumers in that the women would consider themselves inferior than the men due to the gap between the salaries thus would produce products, and the men produce services that are of less quality as compared to those that are of high quality.

Anderson (2004, p. 50) notes that it is important to take into consideration the educational level as a determining factor in the determination of the salaries for both the men and women in that the employees with a higher educational level enjoy a higher salary than those less educational levels. Educational levels have been the most important determiners in the employment sector in both the private and the public sector in that when one is being employed in either the private and public sector, the employer must be able to confirm that he / she is qualified for the job that he / she is applying for. Millward (2004, p. 64) argues that this would then determine the salary that one would get in that the higher the educational level, the higher the job capacity, which would in turn translate to a higher salary experience. Employers in both the private and the public sector have used educational qualifications as one of the major determiners in the employment of the employees. However, according to the recent surveys that have been conducted, this has also been a major determinant in the salaries to be offered in that employees with a higher educational level get a higher salary as compared to others.

According to Anderson (2004, p. 58) employers are currently keen to ensure that they hire employees with very high grades for various jobs they have to offer. These highly qualified individuals would demand for high salaries, which would in turn increase the gap in the earnings. Research analysts have been on the Frontline in urging the employers to employ more of the women who are highly qualified and highly skilled to reduce the margin between the salaries offered to the men and those offered to the women (Groshen 2001, p. 468). By employing more qualified and skilled women, the employers would have to pay, more salaries, which would mean that the gap would reduce drastically which would in turn translate to an improvement in the quality of products, and services that are offered to the customers and consumers.

There has also been mounting pressure from other stakeholders in the employment sector who have increased the pressure on employers in both the private and public sector to employ more women who are highly qualified for the jobs. Thiswould reduce the gap that has developed between the salaries that are offered to the men and those that are offered to the women. The stakeholders have continued to say that this would be a major milestone in the fight for gender equality in the workplaces since women would feel more secure thus would produce to the best of their ability thus increasing the quality of products and services that are offered to the clients (Joshi 2008, p. 98).

Background Information

This chapter would look at the background information with regard to finding out the main reason behind the gap that is ever widening between the salaries that are offered to the women and those that are offered to the men in both the public sector and the private sector. In addition, the author of this paper would conduct a research to find out how the research analysts and other stakeholders in the employment sector are working around the clock to make sure that the gap between the salaries that are offered to the men and those that offered to the women are reduced. This would ensure that increasing the working capacities of both the men and women in the employment sector, which would include both the private and the public sector. On the other hand, this chapter would try to find out several remedies that have been formed in a bid to reducing the gap that is being widened with every single day between the salaries that are offered between the men and women in both the private sectors and the public sectors of employment (Burnette 2008, p. 15).

Theoretical Background

Anderson (2004, p. 58) argues that the gap between the salaries that are offered to both the men and women in both the private and public sector has increased drastically which is a major cause of concern among the major stakeholders in the employment sector in the United Kingdom. This is mainly because the United Kingdom relies heavily on human labor in a bid to increasing the general GDP of the country. As such, this has been a major setback considering that the women who most of the time has been the ones left out in the process would not be able to deliver quality services to their customers and consumers. This has been a major factor for debate where stakeholders are increasingly mounting pressure on the government to impose rules and regulations that are going to make sure that the rights of the women with regard to the kind of salaries they would earn from their employment be determined by the educational qualifications. This would be in relation to the experience they hold with regard to the kind of job they would be performing.

This would go a long way in helping the women in the employment sector to be able to perform their duties to the best of their abilities. This, as Joshi (2008, p. 98) notes, would as well mean that they would produce quality products and services to the customers thus translating to an increase in the profit margins that are to be experienced by the company. In the recent years, it has been proven that in the employment sector in both the private sector and the public sector, gender has become one of the most important bases since the employers would always consider the gender of the employee before he / she is allowed to work in given company or organization.

This would further elicit debate among the non-profitable organization that fight for the rights of the women who claim that the women are sidelined when it comes to gender inequalities (Paci 2001, p. 72). In addition to that, the non profitable organization which fight for the rights of the women are in the forefront in mounting pressure on the employers in both the private sector and the public sector to stop considering gender as one of the basis in which an employee may get his / her work. On the other hand, they are also urging the employers in both the private and the public sector not to use gender as a determining factor for the salaries that would be offered. This is because this would increase the gap that is formed between the salaries that are offered to the men and those that are offered to the women further which would not be a good sign for the given companies and organizations (Filer 2006, p. 424).

The non profitable organizations have come up together in a bid to educating the employers on the need to have gender equality in the employment sector because this has been proven by several research analysts to have a major impact on the profit margins that would be experienced by the companies. This would perhaps motivate the women to work harder thus producing quality products and services to their customers and consumers and as such increasing customer satisfaction which is one of the most important aspects that any given company or organization should consider (Lyonette 2010, p. 102). Other major stakeholders in the employment sector have also come together to urge the employers in both the private and the public sector on the need to have gender equality when it comes to the salaries that are offered to the men and those that are offered to the women.

Chatterji (2007, p. 29) reports that major stakeholders have come up with ways by which employers are to determine the kind of salary that every employee is to get, which they have distributed to every employer in both the private and the public sector. This is aimed at ensuring that gender parity is reduced, which would reduce the gap that has been developed over the years between the salaries that are offered to the men and those that are offered to the women in both private and the public sector. Some of the employers in both the private and public sector have embraced this as a positive gesture that is aimed at reducing gender inequality as some are still reluctant as they have employee who are earning more than they deserve and others are earning less than they deserve based on their gender. The major stakeholders in the employment sector have also come up with ways that are going to make sure that there would be gender equality. This would in turn reduce the gap that has been developed over the years between the salaries that are offered to the men and those that are offered to the women in both the private sector and the public sector.

Some of the ways that the major stakeholders have come up with is the introduction of websites that can be used to report any cases of gender inequality in the workplaces mainly with regard to the salaries that are offered to the men and those that are offered to the women in the employment sector. Some websites that have been created specifically for reporting cases have been a major milestone in the reduction of the gap between the salaries that are offered to the men and those that are offered to the women. This is because employers have started streamlining the salaries for the men with those for the women with the determining factors being used accordingly. Some of the employers in both the private and public sector have also stopped using gender as one of the determining factor. Currently, they use the educational qualifications that are held by the employee and the kind of experience that is held by the employee as the main determining factor for salary payment that any given employee deserves. This has helped in the reduction of the gap between the salaries that are offered to the men and those that are offered to the women drastically in the recent years, which has been a major milestone in the fight for gender equality in the employment sector.

Figure 2: Graph That Shows Reduction of Gender Inequality Cases In Workplaces.
Figure 2: Graph That Shows Reduction of Gender Inequality Cases In Workplaces. Source: Paci 2001, p. 75.

Institutional Background

The main reason why the main stakeholders and other research analysts have advocated for gender equality in the employment sector, especially considering the salaries that are offered to the women with comparison to those that are offered to the men is because, it is a major tool in the motivation of employees to work much harder. This would ensure that they achieve the best of the customers’ satisfaction, which would in turn translate to an increase in the profit margins that are experienced by the company (Stewart 2003, p. 750).

Oaxaca (2004, p. 24) argues that customer satisfaction being the most important aspect of any given company or organization, is what most of the companies and organizations are aiming at, which can only be achieved when there is total dedication from the employees. The employees would deliver the products and services to the customers and consumer but this would be determined mainly by the motivation that they would get from the employers. One of the main motivating factors is salary remuneration for the employees, which is considered very important according to the surveys that have been conducted over the past few years in different organizations and companies. For any employers to be able to get the right kind of quality from the employees, he / she must be able to guarantee the employees a salary remuneration that would be enough for their personal needs and other needs.

The employees must also feel that the salaries that are offered to them are of the right amount with regard to the type of job they are performing and the kind of qualifications that they hold with regard to the job (Disney 2004, p. 420). Gender equality is another major factor that must also be addressed in the workplaces because the employees must be able to feel the value of the work. This means that there must be gender equality, which would in turn result in the motivation of the employees to perform to the best of their abilities to produce quality products and services to the customers and consumers in the organizations and the companies.

Disney (2004, p. 615) explanations that gender equality must be addressed especially in the salaries in that the employers must not use gender as a determining factor in the determination of the amount of salary that an employee is to get. It is therefore very important for the employers in both the private sector and the public sector to consider that gender equality is one of the most important determining factors for the determination of the profit margins that may be experienced by the companies and organizations. This would also help in the reduction of the gap that has been developed over the past years between the salaries that are offered to the men and those that are offered to the women in both the private and the public sectors of employment (Nickel, 2002, p. 110).

Kersley (2004, p. 120) cautions that employers must be able to understand that gender equality, especially in terms of the salaries that are offered to the men and those that are offered to the women is a major determining factor. This would determine the quality of products and services that would be offered to the customers and consumers in both the private sector and the public sector. This being the case, the employers must also stop using gender as one of the determining factors for the determination of the salaries that are to be offered to the employees in the private and the public sectors of employment. According to some surveys that have been conducted over the past few years, with regard to the salaries that are offered to the women with comparison to those that are offered to the men, it is clear that most of the employers have used gender as one of the determining factors. Gender is therefore used to determine the salary that every employee is to get without having to consider the educational qualifications that are held by the employee and the kind of experience that the employee has with regard to the job they are performing (2005, p. 330).

It is clear that, although the gap between the salaries that are offered to men and those that are offered to the women is reduced, there is also a lot of work and effort that has to be put in to make sure that the gap is reduced fully. This would mean that there would be gender equality in the employment sectors in both the private and the public employment sectors. The surveys have also pointed out clearly that the main people who can make this possible are the employers in both the private sector and the public sector. This is because they are the ones who can be able to make sure that there is gender equality, with regard to the salaries that are offered to the men and those that are offered to the women. This, according to Disney (2008, p. 350), would mean that there would be enough motivation for the employees to perform to the best of their abilities. This would result into quality products and services to the customers, which would increase customer and consumer satisfaction that would then translate to an increase in the profit margins that may be experienced by the companies and organizations.

There are scholars who have conducted research in a bid to find out how the gap has affected the employee’s performance. According to Manning (2004, p. 170), it is clear that most of the employees consider that it is very important to have gender equality in the workplaces, especially in the salaries that are offered to the women and those that are offered to the men. This is because this would have a major impact in the motivation of the employees to work extra hard to make sure that they produce quality products and services to the customers and consumers which would lead to customer and consumer satisfaction which is the most important aspect of any given company or organizations.

The researches that have been conducted in the recent years in several companies and organizations that are both privately owned and publicly owned have also found out that most of the employees are not fully motivated to work extra hard in their duties because there is gender inequality (Williams 2000, p. 78). Therefore, this would mean there is an unfair distribution of salaries regardless of the educational qualifications that are held by the employee or the kind of experience that is held by the employee. In addition, the results show that this has been a major contributing factor leading to employees not being able to produce the right quality of products and services.

This is because they are not fully motivated to do so. The research analysts have also offered recommendations, which have included the introduction of a system that would make sure that gender equality in the workplaces prevails with regard to the salaries that are offered to both the men and women. This would definitely reduce the gap that has been developed over the years between the salaries that are offered to the men and those that are offered to the women. On the other hand, the research analysts have noted that that there is an increase in the employment of the women in both the private and public sectors of employment, which is a major milestone, is the fight against gender inequality.

Though the researchers have claimed that this is a good sign of days to come, more needs to be done with regard to the employment of the women in both the private sector and the public sector, which would be used in the fight against gender inequality. They have also said that it is important for the employers in these sectors to make sure that they do not in any way use gender as one of the determining factors in the determination for the salaries that are to be offered to the employees. If they do this, it would have a major impact in the quality of products and services that are to be offered to the customers and consumers. In addition, the research analysts have said that the reduction of gender inequality in the workplaces would be a major motivating factor for the employees who would then be able to work to the best of their abilities to produce quality products and services to the customers and consumers. This would perhaps increase customer and consumer satisfaction, which would have a direct impact on the profit margins that are to be experienced by the companies and organizations.

Graph Showing the Rate of Employment for the Women.
Figure 3: Graph Showing the Rate of Employment for the Women.

Historical Background

Historically, the men have always been considered to superior over the women and this has been the case in the employment sector in the recent years. The men have been considered superior in that the employers have used gender as one of the determining factors that is used to determine the amount of salary that any employee is entitled , Weichselbaumer (2005, p. 510). This being the case, the men have been earning more salaries than the women have in that the employers have always considered the mean. According to recent surveys that have been conducted over the past few years, the men have been the gender that has been favored when it comes to entitlement of salaries in that they have been considered better than the women. This has been a cultural belief thus making them earn more than that, which is earned for the women. In addition to that, the surveys that have been conducted by different research analysts in different companies and institutions, have shown that the employers have employed more men than women in the recent years which has raised doubts about the credibility of the men that are considered for the job (Luciflora 2006, p. 52).

Men make the highest percentage of employees in all the organizations and companies that the researchers visited a sign that most employers have always based their employment on gender. This has had a major impact, especially on the quality of products and services that are offered to the customers and consumers, considering that some of the men who are considered for some of the jobs do not have the right educational background or enough experience. This would mean that the products and services that would be produced from this job would not be of the right quality. This would then lead to customer and consumer dissatisfaction in that the products and services would not be of the right quality as expected which have a direct impact on the profit margins that would be experienced by the companies and organizations. They would also have a major impact on the total GDP of the country, which relies heavily on the profit margins that are experienced by companies and organizations.

Women who are employed in both the private and public sector complain of gender inequality in the salaries that are offered to them in comparison to the salaries that are offered to the men in the same type of jobs. According to the survey results, most of the women in the employment sector have qualifications that are more educational and experience than the men, which would mean that they would earn more than the men in a normal situation of which is not the case when it comes to the employment sector. This has been a major factor leading to the reduction of the quality of products and services offered to customers and consumers. This is because the women in the employment sectors are not fully motivated to perform considering that there is gender inequality, especially considering that the salaries that are offered to the women are not the same as those that are offered to the men. Some of the women have more educational qualifications and experiences as compared to those that are held by the men (Hashimoto 2001, p. 478).

It is also clear from the recent researches that most of the employers have used gender as one of the most important factor in the consideration for any job offering or salary offering. This is one of the factors leading to the reduction in the quality of products and services offered to the men and women in both the private and the public sector. The surveys have clearly pointed out that, it is very important for the employers in both the private and the public sectors not to consider gender as one of the determining factors for employment in any job position as this would have a major impact in the quality of products and services that are offered to the customers and consumers. The surveys that have been conducted by research analysts have also offered recommendations to the employers in both the private and the public sector in the way forward when employing job applicants in any job positions in the organizations.

Some of the recommendations that have been offered to the employers include the consideration of the women in some of the job positions, as some of them have enough educational qualifications and experienced that may help them in the delivering of quality products and services to the customers. They have continued to say that this would have a major impact on the customer and consumer satisfaction, which would have a positive impact on the profit margins that would be experienced by the companies and organizations. They have also said that this would then have a positive impact on the country’s GDP, which has been on a steady rise in the past few years. This is due to the increase in profit margins that are experienced by the companies.

Another major recommendation that has been offered by the research analysts in the survey is the bridging of the gap between the salaries that are offered to the men and those that are offered to the women. This is because if this is done, the women would have motivation to work harder in a bid to increasing customer and consumer satisfaction which is one of the major aspects of any given company or organizations. Some of the employers in both the private and public sector have been taken into effect the recommendations that have been offered by the research analysts in the surveys, which have had a positive impact on the customer satisfaction that the companies and organizations have experienced. This has prompted the employers to go ahead and employ more women in a bid to increasing the customer satisfaction further, which is one of the aims of any given company. According to recent surveys, the companies and organizations that have implemented the recommendations that were offered in the previous researches have had an increase in their profit margins due to customer satisfaction. This is mainly due to the increase in the quality of the products and services that are offered to the customers and consumers.

Number of Common Dolphins

Primary Data

In this study, the researcher used data from British Workplace Employee Relations Survey 2008, hereinafter referred to as WERS08 (Stewart 2003, p. 752). The choice of this data source was because the data from this institution has always been lauded as being valid. The data was a national representation of employee’s survey and their workplaces. The researcher conducted a face-to-face interview for WERS08, especially the senior management unit. Given the difference in the characteristic of employees and the workplace, stratified random sampling proved to be the best strategy to be used in order to ensure that the data gathered was all-inclusive. This was to ensure that the sample population would be as close a representative of the entire population as may be possible.

In order to allow for complex design of the survey, the researcher ensured that the data was weighted (Chiswick 2003, 207). This was especially so because of the differences that exists between the public and private sectors and the perceived difference between male and female employees. The researcher laid emphasis on full time employees to gather the data. The researcher used 9400 employees on a full time basis, 6800 of which were from the private sector while 2600 of them were from the public sector. The researcher narrowed down to only those employees with complete information on the desirable variables. This was the number that was used in the analysis. It is important to note that some industries were left out in this analysis, especially the fishing and hunting. This is because the data given from these sectors were not consistent. The employees working outside the country were also beyond the scope of the study because their earnings sharply differed from that of the individuals working within Great Britain.

Measuring the Earnings Gaps

As stated in the above chapters, this research is focused on finding the earning differentials that exist between public and private sector employees and between male and female. Table 1 in the appendix is a comprehensive definition of the terms that have been used in this research. In the body of the research, most of these terms are abbreviated. The Table 2 is the sample mean by gender, region, sector, and family status for both genders and in both the public and private sectors. The third table is the earning function within the sector. In Britain, the standard average working hours of full-time employees per week is 37 hours in the public sector. The private sector differs with the public sector because it is always slightly higher than the public sector. According to the recent report, the number of employees in the public sector is approximately 27.5 percent under full time basis. This leaves the private sector with approximately 72.5 percent. The public sector employs about 22.32 percent of the total male population in the country, and 35.50 of the females (the working class).

The researcher averaged the hourly earnings, before any other deductions for the individual employee for the purposes of computation. This was important because some employees earned higher salaries because they worked for longer hours, mostly overtime hours. The gross salary for each week was therefore divided by number of hours worked for the week. The responses from the survey for the weekly wages are developed into a band (regions) in a data set. Given the volume of data that was used in this research, 14 bands were developed. The mid points of these bands were used for the analysis. Based on this approach, it would be true to say that, employees on the public sector averagely earn 14 log wage points over the employees in the private sector. This is clear from Table 2 in the appendix below. However, the average figure above may differ if the analysis is done based on gender of the individual employee. The basis of this paper is to compare the earnings of the male and female employees in the public and private sectors working on full time basis (Burgess 2009, p. 160).

The analysis of the earning difference can be done on various fronts, given that the main concern is the comparison of male and female full time employees in the public and private sector. The analysis can be done on the two genders within the sector (either public or private). One gender in one sector and the other gender in the other sector, one gender within the sector (giving factors that one is an individual of the same gender earn differently from another in the industry), or one gender across the industry (differential earnings of individuals of same gender but different industry). This is clearly demonstrated in the diagram below.

Measuring the Earnings Gaps

This figure will be discussed further in the decomposing earnings gap section below where the earnings in the public and private sectors would be analyzed. An example of analysis done within genders across the sector for female would be as follows with the data in Table 2.

Log hourly wages for female public sector= 2.36677

Log hourly wages for female private sector=2.163112

The difference would be 2.36677-2.163112= 0.203658 rounded to 0.204, which is written as 20.4 log percent. This would be interpreted to mean that across the sectors but within genders, the public sector to private sector gap for women is 20.4 log percent based on log hourly wages. This value for men would be 12.1 log percent. It is therefore clear that the public to private sector gap is twice as big in for female as it is for male.

Across genders but within the sector, this difference is even larger. This is demonstrated in the calculation below.

Log hourly rate for male public sector= 2.581474

Log hourly rate for female public sector= 2.36677

The difference would be 0.214704 which is 21.5 log percent.

Log hourly rate for male private sector =2.460895

Log hourly rate for female private sector =2.163112

The difference would be 0.298 which is 29.8 log percent.

It therefore means that the male public sector to female public sector gap is 21.5 log percent while the male private sector to female private sector is 29.8 log percent.

The Determinants of Earnings

Individual Characteristics

It is always a general assumption that an individual’s wage rate would always increase with increase of skills accumulated by an individual such as level of education, trainings, or work experience. This research paper would also hold this assumption. From the data given in WERS08, it is true that barely quarter of the full time employees have bachelor’s degree or higher educational levels. Work experience has been taken to add knowledge to the employees, and therefore, many employees are always willing to pay more for this experience. WERS08 however, lacks a clear data on how to calculate this difference. A number of scholars have therefore resorted to using crude methods that are prone to a number of errors. Some scholars have also argued that when defining variables for employees’ characteristics, demographic variables such as the employee’s marital status, number of children, ethnic identification, physical disability or any other relevant demographic factors should be considered. The characteristic of the job should also be put into account.

The data on Table 2 shows that more men (68.85 percent) than women (654.94 percent) in the private sector are married. The table also shows that most of the children under 19 years depend mostly on their fathers or male guardians (67.50 percent) as opposed their mothers or male guardians (53.41 percent). However, children below four years tend to be cared with by the mother or other female relative at 98.81 percent as opposed to that of men whose average is 90.37 percent

Workplace Characteristics

These factors condition, employment conditions, or such other characteristics that may be considered in groups. In this research, small sized firms are defined as that which employs up to 25 employees. A firm that hires slightly higher number on a casual basis within specific period, say during the boom would still be considered as a small firm. A medium sized firm employs 25-499 employees, while large firms employ more than five hundred employees. The firms are defined according to the international standards of grouping firms. Comparatively, public sector had bigger firms in terms of capacity of people than private sector. This research focused on twelve regions. These regions are identified in Table 1 in the appendix. There is a difference in earnings in these towns. Yorks and Humberside, (region 2 in Table 2) was identified to be giving the highest remuneration of the twelve cities for both genders in the public sector. The percentage earnings for female are 95.84 while that for men is 97.21 percent. In the private sector, female earn 96.10 percent while men earn 98.45 percent. It is the region where the earning gap between male and female employees is relatively high. Other regions have the earning difference between male and female being very huge.

Based on the size of the firm, medium sized firms are the best paying firms for both genders. Again, it is clear that the earnings for men are higher than that for women. Women in medium sized firms earn 45.29 percent, while men earnings are 50.58 percent in the private sector. This value slightly increases in the public sector where the earnings for female employees are 51.75 percent while that of male employees is 56.13 percent. Different occupations give different earnings for both male and female employees of this firm. Table 2 shows that the earning based on the occupation vary a great deal.

No single occupations that can be said to give the highest earnings for both male and female employees in the two sectors exist. One occupation may be paying well for women in the public sector but not in the private sector, or for men in the private sector but not women in the very sector. Professional women (occupation 2 in Table 2) earn the highest at 76.36 percent in the private sector, while the best paying occupation for men is small employers and own account(occupation 4 in Table 2) at 47.35 percent. It therefore implies that female professionals in the private sector earn higher those male professionals in the same sector. This is quite different from what is the case in the public sector. The highest earning occupation for female in the public sector is professional occupants (occupation 2) 22.93 percent, while that for male employees is intermediate occupations (occupation 3)27.66 percent.

Other than the remuneration package received by employees, there are other packages that employers should give in order to ensure further employee satisfaction. There are policies that have proven to offer more satisfaction to the customers, especially those that are generally referred to as employee friendly policies. These include policies that allow employees to get a fully paid maternal leave, fully paid paternal leave or parental leave to care for the children. When these leave are paid, employee tend to feel that their interest is taken care of by the employer. These benefits however, are more common in the public sector than they are in the private sectors. Most of the private sector institutions pay half the remuneration when an individual is on leave, especially when the leave is outside the normal set leaves that they should be getting on an annual basis.

Another policy that is becoming increasingly popular in the current world is telecommuting. This involves cases where employees are allowed to work online and send their work electronically. The employee would feel that he or she has been given a day off to spend with the family, though at a small price of completing a given assignment and delivering it within the stipulated time and in a satisfactory way (, Hamilton 2003, p. 480). The figures in Table 2 shows varying factors that would result in the differential earning for both men and women employees in different sectors and industries, within different geographical locations. It is also important to note that although industrial relations, especially unionization are on the decline in this country; their effect can still be felt in this country. Collective bargaining gives employees more strength to bargain for better pay than when employees speak at an individual level. Having a formal grievance procedure is important to reaching for the desirable policies to be implemented in the organization.

Within Sector Differences in Characteristics across the Groups of Employees

Within one sector, either the public sector or private sectors, it has been evident, from the data results in Table 2, that earning differential is based on gender. Although it is true that there are different other factors that would result in this differential earnings, gender played a very important role. The table shows that on average, men earn more than women do. This can be presented in the graph below for Male Private Married employees (MPM) and Female Private Married employees (FPM).

Male Private Married employees (MPM) and Female Private Married employees (FPM).
Source: Developed from data in Table 2.

The graph above was developed using only one variable in the private sector the marital status. Other variables can be used to come up with various other graphs, but from the trend in the data, the graphs would still show dominance of male employees over female based on salary.

Estimation of the Earnings Function

The process of estimating the earnings of the employees would help in further analysis in this research. The researcher used semi-logarithmic wage equation. The earnings equations were therefore estimated as:

Wi=α + Xiβ +Zkγ +εi

Where Wi is the natural log for wage of individual i

α is an intercept term Xi is the vector for regressors measuring the range of individual’s characteristic

Zk is the vector regressors measuring workplace characteristics εi is the residual term

Using this Mathematical model would enable us estimate the earnings of individual employees with different characteristics working in workplaces with different characteristics. The models were separately estimated for each group of employees, that is, the private sector female and male, and public sector female and male. The researcher also took note of the fact that pooling of the models for females and males is a common approach taken by many scholars. This is one of the assumptions taken by the researcher in this study. Despite this assumption, the researcher took the view that the models for female and male private sector and public sector employees have a higher probability of producing different parameters as compared to that for all the employees.

Although the earnings data taken from WERS08 presented issues for construction of earning series, the researcher took a lot of concern for the clarity and robustness of result estimates. In the methodology explanation, the earnings data was banded. However, Trinder (2007, p. 56) notes that there is a possibility that the banding process may have effect on the properties of ordinary least square estimates of earnings function. The research was therefore concentrated on the estimates of ordinary least squares.

Estimation Results

The approximations of the salaries function for every group among employees are presented in the table below (Table 4). These include the salary approximates of public quarter male, public division female, private segment male and private quarter female permanent employees, correspondingly. In every case, we approximate the models with average slightest squares, which would fully permit the multifaceted review design of the data set and the necessity to weight. The typical inaccuracies accounted are robust to heteroskedasticity of an unidentified figure in the residuals (Stewart 2003, p. 740). All approximations utilize composite survey weights. Generally, the stricture approximations are commonly well classified and have the projected symbol.

Interpretation of columns in table 4 shows that the return to possible expertise is higher in the private division and seems to be higher for women within the quarters. We anticipate that the profits from expertise for women would tend to be prejudiced downwards, as the quantification of knowledge utilized are expected to overrate the time they essentially spent in service (Postel-Vinay 2005, p. 120). Existing work occupancy is rewarded in the same way for men and women across public and private divisions. The returns from edification are higher for men as compared to those from women across sectors. It is higher in the civic sector than in the clandestine segment within sexual category. Postgraduate females in the clandestine division have an approximated rate of return, which is actually 50 per cent lesser as compared to those of postgraduate males in the civic division. There is no considerable proof of men getting higher salaries as regards to current education, in contrast to women in both divisions where a comparatively small effect is established. Lazear (2000, p. 620) emphasizes the fact that occupational experiences are considerably interrelated with salaries for women.

Regarding the outstanding personality traits, being in marital relationship and having a child to care for are simply related to higher wages for men. On the contrary, having a family to take care of is related to poorer earnings for females in the private quarter. Being on a fixed-term agreement or a member of a certain trade union is not correlated to wages for any of the four categories of workers. The proceeds to profession (comparative to the omitted dexterity group) are significantly higher for females as compared to males. This would imply that there is no comprehensible model in these proceeds across the two quarters. In the public division, extremely skillful professions are comparatively rewarded badly for men. However, female managers are paid well. In fact, female executives earn approximately twice the income as compared to the male administrators in this division. Moreover, women earn approximately three times as much for experts. Among the inexperienced professions, there is slight disparity across the division in proceeds but males are perceived to be reprimanded greatly as compared to females.

In view of the place of work character, there are only some characters proved to be radically interrelated to earnings in the civic quarters. This may perhaps be because of the absence of variability in these qualities across these places of work. Exclusion is the presence of family responsive work behavior, which has a comparable sized considerable constructive correlation for all the categories excluding men in the civic quarters. Performance related reimbursement and annuity stipulation are robustly interconnected to higher salaries in the private quarters. However, team working is not an important variable in the private sector. Collective negotiation is only connected to higher reimbursement for male private division workers. Regional procedures are incorporated in the model fundamentally as extra structural management tool. Obviously, workers in the London region get considerably higher salaries and this impact is analogous to other quarters and sexual categories. For male members, there are as well a number of gains from residing in the southeast and the east of England in the clandestine division.

Decomposing the Earnings Gap

This research involved four groups of employees. These groups are male in public sector, male in private sector, female in public sector and female in private. The estimates for these four groups of employees make it possible to examine the value of earnings gap (Simpson 2006, p. 1140). The labor market discrimination based on gender has been on existence for considerably long time. As such, several scholars have come up with methods if decomposing the wage gap. Among the first scholars to develop method of decomposition of wage gap were Oaxaca (1973, p. 21) and Blinder (1973). Many scholars have since come up with various methods of decomposing the wage gap between the two genders. Some of these scholars include Cotton (1988, Neumark (1988), Jenkins (1994), Blau and Khan (1994) and Krishnan (1999). Although these recent methods have proven to be effective in the decomposition of the earning gap, this research will focus on Oaxaca (1973) and Blinder (1973) model. The model supports the decomposition of the wage gap between two groups. As such, the researcher came up with two groups A and B. in decomposing the mean earnings gap between the two groups identified above, the calculation would be as follows.

Wa Wb = {(Xa Xb)βa + (Za Zb)ɤa}+ {Xb (βa –βb) + Zb (ɤa- ɤb)}()

(Xa Xb) βa will capture the impact of difference in individual characteristic, which is weighted by parameters taken from model for the first group (a). (Za Zb)ɤa will capture impact of difference in characteristics of workplace in which groups a and b work weighted by parameters from model for the group a. {Xb (βa –βb) + Zb (ɤa- ɤb)} is the remaining gap that is unexplained.

As was stated above, the decomposition involved a number of variables. The variables included the employee occupation, industry size, the quality of the employee (in terms of educational level, experience gained, and such other related characteristics), and industry. From Table 4, it can be seen that the earning gap between male and female in the private sector for the married couple is -0.0016106784687, while that in the public sector is -0.001213658304. In the private sector, the earning gap between female and male with children less than 2 years 0.18 percent, while the value in the private sector is 0.03 percent. These figures emphasize the fact that this gap is bigger in the private sector than it is in the public sector. The values from this analysis therefore confirms the hypothesis made earlier in the previous chapters that the earning gap between the two genders is bigger in the private sector than it is in the public sector. For the employees with children under 19 years, the earning gap between male and female in the private sector is 0.82 percent, while that for those in the public sector is 1.32 percent. This supports the facts in the literature review, which demonstrated that more private sector employees get such benefits as paying of school fees for their children than it, is in the public sector. The gap is therefore bigger in the public sector because whilst other employers do not give this benefit, others do, and more female stand a better chance to get this benefit than men do.

The earnings gap based on age was found to account for the least percentage in the private sector than in the public sector. In the private sector, this value was 0.06 percent, while in the public sector was 0.14 percent. This was because in the public sector, most of the employees’ salary increases as they continue with their stay in the institutions as they raise in the job groups. This is a little different from what happens in private sector where an employee is less likely to stay for longer periods in one firm. Based on the quality of the employee, the results in Table 4 shows that men would always earn more than women both in the public and in private sector, hence the negative values. However, when the basis of this calculation is on the twelve regions in the Britain identified in this research, the value can be positive or negative, meaning that women may earn more or vice verse. The same is the case with firm size, industry that an employee works in and occupation.

There are other factors that would bring about the difference in the earnings but do not clearly come out consistently as factor that would bring about differential change. These factors are categorized as unexplained. In the private sector, gap between female and male based on the unexplained factors is 31.64 percent, while in the public sector this value is 54.20. this can be attributed to the fact that in public sector, factors that clearly come out as a reason of the earnings difference have clearly been addressed through various public policies. However, there are some hidden reasons that still result in this gap. These factors are generally unexplained, hence the huge percentage. In the private sector, this value is comparatively low, because there are other explained factors adding up to differential earnings.

Sensitivity Analysis

In every research findings, the correctness is always very important because an action may be taken upon the findings and recommendations of a given research. In case the result deviates from the truth by a considerable wide margin, it can result into serious consequences, especially if the action taken is of great impact (Lazear 2000, p. F621). However, it is worth appreciating that human being is prone to making errors in a number of occasions. This error can be in the process of input of the data or its analysis. Whichever point it may arise from, the consequences of such errors may be adverse if action were to be taken upon its recommendation. Sensitivity analysis is therefore important in mitigating such errors in a report. It helps in determining how robust a given research is.

In this study, the researcher appreciates the fact that such errors may occur. For this reason, there is need to develop measures that would help validate this research.

In this research, the main aim was to compare the male and female branches of Samba Financial Group. However, this could only be done if there was a comparable difference between male and female branches of the bank. Reliability and Validity studies below help further explain how this research ensured that it maintained correctness of the findings.

Validity

The validity of a measurement instrument can be measured by the degree to which the instrument measures accurately what it is supposed to measure In this survey, content validity was measured where the representativeness, or sampling adequacy, of the content of the measurement instrument was checked with the help of experts in the field. In this study, the validity of the instruments was preserved ensuring the accuracy of the measurement where each variable’s indicators of existence were extracted solely from the literature of the work of previous researchers in well-established papers.

The population characteristics, interaction of subject selection and research, descriptive explicitness of the independent variable, the effect of the research environment, researcher effects, data collection methodology, the effect of time have all been taken into account. In this study, internal validity was ensured through checking the representativeness of the sample. The researcher ensured that the sample used, captured all-important characters wage differential in both public and private sectors across the genders. External validity was ensured through triangulation that is, the researcher used more than one technique in collecting data. Other than the questionnaire, the researcher observed the two sectors to assess if there was a difference in facilitation. External validity was also guaranteed by asking respondents to give their views.

Reliability

Reliability means appropriateness, applicability and truthfulness of a study. It refers to the ability of research instruments to produce results that are in agreement with theoretical and conceptual values (Stewart 2003, p. 742). The consistency of the measure, the probability of obtaining the same results again if the measure was to be replicated is referred as reliability (Trinder 2007, p. 56). It is the relationship between the true underlying score and the observable score. Internal consistency is also important for the survey since it indicates the extent to which the items in the measurement are related to each other. The most commonly used index of internal consistency is Cronbach’s alpha coefficient. This index ranges from zero to one, where a reliability of zero means no relationship, and reliability of one indicates a perfect and positive relationship. Since the reliability declines as the length of the question increases, the questions would be designed to be straight to the point. The idea behind internal consistency procedures is that questions measuring the same phenomenon should produce similar results. In internal consistency reliability estimation, single measurement instrument is administered to a group of people on one occasion to estimate reliability. The overall consistency of the customers’ questionnaire in this research was closely observed to ensure that the questionnaire was reliable.

Conclusion

The Great Britain is one of the leading European Nations with the lowest unemployment rates in the world. The country is one of the developed nations with its population having high living standards. There are two main employers in this country, the public sector, and the private sector. Although the government, through the public sector, employs a good number of people in various institutions, this only makes 27 percent of the total employees of this country. The private sector absorbs about 77 percent of the working population in the country. The citizens of this country working abroad were not within the scope of the study. This is because of different working environment and other factors that make their working environment different from those working within the country.

Based on the analysis of data above, the earning gap of employees in Britain working on a full time basis is averagely 14 log percent. However, this figure is just an average. Some factors are assumed constant. A further analysis of the data reveals that there is a wider gap between female employees working in private sector and those in public sector, as opposed to the difference in men working in the two sectors. As presented in the above analysis, the gap between employees in the private sector is almost three times wider than that of the public sector. This can be attributed to the fact that the private sectors widely vary in size and capacity to pay the employees.

This research has demonstrated that there is a difference in earning of the employees in the public and private sectors. This difference in earning is also based on the gender. Although the country is one of the leading democracies in the world, with a society where equality is cherished, it is evident that there is a gap between them. This is based on various factors. The occupation of the two genders makes this difference come out clearly. Women do not prefer some occupations like technicians, engineers, architectures, masons and many other jobs that demand physical might and many drawings. As such, most of those who do them are men. Similarly, men do not prefer such occupations as clerical officer, chefs, customer care, and such other light duties that involve a lot of sitting. As such, majority of those doing these jobs are women. This is one of the bases of the difference in earning differences. Generally, it is believed that the difference in earning is based the level of education of the employee, the experience, occupations and such other factors. This research however, reveals that this applies mostly for the male employees than it does female employees.

A number of factors cause earning differentials. From the results presented in Table 2, it can be seen that employees earning are pegged on factors such as productivity of the employees at the workplace and performance of the employees. Another factor that has been proven to be related positively to earnings is the family-friendly policy. The policy that allows employees to be paid full weekly wage when on leave (sick leave, annual leave, maternal or paternal leave) is one of the best family-friendly policies currently in use in this country. The research shows that this policy is common in public sectors than it is in the private sector. This partly explains the difference between the two sectors as demonstrated in Table 3. As such, it would be true to say that, policies in the public sector are friendlier than in the private sector.

The gender earnings gap in the private sector is based on a number of factors. The analysis above shows that one such factor is the size of the organization. There is a difference in the earnings of employees in small sized firms, medium firms and large sized firms. These firms are defined in Table 1. Averagely, large sized private organizations pay a lot better than smaller ones. However, a finer analysis of these private firms reveals a different trend. Large private firms that employ more women at lower levels tend to pay the least wages. Those middle-sized firms with most of their employees being professionals like engineers, accountants, or marketers tend to pay the highest remuneration to their employees.

The nature of the jobs

Occupation of the employees in the private sector would bring the earning differentials. The analysis in the above chapter reveals that female employees in the private sector earn more as compared to the public sector. Although this is a common trend confirmed by WERS08 data, a concrete fact to support this trend is not readily available from these sources of data. It was also noted that men with lower academic qualifications averagely earn higher as compared to women in the same capacity. Although the data pointed out to the physical strength of men as a factor, which is important to the lower cadre employees, hence the higher pay, other concrete data to support this trend is also missing.

The analysis of the data was also done based on twelve regions named in Table 1. The data shows that on average, employees in London, especially private firms, earn the highest salary as compared to other regions. The main reason given for this in the data collected is that most private firms in this region are well establish and have higher capacity of remunerating their employees better (Almeida-Santos, 2005, p. 321). In the public industries, the pay difference comes out strongly based on the industry. The results in Table two shows that, on average employees in the finance industry are the best paid. However, the construction industry had the largest discrepancy. The gap between the highest paid individual in the construction industry and the least paid is very large.

Another basis that brings about differentials in the earnings is the size of the family. Some firms undertake to educate children of their employees. This policy is more common in private firms than it is in public institutions, though the data shows that some few organizations practice this. This policy is mostly meant to motivate employees and develop a strong bond between the employees and the firm itself.

The gap in the public and private sector s based on gender is clearly given in Table 4. The data shows that men earn higher than women do. It is also true from this data that marital status do not affect the pay of an individual. Most companies, both in the public and private sector, would demand to know the marital status of their employees. However, this does not result in a difference in earning.

It is also important to note that most employees in the United Kingdom are not unionized. The least number of the employees (about 32 percent), are in the unions. This is attributed to the fact that most unions are not meant to push for increment of pay, or better working environments. Most of them are welfare groups meant to improve lives of employees.

The main factor that this research attributes to the earning gap that exists between full time men and women employees in the United Kingdom is gender. Although this society has been in the frontline fighting against gender inequality and any form of discrimination at workplaces, especially based on gender, there is still evidence that shows that male and female employees are treated differently. The legislation on Equal Pay was lauded as one of the best steps that the country made towards ensuring that the society is free from any form of discrimination. However, it is clear from the analysis done above that the effect of this legislation is yet o be felt in this country. This has necessitated the need for better legislative measures that would help narrow down this gap. It is a relief that the parliament recently came up with a legislation that would further reduce this gap.

Gender Equality Duty, which was recently made effective, seeks to eliminate all discriminative policies at the public facilities in all fronts. This policy seeks to make the public workplaces an environment that is free and fair to all employees irrespective of their gender. If successfully implemented, there are high expectations that the earnings gap that exists in the public sector would drastically drop. However, an equivalent policy would be needed to cover the private sector that still looks unregulated. As discussed in the literature review, although this earnings gap based on gender is still evident in this country, it would be important to note in this closing remark that there has been a great improvement within the last two decades in the fight to close this gap. Given the effort taken by various stakeholders to close this gap, the trend demonstrated in this research shows that the earning gap based on the gender difference would soon cease to be. This way, we would have a society where employee’s earnings would be based on their capacity, qualification, and nature of the task, and not on gender.

Implication for Theory and Practice

In any research, the most important factor that is usually considered to determine the success is its implication on various factors. A piece of research is meant to add knowledge in a the specific field under investigation. In this particular research, it was very important to shed more light on a number of theories that exist in relation to the topic of the research. The result from this research confirms a widely held belief that the society still holds male members of the society with a higher esteem as compared to women. It is true that the world society, and especially in United Kingdom, have successfully fought against discrimination of women in whatsoever context. It is also true that from this fight, the gap between these two genders have successfully been eliminated. However, the wage differential still shows that women are yet to be considered as equal to men. Although there are professions where women earn more than men, the fact still is that on average, men are better remunerated then women. It would therefore take the effort of all the concerned individuals to ensure that women and men are considered as equals. As such, any benefit, remunerations included, should be given out based on credentials and ability to achieve the employer’s goals and objectives. This would ensure that all employees are motivated. This would also eliminate any unnecessary industrial disputes, which may affect the productivity of the employees.

This research also has some implication on practice. It is evident from the research that although the earning difference between the two genders has considerably been narrowed down, the difference between the highest paid employee and the least paid employee is still massive. An equal effort should be made to ensure that this difference is narrowed. This would help spread the wealth of the country other than having the few becoming richer as the majority wallow in poverty. This would help in the economic growth of the country. This research is also important to future researchers. The researcher has comprehensively looked at this field and clearly spelt out various factors that are related to the earnings gap between employees in the public sector and those in the private sector. This piece of research would therefore act as a foundation to their research. It would give them insight of what this field is like. It therefore adds up as one of the important literatures in this field.

Appendix

Table 1: Variable Definitions.

Variable Name
real_hourly_pay_2009
log_rhpay_2009
child_under2
child_2to4
child_5to15
child_under16
child_age_youngest
child_number_under19
married
qualdgroup
Variable Definition

Real hourly gross pay.
Natural log of real hourly gross pay.
One or more dependent children in family aged under 2
One or more dependent children in family aged 2 but under 5
One or more dependent children in family aged 5 but under 16
One or more dependent children in family aged under 16
Age in years of youngest child under 19 from ayfl19.
Number of dependent children under 19 from fdpch19
Married (and living together) or cohabiting, heterosexual
Highest qualification (0 lowest, 5 highest) includes vocational qualifications
0 No qualifications
1 Other qualifications
2 GCSE A*-C or equivalent
3 GCE A Level or equivalent
4 Higher Education
5 Degree or equivalent

fsize_small
fsize_medium
fsize_large
Small sized firm, under 25 employees
Medium sized firm, 25-499 employees
Large sized firm, 500 or more employees
soc2000_1_digit Occupation groups, SOC2000, 9 groups
1 Managers and senior officials
2 Professional occupations
3 Associate professional and technical
4 Administrative and secretarial
5 Skilled trades occupations
6 Personal service occupations
7 Sales and customer service occupations
8 Process, plant and machine operatives
9 Elementary occupations
occ_nssec_8 Occupation (8 groups) based on nsecm (NS-SEC))
1 Employers and higher managerial and professional occupations
2 Lower man and professional occupations
3 Intermediate occupations
4 Small employers and own account
5 Lower supervisory and technical
6 Semi-routine occupations
7 Routine occupations
8 Never worked and long term unemp)
Region group categorical variable for region of work (Standard Regions)
1 North
2 Yorks and Humberside
3 North West
4 East Midlands
5 West Midlands
6 East Anglia
7 London
8 South East
9 South West
10 Scotland
11 Wales
12 N. Ireland

Table2: Sample Mean by Gender, Region, Sector, and Family Characteristics.

Variable private public
female Male female male
mean s.e mean s.e mean s.e mean s.e
log_rhp~2009 2.163112 .519546 2.460895 .5638038 2.36677 .4784098 2.581474 .4674077
married .649415 .47716 .6884775 .4631224 .693095 .4612201 .7203644 .4488442
child_under2 .0662498 .2487218 .0689338 .2533453 .0559498 .22983 .06388 .2445521
child_2to4 .0988127 .2984147 .0903716 .2867176 .088155 .2835267 .0854234 .2795256
child_5to15 .2001902 .4001483 .1504377 .357505 .2456332 .4304718 .1714898 .3769566
child_und~16 .3934355 .4885191 .3126704 .463588 .415393 .4928009 .3275456 .4693432
child_age_~t 2.75183 5.634407 1.796441 5.173544 3.502001 6.107812 2.173741 5.525968
child_num~19 .6749755 1.172741 .5340508 1.243429 .7605986 1.24706 .5565916 1.348273
age 40.69748 11.03209 41.53055 11.40427 42.86863 10.1896 43.64009 10.53245
edage 17.55314 3.146269 17.88604 3.668647 18.16844 2.928085 18.48114 3.22948
health_kind .0801971 .271602 .0792079 .2700669 .0843341 .2778945 .0933548 .2909445
health_amo~t .062129 .2413931 .0534366 .2249058 .0633188 .243541 .0601286 .2377377
quald0 .1084664 .310973 .0757354 .2645781 .0529476 .223934 .0449089 .2071151
quald1 .1287246 .3348997 .1241498 .3297571 .0809225 .2727222 .065702 .2477738
quald2 .3029508 .4595408 .1797388 .3839753 .2143832 .4104031 .1534834 .3604721
quald3 .1869921 .3899108 .2932702 .4552678 .1584334 .3651552 .2317256 .4219573
quald4 .0934816 .2911104 .0987516 .2983325 .1878184 .390576 .1288317 .3350316
quald5 .1793845 .3836795 .2283541 .419778 .3054949 .4606272 .3753483 .4842387
region1 .0564521 .230796 .0485292 .2148847 .0616812 .2405811 .0549839 .2279611
region2 .0922425 .2893722 .0984933 .2979848 .0968432 .2957508 .0972133 .2962639
region3 .096104 .294738 .0982637 .2976752 .106714 .3087563 .1024652 .3032753
region4 .0746355 .262806 .0766538 .2660451 .06996 .2550853 .0644159 .2455054
region5 .0830788 .2760052 .0902569 .2865535 .0895651 .2855642 .0787781 .2694066
region6 .0409486 .1981741 .0402927 .1966477 .0387555 .193016 .0428725 .2025804
region7 .1057 .3074576 .1239776 .3295607 .0947962 .2929399 .1275456 .333601
region8 .2039076 .4029069 .194002 .3954361 .1658479 .3719525 .1511254 .3581903
region9 .095153 .2934304 .0885349 .2840754 .0886099 .2841863 .0879957 .2833038
region10 .0912628 .2879865 .0851485 .2791066 .104849 .3063657 .1120043 .3153886
region11 .0393637 .1944616 .0389439 .1934641 .0538119 .2256512 .0500536 .2180672
region12 .0211515 .1438914 .0169034 .1289115 .0285662 .1665877 .0305466 .172095
fsize_small .4153075 .4927821 .3205912 .4667105 .2149745 .410814 .1461951 .3533206
fsize_medium .4529134 .4977851 .5058115 .4999734 .5175127 .4997046 .5613076 .4962537
fsize_large .1317791 .3382554 .1735974 .3787683 .2675127 .4426721 .2924973 .4549339
industry1 .0060515 .0775569 .011709 .1075743 .0005004 .0223637 .0022508 .0473918
industry2 .0091637 .0952892 .0244224 .1543589 .0005913 .0243108 .0051447 .0715456
industry3 .1174284 .3219347 .2704836 .444216 .0021834 .046677 .0071811 .0844413
industry4 .0225924 .1486021 .0871 .2819856 .0051401 .0715116 .0377278 .1905473
industry5 .2854879 .451653 .1819773 .3858314 .0115084 .1066604 .0050375 .0708002
industry6 .0512074 .2204237 .1112929 .314499 .0124636 .1109452 .0758842 .264827
industry7 .2209095 .4148656 .198766 .3990772 .0226074 .1486515 .0362272 .1868651
industry8 .2337617 .4232285 .0759076 .264854 .9093886 .2870622 .755627 .4297379
industry9 .0533975 .2248281 .0383412 .1920214 .0356168 .185337 .0749196 .2632757
occupation1 .1314622 .33791 .2134883 .4097754 .055222 .2284182 .1229368 .3283822
occupation2 .0763645 .2655842 .142603 .3496725 .2293031 .4203942 .2563773 .4366559
occupation3 .1176877 .3222427 .119845 .3247849 .2166121 .4119454 .2766345 .4473581
occupation4 .2372486 .425402 .0473526 .2123949 .2034207 .4025519 .0974277 .2965551
occupation5 .0202006 .1406879 .1611422 .3676673 .0083697 .0911046 .045552 .2085226
occupation6 .1112904 .314496 .0196298 .1387264 .1883643 .3910117 .0651661 .246832
occupation7 .1540545 .3610062 .0425886 .2019307 .0100073 .0995368 .0052519 .0722831
occupation8 .0337733 .1806477 .1406802 .3476963 .0025473 .0504077 .0357985 .1857974
occupation9 .1179183 .322516 .1126704 .316194 .0861536 .2805971 .0948553 .2930307

Table 3: Within Sector Earning Function.

Variable private public
female male female Male
log_rhp~2009 coeff t-vale coeff t-vale coeff t-vale coeff t-vale
married .0054089 1.22 .0424151 7.63 .0056526 1.12 .0389853 4.24
child_under2 -.0468843 -4.55 -.0121609 -1.05 -.011206 -0.95 .0002941 0.02
child_2to4 .0387767 4.31 .002339 0.22 .0677182 6.67 -.0005697 -0.03
child_5to15 -.024873 -2.95 -.0143965 -1.37 -.0260536 -2.85 -.0171321 -1.05
child_und~16 .0523552 5.91 .0865157 8.04 .0242855 2.52 .0457122 2.74
child_age_~t -.0004547 -0.79 .0019447 2.84 .0004575 0.83 .0050859 4.96
child_num~19 -.0085733 -3.17 .0012066 0.45 -.0099285 -3.56 -.0019573 -0.50
age .0042944 19.77 .0063869 28.76 .006825 26.46 .0067551 17.37
edage .0024509 3.00 .0026579 3.60 .0126159 12.12 .0129817 8.55
health_kind -.0298031 -2.57 -.0498318 -4.13 -.0306925 -2.48 -.0522388 -2.95
health_amo~t -.0533418 -4.08 -.0755233 -5.22 -.0115362 -0.82 -.0455059 -2.10
quald0 -.188317 -18.79 -.2033648 -17.60 -.2160004 -16.89 -.1509225 -6.89
quald1 -.1482384 -16.06 -.137368 -13.61 -.1614434 -15.46 -.0757627 -4.14
quald2 -.0965831 -12.02 -.0817634 -8.86 -.1233432 -15.22 -.0196793 -1.37
quald3 -.0646819 -7.73 -.0510356 -6.05 -.0992954 -12.08 -.0132967 -1.02
quald5 .1125132 12.71 .1239731 13.73 .0695385 9.39 .0978816 7.64
region1 -.0212799 -1.58 .0121869 0.80 -.0043815 -0.33 -.0276639 -1.23
region2 -.0250808 -2.03 .0149469 1.12 -.0121872 -1.01 -.0106924 -0.53
region3 .003073 0.25 .0327202 2.44 -.0080518 -0.68 .0013907 0.07
region4 -.0096304 -0.76 .0186802 1.34 -.0150824 -1.17 .0105699 0.49
region5 .0035555 0.28 .0161468 1.19 -.0014164 -0.12 -.0171395 -0.82
region6 .0135662 0.94 .0434066 2.73 -.0097915 -0.65 .0063041 0.26
region7 .2766632 22.57 .278052 21.11 .1673994 13.70 .1852208 9.59
region8 .0878581 7.78 .1341691 10.77 -.0074169 -0.66 .0277178 1.48
region9 .0021432 0.17 .031035 2.28 -.0440484 -3.58 .007061 0.35
region10 .0127621 1.03 .0438127 3.19 .0093831 0.79 .0285495 1.46
region12 -.002187 -0.13 -.0347307 -1.68 .0060058 0.36 -.0199626 -0.75
fsize_small -.2113513 -31.06 -.2760436 -39.31 -.082514 -12.12 -.1315132 -10.86
fsize_medium -.1194882 -18.28 -.126033 -19.88 -.0451424 -8.09 -.0520656 -6.19
industry1 -.1952143 -5.71 -.2813477 -11.06 -.0726231 -0.53 -.2790969 -3.04
industry3 -.0782574 -3.49 -.1261411 -8.40 -.0041032 -0.04 -.0987346 -1.48
industry4 -.0283014 -1.11 -.0587083 -3.59 .0307858 0.32 -.0994958 -1.84
industry5 -.2498928 -11.36 -.2865631 -18.50 -.1380183 -1.45 -.2570781 -3.56
industry6 -.0734581 -3.15 -.1295418 -8.11 .0515717 0.54 -.0792451 -1.50
industry7 -.0320968 -1.46 -.0690402 -4.49 .0016249 0.02 -.12712 -2.33
industry8 -.1804637 -8.15 -.2574336 -15.29 -.0396533 -0.43 -.1271488 -2.48
industry9 -.1823184 -7.78 -.2670968 -14.42 -.0935475 -1.00 -.2575561 -4.89
occupation1 .5484406 40.40 .5261662 61.93 .5933723 12.94 .4802551 20.61
occupation2 .5891833 38.66 .4468415 45.19 .583354 12.86 .4184732 18.02
occupation3 .3945665 28.58 .3360013 35.09 .4314643 9.56 .2690373 12.18
occupation4 .2147297 16.68 .0680677 5.53 .1603408 3.56 .0326611 1.37
occupation5 .0817731 4.38 .1454005 16.89 -.0384496 -0.75 .074914 2.86
occupation6 .0342235 2.38 -.0277371 -1.54 .0610175 1.35 -.1313993 -5.29
occupation7 .0561435 4.15 -.0165083 -1.27 .1421 2.84 -.0134313 -0.25
occupation9 -.0351217 -2.61 -.1283184 -14.03 -.1078186 -2.37 -.1279446 -5.57
_cons 2.016071 60.56 2.133563 79.12 1.664086 15.69 1.911484 29.05

Table 4: The Gap.

PRIVATE sector Public sector
Variable The gap between female and male
Explain variable
married -0.0016106784687 -0.0012136358304
child_under2 0.0018314179688 0.0003055808964
child_2to 4 -0.0001040766628 -0.00053701886964
child_5to15 -0.0002099554803 -7.116801376E-05
child_und~16 0.002604802088 0.0018006095407
child_age_~t -3.672389097E-05 4.01901855E-05
child_num~19 -0.0081908365137 -0.01318762941
age 0.00060518703168 0.001392347775
edage -0.002041771263 -0.009732662214
health_kind 0.00992145199 0.00959754475
health_amo~t -5.276570856E-05 0.00010406459934
quald0 -0.0016369266908 -0.00068908447608
quald1 -0.0048519910704 -0.0012977950596
quald2 -0.00044184836588 -0.0018773451756
quald3 -0.0079695862628 -0.0060470700009
quald5 -0.011957689121 -0.0050966296497
region1 0.001042068191 0.0003060626721
region2 -0.00019871267032 -8.162133456E-05
region3 -1.92087084E-05 2.97997118E-06
region4 2.079877488E-05 -6.408210112E-05
region5 -7.17606565E-06 -7.85266324E-06
region6 -9.737954022E-05 -0.0001056209105
region7 0.00018146339288 -0.0006891833298
region8 -0.0016058352086 0.00024289902486
region9 2.122968192E-05 -0.000648502569
region10 8.446085401E-05 5.76310002E-06
region12 -1.33719741E-05 -4.297330074E-05
fsize_small -0.00089784145753 0.0001634107256
fsize_medium -0.011317480198 -0.0031048671866
industry1 0.0081635301617 0.0018144591043
industry3 0.0004427412405 7.18224128E-06
industry4 0.0043316764373 -0.00015385819266
industry5 0.016119984785 0.0044976989549
industry6 -0.0076036920059 0.00033371531353
industry7 0.0019285522764 -0.00010305213294
industry8 -0.003996097941 0.00054007001534
industry9 -0.028779706945 -0.014384013276
occupation1 0.0082574862058 -0.023321192832
occupation2 -0.048328408284 -0.039501699439
occupation3 -0.02613549311 -0.011681550751
occupation4 -0.00046323638181 -0.0096240396339
occupation5 0.015528384598 -0.0040753884528
occupation6 -0.0048235148476 -0.0022687709903
occupation7 0.0051461468961 0.01750646422
occupation9 -0.0039148719 -0.00051272057044
unexplained 0.31637103483 0.54200386231

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1. IvyPanda. "Gender Wage Differentials in Public and Private Sectors." April 5, 2021. https://ivypanda.com/essays/gender-wage-differentials-in-public-and-private-sectors/.


Bibliography


IvyPanda. "Gender Wage Differentials in Public and Private Sectors." April 5, 2021. https://ivypanda.com/essays/gender-wage-differentials-in-public-and-private-sectors/.

References

IvyPanda. 2021. "Gender Wage Differentials in Public and Private Sectors." April 5, 2021. https://ivypanda.com/essays/gender-wage-differentials-in-public-and-private-sectors/.

References

IvyPanda. (2021) 'Gender Wage Differentials in Public and Private Sectors'. 5 April.

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