A lack of childcare keeps the gender pay gap wider than it should be

Although the gender pay gap^[1] is not as big as it used to be, women still earn less than men. In the UK, it currently stands at 7% for full-time workers^[2].

Simple discrimination is part of the story, of course, and equality legislation is in place to try and redress that. But there are plenty of other reasons too.

These include women not being as good^[3] as their male colleagues at bargaining for higher wages. Women also tend to have lower salary expectations^[4] and are less likely to seek promotions^[5].

But what about the effect of where women live? Regardless of gender, workers earn higher wages in cities than in rural areas. This discrepancy is known as the “urban wage premium”^[6].

My research^[7] looks at whether the urban wage premium in Britain differs by gender. I wanted to see whether the relative benefits of working in cities for women could provide clues about how to further reduce the gender pay gap more generally.

The data I used – which covered 200,000 people, their wages, the jobs they do and where they do them – revealed that until the financial crisis of 2008, the urban wage premium had been considerably higher for women than for men.

In other words, in terms of wages, urban women outperformed rural women significantly more than urban men outperformed rural men, even comparing similar workers doing similar jobs.

This gender difference was linked to the fact that cities offer certain facilities that are not as prevalent in rural areas, such as childcare and extensive public transport. These services boosted urban women’s wages by improving their ability to achieve better paid roles.

However, the study also showed that since 2008 the trend has completely changed.

Now, for women and for men, employees of the same age and working in similar jobs in the same industry earn only about 1% more per hour in cities than in rural areas. This is down from 2.8% for women and 1.2% for men.

So women’s urban wage premium has dropped considerably, largely because urban women’s wages are no longer disproportionately boosted by access to shared facilities in cities.

This suggests that unaffordability, or the lower quality of childcare and transport in cities over the last 16 years have played a role. It is also a period when policies included cuts to childcare initiatives^[8] that are predominantly located in urban areas.

With the expansion of free childcare hours having just been introduced^[9] by the government in September 2024, nine-month-old children are eligible for 15 hours of state-funded childcare per week. This is a limited intervention, but it could help reverse the trend.

For we already know that career interruptions to have and care for children are a big factor^[10] in mothers’ poor wage progression compared with fathers. Also, gender norms still put much of the mental load of child rearing on women.

This means working mothers tend to search for jobs that are close to home, or to where their children spend the day, rather than searching for the best paying job. This creates a vicious cycle of low pay and limited opportunities.

My research reveals another worrying inequality. Women who switch from an urban to a rural job incur a wage growth penalty. This is because on average, they end up in a lower type of role with a lower-paying employer.

In contrast, men actually experience a wage growth increase when they switch from an urban to a rural job. They also tend to switch to a higher-paying employer.

This implies that compared with men, women are particularly constrained in the type of occupation and employer they get in rural areas.

One reason for this could be that the types of jobs available in rural areas are unlikely to match the jobs that relocating women were previously performing in the city. For example, a woman may be moving from London where she was a manager in the services sector, to a rural area where the only jobs available are in male-dominated industries where she ends up accepting a non-managerial job, causing a hit to her wage growth.

But also, many women who move to rural areas do so for family reasons, typically after the arrival of children. Due to the limited childcare availability in rural areas, and the gender norms about childcare, women become geographically constrained in their job search.

So a combination of inadequate childcare provision and gender roles still hold back progress towards a genuine closure of the gender pay gap. Since gender roles are perhaps slower to evolve, more government support for childcare provision would be the quickest way to further close that gap. And increasing its availability in rural areas would make a major difference to women who live outside the UK’s towns and cities.

References

1. ^{^} gender pay gap (www.equalityhumanrights.com)
2. ^{^} 7% for full-time workers (www.ons.gov.uk)
3. ^{^} not being as good (academic.oup.com)
4. ^{^} lower salary expectations (www.forbes.com)
5. ^{^} seek promotions (onlinelibrary.wiley.com)
6. ^{^} “urban wage premium” (www.sciencedirect.com)
7. ^{^} My research (doi.org)
8. ^{^} cuts to childcare initiatives (eprints.lse.ac.uk)
9. ^{^} introduced (educationhub.blog.gov.uk)
10. ^{^} big factor (www.journals.uchicago.edu)
11. ^{^} FamVeld/Shutterstock (www.shutterstock.com)