The Income Gap: The scale and causes of pay inequality for young women in the UK

Young women earn less than young men from the start of their working lives. We have analysed official labour market statistics to understand the extent of the pay differences between young women and young men, and their causes.


We commissioned economists at Braw Data to conduct a statistical analysis of data from the UK Labour Force Survey collected by the Office of National Statistics. Using the data, gender pay gaps were estimated with multivariate modelling of both hourly pay and annual earnings for men and women, conditional on a range of individual, job and employer characteristics.


There’s more to financial inequality than the official gender pay gap.

Official gender pay gap statistics mask the truth of the divide between men and women’s pay, particularly at younger ages.

For young women, the gender pay gap – calculated as the difference in hourly pay between men and women – looks relatively small at 2.25%.

But the gap in annual income tells a different story, with young women aged 18-30 taking home, on average, a fifth less per year than a man of the same age.

That’s a huge £4,194 per year difference. The average median salary for a young man aged between 18-29 is £21,582, compared with £17,388 for a young woman.

In this analysis, we have looked at both hourly pay and annual pay.

The gender pay gap is smaller for younger workers, but grows over time.

Chart: The gender pay gap starts in younger age, but widens dramatically from about age 30The graph above shows how the median average pay for both men and women varies according to age.

The gender pay gap (shown here in terms of hourly pay) widens gradually throughout workers’ 20s, and grows even more from there.

The dynamics set in motion at this early stage of working life, which are explored below, contribute to this widening gulf.

By understanding the causes of the gap for workers in their 20s, we can find solutions which will tackle the problem early.

What causes the annual income gap?

Chart: Factors contributing to the gender pay gap (age 16 to 30)

The graph above shows the key factors contributing to the gender pay gap and their impact (as a percentage) on the pay gap. Those above zero increase the gender pay gap and those below zero reduce it.

About one fifth of it is down to men and women going into different jobs and sectors.

Women are more likely to work in industries where pay is lower overall, or where the types of jobs that women tend to do are lower paid.

For young women, the sector that is the biggest driver for the pay gap is information and technology – a higher paid industry which men are more likely to work in.

Meanwhile, all of the top 5 sectors employing young women rank amongst the top 10 lowest paying sectors.

The top 6 lowest paid industries where young women are concentrated are:

  • Health and social work
  • Wholesale and retail trade
  • Hospitality
  • Other service activities (this includes membership organisations, trade unions and politics, hairdressing, and physical wellbeing activities such as gyms)
  • Admin and support services (this includes call centres, office administration, conferences and events, cleaning and tourism)
  • Arts, entertainment and recreation.

Health and social work is included, but is an outlier in that, while the pay here is higher, around 81% of health and social care employees are female, while the gender balance across the industry generally is close to 50/50 in the other 5 sectors listed.

Women are getting funnelled into lower paid jobs and sectors right from the beginning and then getting stuck there – so where women go in the 18-22 age range has huge implications for their future.

Meanwhile, many young women are in industries which aren’t necessarily low paid, but which have big pay gaps.

The top 5 industries with the biggest pay gaps for workers aged under 30 are:

  • Electricity and gas
  • Financial and insurance
  • Mining and quarrying
  • Other service activities
  • Professional, scientific and technical activities (this includes things like law, accountancy, engineering, management consultancy and PR).

Chart: Women are concentrated in lower-paying industries with bigger gender pay gaps

The graph above illustrates the extent of the gender pay gap in the top 10 industries where the most young women are concentrated. The size of the circle represents the number of young women and young women working in each industry, and the line between the two circles represents the size of the pay gap. The larger the line, the bigger the pay gap.

More information on the classifications of industries used is here: Nature of business: Standard Industrial Classification (SIC) codes (

About two thirds of the income gap occurs because women are paid less even when working in similar jobs and sectors and having similar characteristics.

For example, a woman with children working in the same sector as a man would face more of a financial penalty for having children. A man working in the same sector as a woman would get more of a premium for being in a job for a long time. Men and women get different payoffs or financial penalties even when they are in all other respects the same. Having children is a key factor here. Women with children also have their progression impacted when they take time out of the workplace, and they can face discrimination.

The triple-whammy effect of part-time work 

Women are more likely to work part time and therefore work fewer hours, and part-time jobs are lower paid and harder to progress in. 

Chart: Part-time job pay less than fulltime and the gender pay gap is bigger in fulltime workers

The graph above shows how median hourly pay changes according to the number of hours worked. The length of the line also illustrates the extent of the gender pay gap. The graph clearly shows a sharp increase in hourly pay when moving from ‘part time’ to ‘full time’ hours, as well as a gender pay gap that shifts from slightly favouring women to favouring men.

Chart: Even for younger workers, women are more likely to work in part-time jobs

The graph above also illustrates the difference in hourly pay between ‘part-time’ and ‘full-time’ hours. It shows how women are concentrated in part-time (and therefore lower paid) roles and men are represented more in full-time positions.

The effect of education

If men were educated as highly as women are on average, the pay gap would be even bigger. Significantly more than half of employees with degrees are women, but the extra pay from having a degree is lower for women than men. This means that the gender pay gap is understated by the effect of education. Young women are more likely to have a degree and so this pulls up their average pay – but still doesn’t close the pay gap.

Young women are more likely to have a degree, and they work fewer hours (and therefore earn less) while they are studying. So they’re investing in their futures but not getting the same return from it that men do – in the 18-30 age group, men get paid more for having a degree than women do.

The effect of length of time in a job

Men seem to receive a higher premium for longer service than women and this is more pronounced in the 18-30 age group – likely because men are progressing more quickly than women.

Young women are setting out on an unequal path

Earning less at this early stage of their working lives has long-lasting effects on women’s finances.

For example, it could mean they take on more debt and so have less money in their pockets over many years while they repay it, making it harder for them to escape poverty, and affecting their ability to save and get on the property ladder.

In this way, along with being funnelled into lower paid sectors, taking up more part time work which has poorer progression prospects, and progressing more slowly than men, the dynamics causing financial inequality over a whole lifetime start young and grow over time.