Women and part-timers losing the earnings race

What sex you are, whether you work part time and where you live are all critical for your chances of social mobility, according to a major new study published today by the independent think tank the Resolution Foundation. The report, Snakes and Ladders, finds that women, those working part-time and those outside of London are losing out.

The study follows the earnings of around 10,000 people, one group born in 1958 and one group born in 1970. It looks at what determines their chances of moving up or down the earnings scale as they move from their early 30s to their early 40s, during the 1990s and the 2000s, and compares the two groups.

While the study shows an overall increase in the probability of moving significantly up the earnings distribution in the 2000s compared to the 1990s, it finds some groups losing out:

• Women fared significantly worse than men during both decades. Men were up to 50% more likely to move up the earnings scale, and women were also more likely to move down.
• Part-time workers were up to 90% more likely to move down the scale than full-timers, and the part time penalty increased from the 1990s to the 2000s.
• Those living outside London – in particular those in the North East, the North West, the East Midlands and the South West – were less likely to move up and more likely to move down the pay scale than those in London.
• The penalty for a spell of unemployment increased between decades; those unemployed for a time in the 2000s were 2.2 times more likely to move down the earnings scale than those who remained fully employed throughout.

The study also details results on the critical important of higher education, showing that as the numbers entering higher education grow, those with just A levels or GCSEs are increasingly likely to move down the pay scale.

Gavin Kelly, chief executive of the Resolution Foundation said:

‘It’s encouraging that there was a greater chance of earning your way up in the 2000s compared to the 1990s, but the fact that women are still losing out by so much compared to men, and those working part-time are losing out even more than they were in the 1990s, is very worrying.’

‘It adds up to a daunting picture for those on low-to-middle incomes who are more likely than those higher up to get stuck on the earnings ladder’

Notes to editors:

The research follows two groups of workers, born in 1958 and in 1970. It examines their earnings during the 1990s and the 2000s respectively, focusing on their ‘peak earning’ period between the ages of early 30s to early 40s.   Data on the group born in 1958 is from the National Child Development Study – sample size of 5,683. Data on the group born in 1970 is from the British Cohort Study – sample size 4,403.

For each group, the study examines the individual influence of gender, part time work, geographical region, unemployment, occupation and education on the relative likelihood of someone moving up or down the earnings scale.

It examines the influence of each factor independently – so, for example, the results on the impact of gender are independent of the different levels of education or occupations of men and women.

The study uses hourly earnings and defines earnings mobility as moving up or down the earnings distribution by at least one quintile.

Summary of significant results:

Gender

In the 1990s men were 51% more likely to move up than women. In the 2000s men were 40% more likely to move up than women.

In the 1990s women were 41.6% more likely to move downwards than men. In the 2000s women were 38.4% more likely to move down than men.

Part time work

In the 1990s those who worked part time through the period were 76.9% more likely to move down than those who worked full time, increasing to 87.3% in the 2000s.

Region

In the 2000s, compared to London, those living in all other regions were less likely to move up and move likely to move down.

North East 52.5% less likely to move up.

North West 34.4% less likely to move up.

East Midlands 48.7% less likely to move up.

South East 31.3% less likely to move up.

South West 37.2% less likely to move up.

Scotland 35.7% less likely to move up.

Unemployment

In the 2000s those who experienced a spell of unemployment were 123.3% (2.2 times) more likely to move down than those who remained fully employed.  In the 1990s those who experienced a spell of unemployment were 79.1% more likely to move down than those who remained fully employed

Occupation

Compared to managers and administrators:

In the 2000s, professionals were 54.7% more likely to move up.

In the 2000s, associate professionals were 50% more likely to move up.

In the 1990s craft and related (e.g. builders, electricians) were 38.7% more likely to move down.

In the 1990s personal and protective services (e.g. security guards and careers) were 37.8% less likely to move up.

In the 2000s plant and machines operatives were 78.2% more likely to move down.

Education

Upward movement

In the 1990s, compared to those holding a degree: those with A levels (NVQ level 3) were 37% less likely to move upwards, those with GCSEs (NVQ level 2) 36.2% less likely to move upwards, those with NVQ level 1 49.4% less likely to move upwards and those with no qualifications 53.8% less likely to move up.

In the 2000s, compared to those holding a degree:  those with A levels (NVQ level 3) were 36.6% less likely to move upwards, those with GCSEs (NVQ level 2) 34.3% less likely to move upwards, those with NVQ level 1 46.6% less likely to move upwards and those with no qualifications 52.2% less likely to move up.

Downwards movement

In the 1990s, compared to those holding a degree: those with A levels (NVQ level 3) were 20.1% more likely to move downwards, those with GCSEs (NVQ level 2) 42.2% more likely to move down, those with NVQ level 1 60.5% more likely to move down and those with no qualifications 90% more likely to move down.

In the 2000s, compared to those holding a degree: those with A levels (NVQ level 3) were 49.6% more likely to move downwards, those with GCSEs (NVQ level 2) 67.5% more likely to move down, those with NVQ level 1 95.3% more likely to move down and those with no qualifications 132.9% (2.3 times) more likely to move down.

16% of people in low to middle income households hold a degree compared to 39% of people in higher earners (Resolution Foundation, ‘Squeezed Britain’ 2010)

The Resolution Foundation’s first report on social mobility Moving on Up? Social Mobility in the 1990s and 2000s, was published in March 2011. Overall this found a 22 percent increase in the probability of moving significantly up the earnings distribution in the 2000s compared to the 1990s. Lee Savage, research and policy analyst at the Resolution Foundation, is the author of both reports.

A social mobility event with David Willetts MP, previewing some of these results, was held earlier in September.

The Resolution Foundation is an independent think tank working to improve the lives of people on low-to-middle incomes. This includes 11 million adults in 6 million households with gross household incomes of between £12,000-£30,000 for a couple with no children and up to £48,000 for a couple with 3 children www.resolutionfoundation.org