Hosted by Jon Clark and Ruth Tarrant Upcoming

Hosted by Jon Clark and Ruth Tarrant

Upcoming student revision events

Session Aims AO 1 How are wages determined? AO 1/AO 2/AO 3/AO 4 What do we mean by wage discrimination? What are the possible causes of the gender pay gap in the UK? What are the consequences of the gender pay gap?

Session Aims Paper 3 ‘The Synoptic Paper’ Wage determination and labour economics are considered ‘micro economics’. Achieving improved productivity for the economy considered a ‘macro’ topic. Government intervention into improving market failure ‘micro’. Improvements in productivity through supply-side policies is ‘macro’.

How this fits with your Spec: AQA Edexcel (A) OCR 4. 1. 6. 7 Discrimination in the labour market The impact of gender, ethnicity and other forms of discrimination on wages, levels and types of employment. 3. 5. 3 Wage determination in competitive and noncompetitive markets: b) Understanding of current labour market issues Microeconomics: evaluate the impact on labour markets of: migration, discrimination, demographic changes, incentives. 4. 1. 7. 1 The distribution of income and wealth The likely benefits and costs of more equal and more unequal distributions. 4. 2. 2 Inequality c) Causes of income and wealth inequality within countries and between countries Microeconomics: Inequity explain the causes of inequality of income and wealth

Equilibrium Wages in the Labour Market The demand for labour is ‘derived’

Equilibrium Wages in the Labour Market Wage Rate The equilibrium market wage rate is at the intersection of the supply and demand for labour. LS 1 W 1 LD 1 Employment Potential issue for students: Unlike ordinary D&S, the firm controls the demand curve

Equilibrium Wages in the Labour Market Wage Rate Labour Supply W 1 LD 1 Employment When discriminating, employers may perceive that the marginal revenue productivity of “favoured groups” is relatively higher than people subject to the discrimination

Equilibrium Wages in the Labour Market Wage Rate Labour Supply W 1 W 2 LD 1 LD for discriminated group E 2 E 1 Employment The demand for labour of discriminated groups will be lower and wages and employment will be lower as a result

Types of labour market discrimination Labour market discrimination occurs when an employer uses metrics/characteristics other than the measured productivity of a worker to judge their appropriateness for a job/role. Ethnicity Faith Sexuality Gender Age Social Background Other factors

Factors that may cause a gender pay gap Despite equal pay legislation in many countries, there remains a persistent gap between malefemale pay in many labour markets 1. Breaks from the labour market § When women take maternity leave to raise a family, it is harder to achieve promotion when re-entering the jobs market. § Age at which many women take a break from the labour force is often the point when careers take off 2. Access to education: In many developing countries, opportunity for women to take qualifications and gain experience is limited, affected by social norms, high fertility rates Is this true of the UK?

Findings from study conducted by Institute of Financial Studies 2016 https: //www. ifs. org. uk/uploads/publications/bn 186. pdf

Factors that may cause a gender pay gap Educational attainment by gender over time Proportion of population with no more than….

Factors that may cause a gender pay gap Mean hourly wages across the life cycle by gender and education

Factors that may cause a gender pay gap Gender wage gap by time to/since birth of first child

Findings from study conducted by Deloitte ‘Women in STEM’ The study assumes that skills in the STEM subjects are particularly valuable for employment in modern businesses. Employment in such businesses are likely to pay relatively well for the skills required. http: //www 2. deloitte. com/uk/en/pages/growth/arti cles/technology-career-pathways-gender-paygap. html#

Findings from study conducted by Deloitte ‘Women in STEM’ § Overall, almost as many girls as boys sat GCSE in STEM subjects this year. § At A-Level in 2016, 40 per cent more boys than girls took STEM subjects, Why the including Computing, Economics & Mathematics. However, girls difference? continued to outperform boys in every STEM subject. A-Level results 2016 in most popular STEM subject Numbers entered (nearest 1, 000) Percentage achieving Grades A*-C

Will the rise of automation impact more on men or women? ‘Future proof industries’: • Creative occupations like musicians, artists and designers • Manual occupations that require sophisticated dexterity like farming or building trades • Teaching occupations, including teachers and driving instructors, which develop skills in others • Caring occupations in the health and social care industry, like nursing and child protection

Will the rise of automation impact more on men or women? Source: Frey and Osborne, ONS, Deloitte analysis

Findings from study conducted by Deloitte ‘Women in STEM’ “It is too simplistic to refer to the difference in average salary between men and women in terms of a straightforward lack of parity in pay. Instead, upon first entering an occupation it should be acknowledged that the variation in pay relates mostly to the differences in the subjects men and women study. ”

Findings from study conducted by Deloitte ‘Women in STEM’ “Although the gender pay gap is closing steadily, we forecast that at the current rate of convergence, pay parity will not be achieved until 2069. ”

Other factors that may cause a gender pay gap Patterns of employment: In developed countries - Women are disproportionately represented in part time work MEN WOMEN

Other factors that may cause a gender pay gap Gender pay gap remains affected by continued employer discrimination ?

Economic impact of discrimination in the labour markets Wage discrimination is considered a market failure § A lack of equality can lead to lower levels of motivation and productivity § Higher pay for women could encourage more to take technical subjects (such as STEM) which may have a particular value in developed economies § One argument exists around established norms – currently, are women more likely to take longer career breaks than men as the believe that their earning potentials are lower? § A reduction/removal of discrimination should lead to higher economic growth § Removal of discrimination can improve international competitiveness

Economic impact of discrimination in the labour markets Arguments should primarily be given from the economic point of view (i. e. the economic impact of under-utilization of labour, or improving international competitiveness) although a remark in any conclusion about societal aims being achieved has relevance.

Resource for discrimination discussion

Resource for labour legislation discussion

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