7. Comparison of UK and Scottish Pay Gaps
Relative to the UK, recent falls in the pay gap in Scotland have been driven by the growth of female earnings in Scotland (and a subdued growth for men). Women's earnings in Scotland saw the second highest growth among UK countries and regions (up 3.0% over the year with the UK growing at a slower rate of 2.1%). Median earnings for full-time women in Scotland was higher than the UK and also the third highest compared to anywhere outside of London and the South East. Male earnings growth over the year was subdued in Scotland which, given the strong performance of female earnings, would have contributed to the reducing gender pay gap in Scotland (male pay in Scotland recorded the second lowest increase among the UK countries and regions, up 0.7% over the year with the UK growing at a faster rate of 1.5%).
What other factors could be at play?
We know that one of the driving factors in the Scottish Labour Market in recent times has been the rise of older workers particularly women shifting from inactivity into employment. For example, over the ten-year period from 2004 to 2014, there has been a 23.4% rise in employment level for 50-64 year olds (from 573,200 to 707,200) and a 95% rise in employment level for those aged 65 and over (41,200 to 80,300).
In the UK, the gender pay gap for 50-59 year olds in 2015 was 17.2% and for 60 year olds and over, 13.2%. In contrast, the gender pay in Scotland for 50 year olds and above is 12.0%. It is likely therefore that this in part is contributing to a smaller gender pay gap in Scotland.
Looking at the earnings distribution between Scotland and the UK, the gender pay gap appears more pronounced at the top end of the earnings distribution. For those in the top 10% of earnings, the full-time gender pay gap in the UK was 18.5% while the gender pay gap in Scotland was 14.6%.
If we consider an occupational analysis, key differences in occupations between Scotland and UK can be seen in: Caring, Leisure and other Service Occupations (6.1% in Scotland versus 8.1% in the UK), Professional Occupations (7.0% in Scotland versus 11.0% in the UK) and Associate professional and technical occupations (9.0% in Scotland versus 11.2% in the UK).
Looking at sectoral analysis, the gender pay gap for full-time workers in the public sector in Scotland was (-0.8%, where women are paid more than men) (albeit we estimate the figure to be accurate to +/- 4 percentage points), this compares to 11.4% for the public sector in the UK. The larger size of the public sector in Scotland (21.0% of total employment compared to 17.2% in the UK) will again play into the smaller gender pay gap in Scotland because there tends to be greater work flexibility and therefore lower pay gaps within public occupations.