Factors that Effect the Gender Pay Gap in the UK and China

Empirical Methods in Accounting and Finance

1          Abstract

The difference in the pay between men and women have been a topic of interest in recent years. This study analyzes several important factors that affect the differences in gender pay in the UK and China. In addition, it also questions that if those elements will be affected by national conditions. The study will be conducted by the mixed method, and Mincer formula method is used to analyze the data. Besides, we will use secondary data to prove our point of view. Its goals are to give an overall analysis of whether there exist the same influencing factors between these two countries.

1.1       Study Background and Rationale

We choose China and the UK as our samples because there is a significant difference between China and the UK that China is a developing country while the UK is a developed country. In addition, China and the UK are closely related to us because we are the international students who come from China and study in the UK.

Then, the reason why we are interested in this topic is that it is necessary for female students who will face the challenge of finding a good job to know what kind of professions provide more opportunities for women in advance, which means they can take advantage of the leisure time to improve their academic ability and working experience in order to target the female popular professions in society to achieve a better life.  

1.2       Objectives and Questions

1.2.1     Objectives

The objectives of the research are to present an overall analysis about elements that have effects on gender income differences in UK and China based on the research of factors that influence the gender pay gap in several industries of UK and China. Besides, find out whether there are same factors existing in these two countries by exploring their influencing factors. Finally, since one country that we choose is a developing country and another one is a developed country, so whether these influencing factors will change due to the nature of the country is worth investigating either.

1.2.2     Questions

According to the goals, the following points are included in research questions: Firstly, the elements in the gender pay gap in several industries in England and China. Secondly, the conclusion of the factors for the gender pay gap in the UK and China. Thirdly, if there exist the same factors affecting the gender pay gap between these two countries. Fourthly, if those elements will change due to the nature of the country.

2          Contribution of Existing Literature

The Factor Influencing the Gender Pay Gap in the UK

Employment segregation is an influencing factor that women under‐represent in relatively high paying occupations through into a higher gender pay gap. (England, P. 1986). According to the WERS98[1], workplace is one of the considerations when people choose to work Workplace segregation is found to have a significant and substantial impact, especially in Scotland and the North East. Women would have limited choices for job selections because of the physical distances in these areas. (Mumford and Smith, 2007). Based on ASHE and the LFS survey, Debra Leaker (2008) publishes results of the influences of industrial differences for the gender pay gap. The skilled trades (such as Electrical trades) have the most significant disparity in gender pay and the narrowest gaps were for the professional industry. Men generally earn more than women across occupations. However, secretarial and related jobs are a few exceptions that men earn less than women in these field.

Character traits are recognized as determinants of wages and these characteristics differ by gender (Bowles et al., 2001). Swaffield (2000) uses the British Household Panel Survey[2] to conclude that work motivation is a significant decisive factor for women but not for men. Women who have children are held back by their families, which can negatively affect job hunting and work. Chevalier (2002) uses financial motives to measure work motivations. Contrary to Swaffield (2000), he finds that this motivation accounts for a significant portion (30 %) of explaining the wage gap.

The Factor Influencing the Gender Pay Gap in China

When it comes to the factors that have impact on the gender pay gap in China, gender discrimination is one of them. In China’s traditional culture, women’s social status has always been lower than that of men. This opinion can be proved by the research of Peng (2011). To examine the gender differences in wage income among a group of people with higher education, she uses the 2006 China Comprehensive Survey and Brown’s decomposition method finding that 74.3% is an unexplained part caused by factors such as gender discrimination.

Moreover, education is one of the significant factors leading to differences in income between men and women. Women have more responsibilities in family affairs like fertility or taking care of children, making women invest less in education, thus the productivity and income that women have are lower than that of men (Mincer & Polachek, 1974).  That Lin（2012) performs that childcare responsibilities for children under the age of 6 have a negative effect on the earnings of women also proved this opinion. By researching the influence of education on gender pay differences in China，Guo and Zhang（2012）find that the higher education level that a person receives, the smaller gender differences in wages.

The gender pay gap can also be affected by the wage differences within the industry in China. According to Wang (2005), gender pay gap is mainly caused by wage differences within the industry. Yang (2012) also finds that the gender income gap is mainly caused by the difference in gender income within the industry, rather than the income difference between industries.

3          Methodology

3.1       How to Conduct the Study

Mixed method is really useful in analyzing the information of this report. When reading the article before, we find that the author professor Yang (Yang Po, 2012) who analyzes the employment survey of college students also uses this method to make the survey more smoothly and draw a better conclusion. The questionnaire will be sent by email to the public who come from the UK and China. The main advantage of online survey is that it’s easy to read ideas of thousands of people who have the same characteristics in the short time, because the UK and China are in a great geography distance. (Bachmann, D., & Elfrink, J 1996) And the objective of groups and individuals are simple to find, because in some cases, some groups only exist in the cyberspace. (Garton, Haythornthwaite, & Wellman, 1999; Wellman, 1997) However, the disadvantage of the questionnaire is that the response rates in email surveys may be really low, because it is difficult to ascertain the non-response rate tracking in many large online groups. (Andrews et al., 2003)

In addition, we will also use the secondary data which belongs to qualitative method and this method is really helpful that all the articles I read before use secondary data to assist them to get a clear idea.  After collecting the data from the questionnaire, we may still feel confused and uncertain about some results, and then secondary data by reading the journals and articles on the website will help us check the information and enlarge the knowledge, because the number of the background information will have been provided. But it will always cover the all aspects of interest because the purpose of the secondary data may not coincide with the current research purpose in mind. (Sorensen H T, Sabroe S, Olsen J. A, 1996)

There are some reasons for us to use mixed method. Firstly, mixed method contains advantages of above two single methods, like providing the number accuracy and feeling of interviewee, which can receive a better understanding of the investigation problems. Secondly, the researcher can choose all of the method of data analyze and not be limited to specified qualitative or quantitative research methods. However, using mixed method is a challenge to ability of researcher because researcher must have strong basic ability of analyze data and a strict logical to deal with the information. (All Answers ltd 2018)

Apart from it, we utilize formula, like Mincer formula, the education degree of female and male respectively effects the payoff gap, to summarize and analyze information. It is more convincing than the results of subjective analysis from investigators only. In other words, the result according formula exclude interference factors and make statistic more precision. However, formula method commonly requires an accuracy data sample, which means that it is really hard for us to collect high quality statistic only from questionnaire.

3.2       A Rationale for the Choice of Data Sources

The data and resources will be collected through questionnaire. Questionnaires will be hand out to employees of 100 different kinds of industries in the UK and China respectively, such as education, finance and medical. (DIB Financial Service, 2016) Some statistics like that how much female and male earn respectively and how long they work a week will be collected by the quantitative research. In addition, we will also need the respondents to write something about their own ideas about the gender pay. If they think it is unfair in the aspect of salaries, we will inquiry the reasons why the society exists the situation of gender pay gap. We will collect the gender pay gap information in recent 5 years and understand payoff opinions of employee. One of the advantages of the information from questionnaire is to classify and search keywords using software. However, the results may not objective and the respondents could not represent all of the employees in both of the two countries. The companies which be chosen cannot representative of all industries as well. (Andrews et al., 2003)

The information from secondary data could be collected through text documents such as collect the organization’s databases from different industries and also could be collected by continuous and regular surveys such as the information from ASHE and LFS, which is professional investigated about labor force survey and survey of hours and earnings. Because the data from official data will be more accurate. Through the collection of secondary data, we could compare the accuracy of our first-hand data, and there might be some unforeseen discoveries. However, the original purpose and presentation of the information of secondary data that might not match the needs of the research. And data are time-sensitive, the information of secondary data that might be not match the current situation. (Andrews et al., 2003)

4          Conclusion

In this report, we research the gender pay gap and find out the differences and similarities between the UK and China. Firstly, we give the reasons why we choose these two countries as sample. Secondly, we do some literature reviews to find out some resources to support our research and give methodologies about our research.

There are still some study limitations in our research. For example, we just collect the data from websites, and we do not enhance the data sources. In the future, we should enhance the data sources and collect more reliable data to improve the research. Moreover, we don’t choose a less developed country as an object of study because of political unrest and lower pay in those countries. It may result in our research cannot generalize everything and come to a more accurate conclusion.

5          References

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Appendix

1. The graph of factors influencing gender pay gap in China and UK

2. Literature Review: Summary of Empirical Studies:

[1] The data used in this study are drawn from the British Workplace Employee Relations Survey 1998 (WERS98). WERS98 is a nationally representative survey of workplaces with 10 or more employees containing a vast amount of information.

[2]British Household Panel Survey conducts work and home oriented motivation (six questions on the respective role of men and women), aspiration (proxied by maternal occupation) and household constraints (history of personal circumstances that may have prevented participation to the labor force in the past).