The UK’s gender pay gap has been underestimated for more than 20 years, according to new research, sparking concerns about the reliability of official figures that underpin major policy decisions, including those on minimum wage.
New findings published in the British Journal of Industrial Relations suggest that since 2004 the Office for National Statistics (ONS) has failed to properly represent smaller organisations in its annual survey of hours and earnings (Ashe).
The report found the gender pay gap had been consistently underestimated by a “small but noteworthy” margin of around one percentage point. This is because the ONS had given undue weighting to larger businesses, where pay tends to be higher and the gap between men and women’s earnings is usually smaller.
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The flawed data could have widespread consequences, as ONS statistics are used to inform doctors’ and nurses’ pay recommendations and help set the national minimum wage, the study’s lead author, John Forth, professor in human resource management at Bayes Business School at City St George’s, University of London, said.
The UK’s gender pay gap was 7 per cent in 2024 for full-time employees, according to official figures. The report, however, indicates the true figure should be closer to 8 per cent.
These findings contribute to broader concerns about the quality of ONS statistics. The organisation has faced a series of data setbacks, including postponing July’s retail sales release over quality issues and halting publication of trade data earlier this year after discovering errors dating back to 2023, according to a Financial Times report.
The impact of inaccurate figures
Despite ongoing quality concerns, ONS data continues to shape key policymaking, making it crucial for Ashe data to accurately reflect wages and earnings, Forth said.
Many employers also benchmark their own gender pay gap figures against the national stats, according to Tom Heys, pay reporting lead at law firm Lewis Silkin. It’s mandatory for all employers with 250 or more employees to publish their gender pay gap data.
Additionally, the inaccurate figures have potentially slowed down progress on closing the gender pay divide. “If policy makers had known the gender pay gap was wider than the ONS was estimating, it’s possible that it may have pursued more stringent policies to close it – or introduced new initiatives more quickly,” Forth added.
An ONS spokesperson said the Bayes Business School research raises “interesting questions” about the best way to weight survey data. “However it’s worth noting that, even if new methods were used, the overall impact on the gender pay gap would be small,” they said.
The ONS said it has introduced a number of improvements to Ashe, and further work is under way to review its sampling methods.
Forth welcomed the review and urged the ONS to ensure its methodology better reflects the diversity of jobs and organisations across the UK so underlying issues can be properly addressed.
Flawed figures shouldn’t cloud fundamental issues
Despite attempts to close the gender pay gap, disparities between men’s and women’s pay persist, with women earning £631 less than men every month on average, according to the Fawcett Society.
Black, minority ethnic, and disabled women face even greater pay disparities – women of Bangladeshi (28.4 per cent), Pakistani (25.9 per cent) and Mixed White and Black Caribbean (25 per cent) backgrounds experience higher pay gaps.
The pay gap has decreased from 27.5 per cent in 1997 to 13.1 per cent in 2024 for all employees, according to the now disputed Ashe figures.
For part-time employees, the gender pay gap has dropped from 0.6 per cent in 1997 to -3 in 2024. A negative number shows women earn more than men on average. This is due to the higher percentage of women working in part-time roles and the lower hourly median pay for these positions.
While the issue of flawed figures is significant, it shouldn’t cloud the ongoing issue of pay inequality, Heys said. “If the headline gap is slightly larger than previously thought, it doesn’t change the fundamental issues that the government and employers still need to tackle.”
The issue needs attention to “sharpen the political focus and strengthen the case for broader measures to address the complex drivers of pay gaps”, he added.
For further information, read the CIPD’s guide to gender pay gap reporting