The impact of economic freedom on the gender pay gap: evidence from a survey of UK households

Abstract

Purpose

Using survey datasets, the purpose of this work explores the impact of economic freedom on the gender pay gap in the UK.

Design/methodology/approach

The analysis combines Economic Freedom of the World data with the Understanding Society (USoc) Microdata series.

Findings

The results document that economic freedom positively affects the gender pay gap. When the components of the index are considered, the findings indicate different effects of various types of policy, i.e. less government spending, stronger trade liberalization conditions and levels of corruption lead to higher gaps; stronger legal and property rights and a sounder money system have no impact on the gap. Moreover, a stronger impact in the manufacturing industry, part-time workers and those who work in the non-London regions is observed.

Practical implications

The findings imply that reductions to government spending programmes can potentially aggravate the gap in hourly wages paid between males and females and should, therefore, be implemented. It may be also possible to provide females the training or education necessary to effectively compete in the workforce, before eliminating any spending programme they rely on.

Originality/value

The first study explores the link between economic freedom and gender pay gap through a unique survey dataset with UK households.

Citation

Apergis, N. and Lynch, N. (2022), "The impact of economic freedom on the gender pay gap: evidence from a survey of UK households", Journal of Economic Studies, Vol. 49 No. 1, pp. 61-76. https://doi.org/10.1108/JES-09-2020-0444