Education, occupation and career expectations: Determinants of the gender pay gap for UK graduates

Despite anti-discrimination policies, women are paid 20% less then men in the UK. A large proportion of this wage gap is usually left unexplained. In this paper, I investigate whether the unexplained component is due to mis-specification. Using a sample of recent UK graduates, I examine the role of choice variables (subject of study and occupation) as well as career expectations and aspirations. The evidence indicates that women are more altruistic and less career-oriented than men. Career break expectations, for example, explain 10% of the gender wage gap in the favoured model. By omitting attitudinal variables, most studies are likely to overestimate the unexplained component of the gender wage gap. Women with a more traditional view concerning childrearing are also found to have less intensive search behaviour. Since aspirations may reflect perceived discrimination or social pressure, current legislations are unlikely to reduce the gender wage gap.