Are Low-Skill Women Being Left Behind? Labor Market Evidence from the UK
IMF Working Papers, February 25, 2022
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Bibliographic details
- Authors: Era Dabla-Norris, Carlo Pizzinelli, Jay Rappaport
- Published: February 25, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400202384.001
Summary
- Labor markets in the UK have been characterized by markedly widening wage inequality for low-skill (non-college) women, a trend that predates the pandemic.
- The study estimates age, period, and cohort effects for (a) the likelihood of employment in different occupations and (b) the wages earned therein over 2001-2019.
- For recent generations of women, cohort effects indicate a higher likelihood of employment in low-paying manual jobs relative to high-paying abstract jobs.
- Cohort effects also underpin falling wages for post-1980 cohorts across all occupations.
- Falling returns to labor rather than job polarization has been identified as a key driver of rising inter-age wage inequality among low-skill females.
- Wage-level cohort effects underpin a nearly 10 percent fall in expected lifetime earnings for low-skill women born in 1990 relative to those born in 1970.
Methods and scope
- Period analyzed: 2001-2019.
- Analytical approach: estimation of age, period, and cohort effects on occupational employment likelihood and wages.
- Population focus: low-skill (non-college) women in the United Kingdom.
Key findings (empirical)
- Job-polarization pattern: Recent female cohorts show higher likelihood of employment in low-paying manual occupations versus high-paying abstract occupations.
- Wage trends by cohort: Post-1980 cohorts face falling wages across all occupations.
- Primary driver of inter-age wage inequality among low-skill females: falling returns to labor rather than occupational shifts (job polarization).
- Lifetime earnings impact: Nearly 10 percent fall in expected lifetime earnings for low-skill women born in 1990 compared with those born in 1970.
Implications and policy considerations
- Policies addressing wage compression and returns to labor may be more effective at reducing rising inter-age wage inequality among low-skill women than policies solely targeting occupational composition.
- Interventions to bolster returns to labor for low-skill women across occupations could help mitigate cohort-driven declines in lifetime earnings.
- Attention to cohort-specific dynamics (not only aggregate labor-market shifts) is important for designing gender- and age-sensitive labor policies.
Era Dabla‑Norris, Carlo Pizzinelli, and Jay Rappaport. "Are Low-Skill Women Being Left Behind? Labor Market Evidence from the UK", IMF Working Papers 2022, 042 (February 25, 2022); Working Paper No. 2022/042, Pages: 48, DOI: https://doi.org/10.5089/9798400202384.001
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