The gender wage gap and firms’ characteristics: empirical evidence from UK firms

Purpose This study aims to identify the sources of the gender wage gap across economic sectors and examine how the gap varies with firms’ characteristics, including profitability, productivity, and firm age. Design/methodology/approach The study uses descriptive analysis based on cross-sectional data from UK firms with 250 or more employees in 2017. A probit model is employed to examine how firm characteristics influence compliance with regulations requiring the publication of gender wage gap data. Findings The findings reveal that the average gender pay gap in UK firms is smaller than the national average, indicating a wider gap in smaller firms. Most of the gap originates within firms across all sectors. The gender wage gap increases with firms’ profitability, productivity, and age, and women are less likely to be employed by the most productive firms. Women remain underrepresented in senior roles, with their representation decreasing as firms become more productive. Additionally, women are more likely to work in less profitable or older firms and remain underrepresented in senior positions. The study further finds that firms with higher liquidity ratios and longer operating histories are more likely to comply with reporting regulations. In contrast, more profitable and productive firms are less likely to disclose such information. Originality/value This study explores the intersection of the gender wage gap and firm characteristics, offering valuable insights for policymakers and corporate leaders seeking to promote gender equity.