Why do Men Earn more than Women? An Analysis using British Household Panel Survey

The analysis of pay gap across gender is sensitive to the use of specific econometric techniques. While the estimates may reveal upward bias in case of exclusion of significant covariates, the use of inappropriate estimation techniques results in underestimation. Although some analysis shows that gender pay differential has been declining over time, controlling for significant economic variables, this study does not find supporting evidence to this hypothesis. Wage differential varies positively with pay levels in case of weekly pay, but this pattern does not prevail in case of hourly pay which accounts more for the discrimination from the employer’s side.