A GENERALISED LORENZ CURVE APPROACH TO EXPLAINING THE UPWARD MOVEMENT IN WOMEN'S RELATIVE EARNINGS IN BRITAIN DURING THE 1970s
| Author | P. J. Sloane,I. Theodossiou |
| Published date | 01 November 1994 |
| DOI | http://doi.org/10.1111/j.1467-9485.1994.tb01141.x |
| Date | 01 November 1994 |
Srorrfsh
Journal
of
Polrrrcal
Economy,
Vol
41.
No
4.
November
1994
218
Main
Street. Cambridge.
MA
02142.
USA
Scottish Economic
Sociely
1994
Published by Blackwell Publishers.
108
Cowley Road, Oxford
OX4
IJF.
UK
and
A GENERALISED LORENZ CURVE APPROACH
TO EXPLAINING THE UPWARD MOVEMENT IN
WOMEN'S RELATIVE EARNINGS IN BRITAIN
DURING THE
1970s
P.
J.
Sloane and
I.
Theodossiou*
I
INTRODUCTION
The purpose of this paper is two-fold. First to compare relative movements in
male and female earnings using disaggregated data from the New Earnings
Survey over the period
1970
to
1982
and in particular to examine changes over
the whole distribution
of
earnings rather than simply the mean, and second to
see to what extent this can cast light on the substantial improvement in female
relative earnings over the period.
After a century
of
virtual constancy the British female-male earnings ratio
moved rapidly upwards in the
1970s.
As the Equal Pay Act had been intro-
duced in
1970,
with phased implementation completed by the end of
1975
when
the complementary Sex Discrimination Act became
law,
it is clearly tempting
to ascribe the major part, if not the whole of the explanation, to the influence
of
the legislation. Indeed, Zabalza and Tzannatos
(1985)
concluded that the
equal pay legislation had been responsible for a
19%
increase in the ratio com-
pared to a less than
2%
increase as a result
of
the implementation of flat-rate
incomes policies over the period. This conclusion was challenged by Chiplin
and Sloane
(1988)
who questioned the use
of
dummy variables in obtaining the
above results and by Borooah and Lee
(1988)
who emphasised the importance
of
structural effects on female relative employment and argued that demand
shift factors had been underplayed.
Additional factors in Britain were the use
of
flat-rate incomes policies and
a
narrowing of the skill differential for male workers which occurred contem-
poraneously with the introduction
of
equal pay. It should be noted that the
coefficient
of
variation in earnings narrowed for men between
1970
and
1977
from
0.43
to
0.36
before widening again
to
0.40
in
1982.
The corresponding
coefficients
of
variation for women were
0.49, 0.39
and
0.39
respectively.
These results are, therefore, consistent with a narrowing
of
differentials. Here,
we examine whether patterns revealed by comparisons
of
means as above are
reproduced when we compare complete distributions described using Genera-
lised Lorenz curves (see Wohlstetter and Coleman,
1972;
Karoly,
1992).
Thus,
*
University
of
Aberdeen
464
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