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% mark but still remains of the worst figures in Europe. In the report for TUC (Trades Union Congress) conference (2008) it was stated that the under-utilisation of women’s skills harms the British economy by more than ￡11 billion a year (TUC, 2008). It is obvious that the policy makers must take stronger actions to minimise the pay gap.

The findings of my study on the gender wage differential in the UK have inferences for two main kinds of government policy: those related to gender equality and those related to economic productivity and growth. As practice has shown, these two policy streams are tightly related, if not dependent (Kingsmill, 2001). Following the EU policy pointer the UK should work on the issue of gender segregation by encouraging union membership and representation. As statistics show, the number of trade unions in female-dominated and low-paid sectors is much lower than in male-dominated ones (Gunderson, 2006). In addition, provision of training for returners should be improved and extended as women returning after career interruptions are one of the lowest earning groups (Olsen and Walby, 2004). Such schemes could appear in a form similar to that of the New Deal, yet more effective. On the other hand, the cost of re-hiring and re-training could be significantly cut if more financial incentives were created in order to help women stay employed, i.e. encourage employment attachment. Finally, policies against discrimination and income inequality would boost economic growth in the UK. As mentioned above, discrimination is a market failure. By minimising the human capital gap between men and women and by pursuance of competition in the labour market it is possible to increase the productivity of economy as a whole.

Conclusion

Judging from statistical evidence in the UK, there is no uncertainty that gender income inequality exists. It was already mentioned in the previous sections that a large number of studies in the field have explained the gender wage gap by the components of ‘human capital’ and ‘discrimination’. We generally accept human capital factors as perfectly good reasons for differences in pay. Those particular characteristics can act as signals that employers can identify and hence determine wage for a given level of productivity. By contrast, discrimination is seen as causing a harmful market failure. In this study I find that a raw pay gap of around ￡ 103 between male and female average weekly earnings exists.
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