Scottish Government

Chapter Five Income and Wealth

This chapter examines the relationship between gender and income distribution in Scotland, including income from earnings, financial assets, and benefits. It also examines gender differences in use of financial services, and in attitudes to financial management.

5.1 Policy context

Policies which regulate or affect the distribution of income and wealth, including the distribution of income and wealth between women and men, are largely the responsibility of the UK government. These include equal pay legislation, the National Minimum Wage, benefits and tax credits, and policies which aim to tackle poverty and child poverty in particular. In certain of these policy areas the Scottish Executive has also set objectives and targets which complement those of the UK government. Policy objectives with respect to women's participation in the labour market are outlined in Chapter Four on the Labour Market, and these include reducing the gender pay gap. As noted also, the Scottish Executive has its own Close the Gap campaign to promote equal pay. The National Minimum Wage, introduced in 1999, has been particularly beneficial for those in low paid jobs, many of whom are women. The UK government is also committed to eradicating child poverty in a generation, to full employment, to providing security for those unable to work, and to targeting areas facing the greatest problems in terms of poverty and exclusion. Outlined below are the Scottish Executive's policy objectives which aim to tackle poverty and social exclusion.

The Scottish Executive launched its Closing the Opportunity Gap strategy in 2004, and its main aims are to:

• Prevent individuals or families from falling into poverty;
• Provide routes out of poverty for individuals and families;
• Sustain individuals or families in a lifestyle free from poverty.

Specific objectives have been set to further these aims, and these include: increasing chances of sustained employment for vulnerable and disadvantaged groups; increasing confidence and skills; reducing the vulnerability of low income families to financial exclusion and multiple debts; the regeneration of the most disadvantaged neighbourhoods; improving the health of those in the most deprived communities; and to improve access to high quality services for the most disadvantaged groups and for individuals in rural communities.

With respect to child poverty the Scottish Executive complements UK government measures such as training programmes aimed at getting unemployed people into work and tax credits with parallel strategies such as the development of childcare provision and Sure Start projects, and with its own economic development strategies. Among the major aims of these strategies is increased labour market participation of disadvantaged and vulnerable groups and improvement in their levels of income, while it is recognised that some groups will require support through social benefits.

5.2 Incomes of women and men

Key points

• In 2005, women full-time workers in Scotland earned 88% of male full-time workers average hourly pay. This has increased from 72% in 1977. Since 1997 women's average earnings have increased from 79% to 88% of men's, an increase of women's earnings in relation to men's of 9 percentage points.
• Looking at a comparison of weekly earnings of full-time workers, in 1970 women full-time workers earned on average 54% of male full-time workers' average earnings. By 2003 women's weekly earnings had increased to 77% of men's. Between 1998 and 2005 women's weekly earnings as a proportion of men's increased from 72% to 81%.
• Women's earnings are significantly affected by the concentration of women in part-time jobs, while men working part-time are a small number of aytpical workers. Women part-timers' hourly rate compares favourably with that of male part-timers, with women earning 104% of men's hourly rate in 2005, an increase from 100% in 1997. However, a comparison of women part-timers' hourly pay (almost half of all women workers work part-time) with male full-timers' hourly pay (over 80% of men work full-time) indicates the disparity between women's and men's earning power. Women part-timers earned an hourly rate which was 63% of full-time men's hourly rate in 2005, an increase from 56% in 1997.
• The gender earnings ratio varies by occupation. For example, in 2005 women full-time workers in professional occupations earned 86% of their male counterparts' earnings, while women process, plant and machine operatives earned 70% of men's earnings.
• The gender earnings ratio also varies by industry. For example, in 2005 women full-time workers in education earned 91% of men's wages, while in manufacturing they earned 68% of men's average weekly earnings.
• The gender earnings ratio is more equal in the public than in the private sector. In 2005 women's hourly pay in the public sector was 97% of men's hourly pay compatared to 80% in the private sector.
• The gender earnings ratio was effectively the same for disabled men and women as for non-disabled men and women in 2005, with women in both categories earning just over 87% of the earnings of men in both categories.
• On average women's total individual incomes from all sources - earnings, income from financial assets or from benefits - were 60% of men's total individual incomes in 2002/03-2004/05. This represented an increase of 9 percentage points from a level of 51% in 1996/97-1998/99.
• Households in which men are the highest income earners have household income levels which are higher than those in which women are the highest income earners. In 2005, 51% of households with a male HIH had an income of over £20,000 compared to 22% of households with a female HIH.
• In 2003/04 equal proportions of men and women of working age were in Households Below Average Income, at 18%. Similarly equal proportions of male and female pensioners were in Households Below Average Income, at 18%. While proportions of working age adults at this income level had remained fairly stable since 1996/97, in the case of both male and female pensioners there was a significant decrease in proportions at this income level, in particular for female pensioners.
• Of those claiming key benefits in 2000, women made up the majority at 57%. In 2006, women continued to make up the majority of claimants of key benefits at 53%. In particular women make up the majority of those dependent on State Pensions and Pension Credits, making up around 64% of claimants of both benefits in 2005.
• Of all women workers, full-time and part-time taken together, 44% were without pension provision in 2004/05 compared to 37% of full-time male workers. Of women part-time workers 60% had no pension provision.
• Of those employees who were members of occupational pension schemes in 2004/05 women full-time workers were most likely to be members, with 59% being in occupational pension schemes, compared to 53% of male full-time workers, and 33% of women part-time workers.

5.3 Key sources of data and possible uses of data

5.3.1 Key sources of data

The official source for data on earnings is the Annual Survey of Hours and Earnings ( ASHE). This provides data on earnings from 1997. For data prior to 1997 the official source is the New Earnings Survey ( NES) which is the predecessor to the ASHE. As ASHE does not collect a lot of information other than earnings and some basic information about the individual, the Annual Population Survey ( APS) is used to compare earnings by other characteristics such as qualifications and age. It should be noted that the APS will provide different overall figures from ASHE. Data on individual incomes are drawn from the Women and Equality Unit reports on this topic, which combine data on incomes from earnings, benefits, pensions and other financial assets from a range of data sources. The future of the WEU publication on women's individual incomes is currently under review, though it is anticipated that data will continue to be available online, if not published in hard copy form. Data on household income is available from the Scottish Household Survey, and from Households Below Average Income. Data on benefits are drawn from statistics collected by the Department of Work and Pensions ( DWP), while data on pensions and savings are drawn from the Family Resources Survey. Data on financial management and use of credit are drawn from the Scottish Household Survey. Not all of these data are routinely published, and some of the tables included in this chapter were made available on request from the Scottish Executive.

5.3.2 Limitations of the data

Data taken from the ASHE are based on a survey of approximately 1% of all national insurance numbers. This allows for a reasonably robust estimate of earnings however as this is a sample survey there is still a degree of uncertainty around estimates. When using data with detailed breakdowns such as Local Authority or industry of employment care should be taken when interpreting results as difference may not be significant.

5.3.3 Mean versus Median

The preferred average measure for earnings is the median. This is due to the fact that the median is less affected by earnings at the extreme values (either very high or very low values) and this is important given the extremely skewed nature of earnings distributions. The median therefore provides the closest measure of what the average individual is likely to earn.

5.3.4. Measuring the Gender Pay Gap

The official measure of the gender pay gap in Scotland and the UK compares the full time median earnings excluding overtime of males and females. International comparisons of the gender pay gap use mean full time earnings rather than median. However this is due to historical convention rather than this being the best measure of the gender pay gap.

5.3.5 Possible uses of data

Earnings data are crucial in relation to efforts to close the gender pay gap, and bodies such as government departments, the enterprise network, and local authorities, might use these data in order to develop strategic approaches to tackling the pay gap at national and local levels. This should include addressing the gender pay gap within their own workforces as well as in the economy more widely. Disparities across Scotland, between sectors and between occupations, suggest the need for targeted strategies. For example, in certain areas it may be particularly urgent to tackle low pay. With respect to economic development strategies for Scotland in general, gender disaggregated data on earnings could be used to scrutinise the record of sectors and industries which are expected to make the major contribution to economic growth in future. Local authorities should use gender disaggregated data on earnings to address their own pay structures, as well as in informing local economic development strategies which might challenge low pay and occupational segregation. This might include support for gender specific projects. Evidence of the vulnerability of particular groups to poverty can inform regeneration strategies, and may require targeted strategies for specific groups e.g. lone parents who require childcare support to take up education, employment or training. For lone pensioners, there may be issues about benefits take up, fuel poverty, and access to shops and services.

5.4 Earnings and low pay

In Chapter Four the differences in men's and women's participation in the labour market were described, both in terms of industrial and occupational distribution, and in terms of working hours. These factors influence the levels of earnings of men and women and contribute to the persistence of the gender pay gap.

Table 5.1 Mean hourly earnings of full-time employees excluding overtime, (£), Scotland, 1977-2006

Source: New Earnings Survey; Annual Survey of Hours and Earnings
Notes : Employees on adult rates whose pay for the survey pay-period was not affected by absence.

To improve coverage and hence make the survey more representative, supplementary information was collected from the 2004 ASHE survey onwards on businesses not registered for VAT and for people who changed or started new jobs between sample selection and the survey reference period. The 2004 and 2005 ASHE results are therefore discontinuous with the results for 2003 and previous years, for which no supplementary information was collected. However for 2004 two sets of results are given; the headline results that include supplementary information and results that exclude this information. These second set of results are given solely for comparison to earlier years. Direct comparisons can be made between 1999-2003 and 2004 (ex.) or between 2004 (inc.) - 2006. http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

Over time, however, the gender pay gap has been getting smaller, as Table 5.1 above shows. ⁶ In 1977 (two years after the Equal Pay Act had come into effect) women's average hourly earnings were 72% of men's average hourly earnings. By 2006 women's average hourly earnings had risen to 86% of men's average hourly earnings.

Because of the difference in the average working hours of men and women, it is also useful to compare average weekly earnings, since this provides a better indication of the levels of take home pay of men and women than a comparison of hourly rates. This indicates a greater gender pay gap with respect to weekly pay of full-time workers. Table 5.2 below, based on data from the New Earnings Survey, indicates that women's average weekly pay was 49% of men's average weekly pay in 1970, and that by 2002 women's average weekly pay had risen to 68% of men's average weekly pay. Table 5.2 also indicates that the gap was greater for non-manual workers than for manual workers until around 1990, since when it has been typically slightly greater for manual workers than non-manual workers. In 1970, women manual workers' average weekly earnings were 51% of their male counterparts' average earnings, whereas women non-manual workers' average weekly earnings were 49% of their male counterparts' average earnings. In 1990, women manual workers' average weekly earnings were 61% of male manual workers' average weekly earnings, compared to 61% for non-manual workers, while in 2002 women manual workers' average weekly earnings were 67% of male manual workers' average weekly earnings, compared to 68% of non-manual workers.

Table 5.2 Average gross weekly earnings of full-time employees, (£), Scotland, 1970; 1975; 1980; 1985-2003

Source: New Earnings Survey
Notes: To April 1983 earnings relate to males age 21 and over and females age 18 and over ; from April 1984 earnings are for those on adult rates.
*There is no manual/non manual split available for 2003 because the data have been coded on Standard Occupational Classification ( SOC) 2000 which does not differentiate between manual and non-manual employees.
'..' data not available.
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=5749

Changes to the methods of collecting and analysing data on earnings (as indicated in footnote 1 above) mean that comparisons between average wages of manual and non-manual workers are no longer available. With the introduction of the Annual Survey of Hours and Earnings it was also decided to show median earnings instead of average earnings. This is because averages can be distorted by very small numbers of very high (or very low) earners, whereas the median provides a better indication of the distribution of earnings within the majority of the working population. This means that the data from the NES and ASHE are not strictly comparable, and that the new ASHE data indicate a smaller gender pay gap than previous NES data. For example, NES figures for 1998 indicated that women's average weekly earnings were 65% of men's, whereas the median figure given in Table 5.3 below, derived from ASHE, indicate that women's median gross weekly earnings in 1998 were 72% of men's median gross weekly earnings. However, the trend for the gender pay gap to decrease is similar, and the rate of decrease over the period in which data overlap is relatively close. The ASHE data in Table 5.4 below indicate that by 2005 the gender pay gap had decreased still further, with women's median gross weekly earnings being 81% of men's median gross weekly earnings.

Table 5.3 Median gross weekly earnings, 1998-2005 (£)

Source: Annual Survey of Hours and Earnings
Note: for 'excl. supp' and 'incl. supp', see note to Table 5.1 above.
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

The comparisons shown in Tables 5.2 and 5.3 and discussed above are for earnings of full-time workers. On the one hand while comparisons of weekly wages provide a better indication of overall income levels of men and women than comparisons of hourly pay, the comparison of the pay of full-time workers excludes a substantial proportion of women workers, with 41% of all women workers working part-time in 2005. Comparisons between the weekly and hourly pay of full-time and part-time employees indicates the less favourable position of part-time women workers compared to women and men in full-time employment.

Table 5.4 below sets out a series of comparisons, between weekly and hourly pay of full-time and part-time male and female workers. As has been noted by Dench et al (2002), making comparisons between women's and men's pay is complicated by the differences in patterns of working hours, and by the differences between men and women in their propensity to work part-time. Because of the differences in working hours, a comparison of hourly pay is often deemed the best measure of the gender pay gap, while comparisons between full-time earnings exclude part-time workers, of which women make up a much higher proportion than do men. Comparisons between male and female part-time workers, however, suffer from comparing a large group of female employees with a small and atypical group of male employees. Comparisons of women's part-time earnings with men's full-time earnings produces the largest gender pay gap, though is not strictly speaking comparing like with like. It is, however, useful in illustrating the overall disparities in men's and women's pay due to the relative concentration of women in part-time work. Given that making a comparison of men's and women's earnings is not straightforward, and given that the different comparisons illustrate different factors which contribute to the overall disparity in women's and men's earnings, these different ways of making comparisons are all illustrated in Table 5.4.

When the weekly pay of full-time and part-time workers is combined women's average weekly pay compared to men's is lower than that for full-time workers alone, being in 2005 64.3% and 80.9% respectively. For both types of comparison the trend has been for women's average pay in comparison with men's average pay to increase, from 56.9% and 72.5% in 1997 respectively for full-time and part-timers combined and for full-timers alone. When the average weekly pay of part-time female and part-time male workers is compared it can be seen that women have higher rates of pay. In 2005, women part-timers earned 19.3% more than their male counterparts. As noted, however, male part-time workers are a small and atypical group, while women part-timers are a substantial group within the female workforce. As indicated by the hourly comparisons, discussed below, the hourly rates of male and female part-time workers are very similar, though female part-timers earn slightly more on average. The comparisons of part-time weekly earnings with full-time weekly earnings illustrates the disadvantage that part-timers face compared to full-timers. In 2005, male part-time workers' average weekly pay was 25.7% of male full-time workers' weekly pay; female part-time workers' average weekly pay was 37.9% of female full-time workers' weekly pay and 30.7% of male full-time workers' average weekly pay.

Looking at comparisons of hourly rates of pay, again the general trend has been for women's average pay to increase as a proportion of men's average pay. In 1997, women's average hourly pay was 72.7% of men's average hourly pay, and by 2005 this had increased to 80.1%. For full-time women workers their average hourly pay was 89.2% of men's average hourly pay in 2005, while for part-time women workers their average hourly was 104% of male part-time workers' average hourly pay, while in 1997 women part-timers had earned slightly less than their male counterparts in terms of hourly rates at 99.6%. Comparisons of hourly rates also indicate that average hourly earnings of male part-time workers were 60.2% of male full-time workers' hourly average earnings in 2005, and in the same year women part-time workers' average hourly rates were 70.2% of women full-time workers' average hourly earnings, and 62.7% of male full-time workers' hourly average earnings. In general, the propensity for women to work part-time is significantly different from that of men, and it has a major impact on their earnings.

Table 5.4 Weekly and hourly median earnings, full-time and part-time employees, 1997-2005, (£)

Source: Annual Survey of Hours and Earnings
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

Another characteristic that distinguishes men and women in the labour force is their distribution within different categories of occupation. As commented above the general trend has been for the gender pay gap to decrease. Tables 5.5, 5.6 and 5.7 below illustrate this trend for different occupations between 1985 and 2005. Due to changes in the surveys, and in the occupational categories used, these are not strictly comparable. In general, however, the tables illustrate a significant reduction of the pay gap.

Table 5.5 Mean weekly pay (£) - all employee jobs by occupation - full-time employees, 1985

Source: New Earnings Survey
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence (18 and over for females, 21 and over for males). '..' data not available
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=5749

Table 5.6 Mean weekly pay (£) - for all employee jobs by occupation - full-time employees, 1995

Source: New Earnings Survey
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence.
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=5749

Between 1985 and 2005 the mean weekly pay of women full-time employees increased from 63% of male full-time employees' mean weekly pay to 81 %, an increase of 18 percentage points. Though the occupational categories are not strictly comparable over time, the rate of increase of women's average wages compared to men's in the higher earning category of Professional Occupations has been in line with the general trend, while the rate of increase in Managerial Occupations has been greater than this at around 24 percentage points between 1985 and 2005. The gender pay gap has also narrowed within Secretarial and Administrative Occupations and in Sales Occupations, though these remain female dominated and relatively low paid.

Table 5.7 below illustrates the gender pay gap between occupations in 2005. For all full-time employees in Scotland women's mean weekly pay was 81% of men's. Between occupations, full-time women workers' mean weekly pay varied from 70% of men's in the category of Process, Plant and Machine Operatives to 89% in Sales and Customer Service Occupations.

Table 5.7 Mean weekly pay (£) - for all employee jobs by occupation - full-time employees, 2005

Source: Annual Survey of Hours and Earnings
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence.
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

Tables 5.8 and 5.9 below provide comparisons between the mean weekly pay of male and female part-time workers by occupation. In 1997 there were a number of occupational categories for which no information was available for male part-time workers, which suggests that there were few or no male part-timers in these occupations. That there are comparisons available across all categories for 2005 is in line with the increase in part-time work by men. In 1997, the mean weekly pay of women part-time workers ranged from 106.9% of male part-time workers weekly pay in Personal and Protective Service Occupations to 71.5% in Other occupations. In 2005, the general trend was for women part-timers to earn more on average than male part-timers across a range of occupations, with the exception of Process, Plant and Machine Operatives, Elementary Occupations and Skilled Trades Occupations. The latter category showed the greatest disparity with women part-timers' mean weekly pay being on average 45% of male part-timers' mean weekly pay.

Table 5.8 Mean weekly pay (£) - for all employee jobs by occupation - part-time employees, 1997

Source: Annual Survey of Hours and Earnings
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence.
'..' data not available
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

Table 5.9 Mean weekly pay (£) - for all employee jobs by occupation - part-time employees, 2005

Source: Annual Survey of Hours and Earnings
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence.
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

Table 5.10 Gross median hourly earnings (£) by occupational group, excl. overtime, Scotland 2005

Source: Annual Survey of Hours and Earnings. C Young (2006) Low Pay in Scotland.
http://www.slpu.org.uk/

Comparison of median hourly earnings by occupational group for 2005, as shown in Table 5.10 above, show that on average women's hourly earnings were 82% of men's. This ranged from women workers in the Associated Professional and Technical category earning on average 97% of men's hourly earnings, to women workers in Skilled Trades earning on average 66% of men's hourly earnings.The relationship of women's to men's earnings varies by industry as well as by occupation, as Tables 5.11, 5.12 and 5.13 below indicate, though due to changes in industrial classification these figures are not strictly comparable over time ⁷.

Table 5.11 Mean weekly pay (£), - for all employee jobs by industry - full-time employees, 1985

Source: New Earnings Survey
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence (18 and over for females, 21 and over for males). '..' data not available.
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=5749

In 1985 full-time women workers' mean weekly pay was on average between 56% (non-manual) and 61% (manual) of full-time male workers' weekly pay for all industries, with the gender pay gap being narrowest in Professional and Scientific Services and Miscellaneous Services, and greatest in Wholesale Distribution and Commission Agents and Banking, Finance, Insurance and Business Services. By 1995, as indicated in Table 5.12 below the mean weekly pay of full-time women workers had increased on average to around 66% (65% for manual and 66% for non-manual) of male full-time workers mean weekly pay across all industries. The gender pay gap was narrowest in Education and greatest in non-manual jobs in Manufacturing.

Table 5.12 Mean weekly pay (£) - for all employee jobs by industry - full-time employees, 1995

Source: New Earnings Survey
'..' data not available
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=5749

By 2005, as Table 5.13 below indicates, the mean weekly pay of full-time women workers had again increased, reaching 81% of male full-time workers mean weekly pay across all industries and services. The gender pay gap continued to be narrowest in Education and was greatest in Financial Intermediation, Manufacturing and Hotels and Restaurants.

Table 5.13 Mean weekly pay (£) - for all employee jobs by industry - full-time employees, 2005

Source: Annual Survey of Hours and Earnings
'..' data not available.
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

Comparisons of part-time earnings by industry for 1995 and 2005, as shown in Table 5.14 below indicate the trend for women part-time workers' weekly earnings to be greater than male part-time workers' weekly earnings, having risen from 98% for all industries and services in 1995 to 101% in 2005. There is, however, a very wide variation in the earnings ratio by industry, from women part-time workers earning on average 141% of male part-time workers' mean weekly pay in the category Public Administration and Defence and Compulsory Social Security to 50% in Manufacturing. Part of the explanation for these variations lies in the prevalence of part-time work in different sectors and the importance it might have structurally for particular industries, as well as in the fact that part-time work is available at different occupational levels in different industries, and that there are different patterns in the typical distribution of part-time hours in different industries. Furthermore, there are in general much smaller numbers of male than female part-time workers, and even within a particular industry they may be working in different occupations.

Table 5.14 Mean weekly pay (£) - for all employee jobs by industry - part-time employees, 1995, 2005

Source: New Earnings Survey (1995) and Annual Survey of Hours and Earnings (2005)
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence.
Industries are defined using Standard Industrial Classification codes 1992 for 1995 and codes 2003 for 2005.
'..' data not available.
http://www.statistics.gov.uk/statbase/Product.asp?vlnk=5749; http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=13101

Table 5.15 Hourly median earnings (£) excluding over-time, private and public sector, Scotland, 2005

Source: Annual Survey of Hours and Earnings, Office for National Statistics
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence.

Not only does the ratio of women's to men's average earnings vary by occupation and industry, it varies according to whether women work in the public or the private sector. Table 5.15 above indicates that in 2005 the gender pay gap was narrowest in the public sector, where women's hourly median earnings were 97% of men's hourly median earnings compared to 80% in the private sector. The ratio of private to public sector earnings was more favourable for men, where male private sector employees earned 79% of the hourly median earnings of male public sector employees, while women private sector employees earned 65% of the median hourly earnings of women public sector employees.

The relationship between levels of qualifications and the gender pay gap is illustrated in Table 5.16 below. While, as might be expected, the highest median hourly earnings of full-time employees in 2005 were achieved by both women and men with the highest levels of qualifications, i.e. those with Degrees or equivalent or with other Higher Education qualifications, the gender pay gap was somewhat greater at these levels of qualification than at lower levels of qualification. Women with Degrees or equivalent earned 82% of men's median hourly earnings, and those with Higher Education earned 83%. However, those with GCSE grades A-C or equivalent earned 94% of men's hourly median earnings, and those with GCSE below grade C or equivalent earned 94% of men's hourly median earnings.

Table 5.16 Median hourly earnings (£) of full-time employees, by qualifications, Scotland, 2005

Source: Annual Population Survey 2005 (Jan to Dec)

There are also variations in the gender earnings ratio according to age, as Table 5.17 below indicates. While overall in 2005 women's median gross hourly earnings were 91% of men's, this ranged from 86% for the 35-49 age group to 107% for the 16-24 age group.

Table 5.17 Median gross hourly earnings (£) excluding overtime of full-time employees, by age, 2005

Source: Annual Survey of Hours and Earnings, Office for National Statistics
Notes: Employees on adult rates whose pay for the survey pay-period was not affected by absence.

These variations by age are likely to be linked to changes in women's patterns of participation in the labour market due to childbearing and childrearing, which is most likely to affect women in their thirties (as can be seen in Chapter One on Population, Households and Families), and it is notable that the gap decreases again for older age groups. For younger age groups there appears to be gender parity in pay at hourly rates, though the distribution of working hours is likely to affect the overall levels of earnings gained by women and men in these age groups.

The presence of dependent children has an impact on women's participation in the labour market, as illustrated in Chapter Four. Similarly, the presence of dependent children has an impact on earnings, as Table 5.18 below illustrates. Of full-time workers in 2005, women without dependent children earned more in relation to male full-time workers without dependent children at 91% of male median hourly earnings, while women with dependent children earned 81% of median hourly earnings of men with dependent children. By contrast women part-time workers with dependent children earned more in relation to male part-timers with dependent children, 103% of male median hourly earnings, while women part-timers without dependent children earned 98% of the median hourly earnings of male part-timers without dependent children.

Table 5.18 Median hourly earnings (£) of employees with and without dependent children, 2005

Source: Annual Population Survey 2005 (Jan to Dec)
Notes: Dependent children are those aged 0 to 15 and those aged 16 to 18 who are in full-time education.

There seems to be little impact on earnings from disability status. As Table 5.19 below illustrates the gender earnings ratio for disabled and non-disabled people is virtually the same. In 2005 full-time disabled women workers earned 88% of the median hourly earnings of full-time disabled male workers, while full-time non-disabled women workers earned 88% of the median hourly earnings of full-time non-disabled male workers, though it should be borne in mind that on average disabled people earn about 90% of the earnings of non-disabled people (Scottish Executive, 2004).

Table 5.19 Median hourly earnings of full-time employees, by disability status, Scotland, 2005

Source: Annual Population Survey 2005 (Jan to Dec)

Notes: The disabled group includes those 'Both DDA (current disability) and work-limiting disabled', ' DDA disabled (current disability) only' and 'Work-limiting disabled only'. DDA disabled (current disability) includes those who have a long-term disability which substantially limits their day-to-day activities. Work-limiting disabled includes those who have a long-term disability which affects the kind or amount of work they might do.

The data on earnings discussed so far in this chapter have been for Scotland as a whole. However, just as there are variations in earnings by industry and occupation, there are variations by regions within Scotland depending on the nature the local economy, which affects the level and type of employment opportunities available to women and men. Table 5.20 below indicates the variation in earnings by local authority area in 2005, and also provides a comparison with the UK average.

Table 5.20 Employees' gross weekly earnings, UK, Scotland, and local authority area, 2005

Source: Annual Survey of Hours and Earnings. C Young (2006) Low Pay in Scotland.
'..' data not available.
http://www.slpu.org.uk/

It should be noted that the data for some Local Authorities will be based on relatively small sample sizes. This table also illustrates the difference between the median and the mean - the latter being greater because of inclusion of atypical high earners, though the disparity in earnings ratios calculated using the median and the mean are not great. In the commentary that follows the focus will be on the median comparisons, in line with current ONS practice in interpreting ASHE data. However, it should be noted that mean earnings are used to monitor the gender pay gap internationally (see Scottish Executive, 2006).

A comparison of gross weekly earnings for all male and female employees indicated that in 2005, women in Scotland earned 65% of men's gross weekly earnings on average, compared to 61% for the UK as a whole. The variation across local authority areas ranged from women in Aberdeenshire earning 49% of men's median gross weekly earnings to women in Glasgow earning 71% of men's median gross weekly earnings. The highest level of median gross weekly earnings for women occurred in Edinburgh, where women earned £310 per week, representing 68% of male median gross weekly earnings. The highest male median gross weekly earnings occurred in Aberdeen City, where men earned £513.80 per week, with women in Aberdeen City earning above the Scottish average, £279.30 per week compared to £268.30 per week. This represented, however, only 54% of men's median gross weekly earnings. Such variations are influenced by the nature of the local economy, and it seems likely, for example, that the gender pay gap in Aberdeen and Aberdeenshire is primarily a result of high male average earnings in the oil industry, though further research would be necessary to establish the exact factors at work.

Table 5.20 above has indicated both the variation in levels of women's and men's median earnings across Scotland, and differences in the gender earnings ratio at local authority level, and has indicated that the disparity between women's and men's earnings may be large even where women earn above the average. Low pay, however, remains a significant problem for women workers in Scotland. Table 5.21 below indicates the prevalence of low pay in Scotland, as calculated by the Scottish Low Pay Unit ( SLPU). The low pay threshold ( LPT) used by the Scottish Low Pay Unit is calculated at the level of two-thirds of male median earnings. This is in contrast to the OECD definition of low pay, which is two thirds of all full time earnings, and it should be taken into account that these different measures give different figures for the proportion of low paid workers, with the SLPU measure suggesting higher levels. Using the SLPU threshold, over 350,000 workers, or 23% of the workforce in Scotland, were low paid in 2005. This represented 17% of all male workers in Scotland and 31% of all women workers in Scotland. Women were therefore almost twice as likely as men to be low paid. The table also indicates the extent of variation across Scotland. In about half of all local authorities in Scotland the numbers of men paid below the LPT are too small to register, while for the remaining areas the proportions of men paid below the LPT range from 9% in Aberdeen City to 32% in South Ayrshire. Substantial proportions of women were paid below the LPT in almost all local authority areas, ranging from 25% in Aberdeen City to 48% in Clackmannanshire.

Table 5.21 Counts and proportions of full-time employees earning less than LPT* per week UK, Scotland and local authority areas, 2005

Source: Annual Survey of Hours and Earnings. C Young (2006) Low Pay in Scotland.
* Two-thirds of male median earnings, currently £285.71 per week
'..' data not available.
http://www.slpu.org.uk/

Table 5.22 below indicates the distribution of gross hourly earnings by gender and occupation. The occupational group with the highest earners in terms of hourly rates was Managers and Senior Officials, where 10% of all employees earned more than £30.98 an hour, followed by Professionals, of whom 10% earned more than £27.19 an hour. By contrast the lowest earning categories were Sales and Customer Services, where 10% of employees earned more than £8.23 an hour, and Elementary occupations, where 10% of employees earned more than £9.03 an hour. For all occupational categories the top 10% of male earners had higher rates of pay than the top 10% of female earners, while for most categories the bottom 10% of female earners had lower rates of pay than the bottom 10% of male earners, with the exception of Professionals, where the bottom 10% of women earned less than £11.23 an hour compared to £11.09 an hour for men. In the case of Sales and Customer Services and Elementary occupations the bottom 10% of men and the bottom 10% of women had the same hourly rates.

Table 5.22 Distribution of gross hourly earnings by occupational group, excl. overtime, 2005

Source: Annual Survey of Hours and Earnings. C Young (2006) Low Pay in Scotland.
'..' data not available.
http://www.slpu.org.uk/

5.5 individual and household incomes

There are different ways in which incomes and income distribution can be calculated. The above section has discussed one source of income in the form of earnings from paid employment. This section now examines evidence of gender differences based on income from all sources combined. There are various measures of income. The first part of this section examines income which is accrued to the man or woman in their own right, known as individual income. The second section examines household income which can be used as a proxy for living standards if it has been equivalised (adjusted) for the size and composition of the household. The key assumption in such analysis is that all individuals in the household benefit equally from the combined (equivalised) income of the household. Definitions of individual and household incomes used in the data analyses which are included in this section are provided in Appendix III.

5.5.1 Individual incomes

While earnings/pensions are a key element of individual incomes, overall income is an important measure of financial well-being. Analysis of data from a range of sources has been used to provide an indicator of women's and men's individual incomes (Women and Equality Unit, 2005). The measures used are Total, Net and Disposable income ( see Appendix III). Table 5.23 below shows the trend in median individual incomes over time. In 1996/97-1997/98 women's individual total income was on average 51% of men's individual total income. By 2002/03 - 2004/05 this had increased by 9% to 60%. Over the same period women's net individual income as a proportion of men's net individual income increased from 58% to 67%, while women's disposable individual income as a proportion of men's disposable individual income increased from 54% to 63%.

Table 5.23 Median individual incomes from 1996/97 to 2004/05 (£ per week 2004/05 prices)

Source: Women and Equality Unit (2005) Individual Incomes of men and women 1996/97 to 2004/05.
Note: Years are combined due to small numbers.
http://www.womenandequalityunit.gov.uk/indiv_incomes/report2005.pdf

As indicated above the distribution of individual incomes varies with gender, with a significant gender gap, greater than that for earnings, though the individual income gender gap, like the earnings gender gap, is narrowing over time. The distribution of individual incomes also differ according to family type. Tables 5.24 and 5.25 below indicate differences between men's and women's individual incomes according to family type, including single men and women and those living in couple households, and those with and without dependent children. Comparisons are not available, however, for female and male lone parents, due to the small numbers of the latter. Table 5.24 indicates that between 1996/97-1998/99 to 2002/03-2004/05 within all family types, with the exception of single adults without children and single pensioners, women's median total individual income increased as a proportion of men's median total individual income, from 51% to 60% overall for all family types. In the case of single men and women without children, where income levels were closest there was a slight decline in women's median total individual incomes as a proportion of men's, from 97% to 94%, while for single pensioners the proportion remained the same at 94%. For those types of family where the gender gap in individual incomes was the greatest there was a decrease in the gap, though it still remained significant. For pensioner couples, where women's median total individual incomes were on average 37% of men's in 1996/97-1998/99 there was an increase to 43% by 2002/03-2004/05, while for couples with children, where women's median total individual incomes were on average 36% of men's in 1996/97-1998/99 there was an increase to 46% by 2002/03-2004/05. It should be noted that in couple households with children it is more likely that women will either be working part-time or not in work due to childcare responsibilities, and that this is likely to be a key factor in the gender income gap within this type of household. In this period the greatest increase in women's individual incomes occurred for lone parents and for women in couples with children. This is likely to have been at least in part a result of benefits and tax credits targeted at families with children. The category of women with the highest level of individual incomes were those in couples without children, who had incomes of £183 a week in 1996/97-1998/99 and of £217 a week in 2002/03-2004/05, while the category which had the lowest level of individual incomes were women in pensioner couples who had incomes of £66 per week and £89 per week for the same years respectively.

Table 5.24 Median Total Individual Income by sex and family type, 1996/97-1998/99; 2002/03-2004/05

Source: Women and Equality Unit (2005) Individual Incomes of men and women 1996/97 to 2004/05
http://www.womenandequalityunit.gov.uk/indiv_incomes/report2005.pdf

Table 5.25 Median Disposable Individual Income by sex and family type, 1996/97-1998/99; 2002/03-2004/05

Source: Women and Equality Unit (2005) Individual Incomes of men and women 1996/97 to 2004/05
http://www.womenandequalityunit.gov.uk/indiv_incomes/report2005.pdf

Table 5.25 above shows median disposable individual incomes across family types for the same period, from 1996/97-1998/99 to 2002/03-2004/05. In this case women's median disposable individual income as a proportion of men's rose in all family types, with the exception of single pensioners. The family type in which there was the greatest increase in the level of women's median disposable individual incomes was couples with children. While there was also an increase in women's median disposable incomes relative to men's in this type of family, they remained less than half that of men's on average.

The distribution of individual incomes is also subject to regional variation. As Table 5.26 below indicates, women's incomes are more concentrated towards the lower income quintiles ⁸ compared to the distribution of incomes for all adults. In 1996/97-1998/99 women's individual incomes in Scotland were less likely to be in the highest quintile compared to women's individual incomes for GB as a whole, 8% compared to 10%. By 2002/03-2004/05, however, this gap had declined slightly with 10% of women's individual incomes in Scotland in the top quintile compared to 11% for GB as a whole.

Table 5.26 Percentage distribution of Total Individual Income, 1996/97-98/99 and 2002/03-04/05, Scotland and Great Britain

Source: Women and Equality Unit (2005) Individual Incomes of men and women 1996/97 to 2004/05
http://www.womenandequalityunit.gov.uk/indiv_incomes/report2005.pdf

5.5.2 Household incomes

Just as there are gender differences in the distribution of individual incomes, household incomes vary according to the sex of the adult with the highest income in the household (the Highest Income Householder, or HIH). Analysis of Scottish Household Survey data for 2001/02 and 2005, as shown in Table 5.27 below, indicate the differential distribution of net household income depending on whether the person with the highest income was a man or a woman. This indicates that in 2001/02, where men in households had the highest income the household was much more likely to be at the upper end of income distribution than households where women in households had the highest income. In 2001/02 more than twice as many households with a male HIH had an income of over £20,000 a year than households with a female HIH, 43% compared to 17%. There were correspondingly more households with a female HIH in the lowest income category of £6,000 or less than households with a male HIH, 15% compared to 7%. By 2005, while more households had moved into higher income categories, the overall pattern was similar, with households with a male HIH being more than twice as likely to be in the highest income category, 51% compared to 22%, and households with a female HIH being more almost twice as likely to be in the lowest income category, 9% compared to 5%.

Table 5.27 Annual net household income by sex of HiH, 2001/02 and 2005 (£) (percentages)

Source: Scottish Household Survey

The tables above on individual incomes and on households according to the sex of the adult with the highest income have indicated that in general men tend to have access to higher incomes than do women. Another way of measuring gender difference in access to incomes is through examination of the position of adults in households below average income ( HBAI). More specifically, it is defined as those individuals living in households whose equivalised income is below 60% of GB median income in the same year. This measure assumes that all individuals in the household benefit equally from the combined (equivalised) income of the household. It does not provide any information about the distribution of financial resources within the household.

Table 5.28 Proportion and number of working age adults in relative low income by sex (Before and After Housing Costs), Scotland, 1996/97-2004/05

Source: Households Below Average Income, DWP
Note: Individuals in households with an equivalised net disposable income below 60% of the relevant year's GB median.

Table 5.28 above indicates the proportions and numbers of working age adults who were in households below average income from 1996/97-2004/05. In terms of numbers and of proportions the position for men and women was very similar. While in this period there were some fluctuations in absolute numbers of men and women in low income households, with sometimes the number of men being larger and sometimes the number of women being larger, the proportions of male adults of working age in this position were very similar to the proportions of female adults of working age in this position. In general fluctuations in numbers and proportions of male and female adults in below average income households between 1996/97 and 2004/05 were small, with the position remaining relatively stable.

The situation with regard to pensioner households below average income differs in certain respects from that of working age adults. Table 5.29 below indicates both the numbers and proportions of male and female pensioners in households below average income between 1996/97 and 2004/05. This shows that for all years the number of female pensioners in low income households was far greater than the number of male pensioners in low income households. In 1996/97 there were 190,000 female pensioners in households below average income (After Housing Costs) compared to 70,000 male pensioners. While by 2004/05 the numbers of both female and male pensioners in households below average income (After Housing Costs) had declined, there were still significantly more women in this situation, 90,000 compared to 50,000 men. In 1996/97 there was also a greater proportion of female than male pensioners in households below average income (After Housing Costs), 33% of all female pensioners compared to 25% of all male pensioners. By 2004/05 this proportion had declined for both female and male pensioners to 15% for male pensioners and 16% of female pensioners.

Table 5.29 Proportion and number of pensioners in relative low income by sex ( BHC and AHC), Scotland, 1996/97-2004/05

Source: Households Below Average Income, DWP
Note: Individuals in households with an equivalised net disposable income below 60% of the relevant year's GB median.

5.6 benefits and pensions

In addition to measures such as the Households Below Average Income measure, information on recipients of state benefits is an important source of data indicating the prevalence of poverty and low incomes among women and men, though such data do not always present a clear picture of the gender distribution of claimants. Furthermore, in recent years there have been a number of changes to the benefits system, including the introduction of new benefits and the modification or cessation of others. For this reason it is not possible to track precisely the changing gender balance in the population in receipt of state benefits. The tables in this section provide data on key state benefits only. With respect to other benefits such as Widow's Benefit and Bereavement Benefit, numbers of recipients are relatively small, with the former being paid exclusively to women, and women being the majority of recipients of the latter.

Table 5.30 below provides an indication of the gender differences in the types of benefits men and women received in 2000. Men were three-quarters of all Job Seeker's Allowance recipients, though this figure includes men claiming on behalf of a dependent partner (and in some cases vice versa, though probably a small number), so the extent to which women are also reliant on this benefit is unclear. Women made up the majority of those in receipt of Severe Disablement Allowance (59%), while men were the majority of Incapacity Benefit recipients (64%).

5.30 Recipients of key benefits by sex, 2000

Source: DWP Information Directorate: Work and Pensions Longitudinal Study

Historically, women have tended to be the majority of those dependent on benefits, with previously, for example, women being the majority of those dependent on Income Support. Because of changes to the benefits system in recent years, it is not possible to make direct comparisons with data for earlier periods. In particular Income Support figures have been affected by the introduction of Pension Credit from November 2003. This replaced the Minimum Income Guarantee, and extended Income Support entitlement to those aged 60+.

The gender distribution of claimants of Jobseeker's Allowance, Severe Disablement Allowance and Incapacity Benefit, remained similar for 2006, as indicated in Table 5.31 below. Data for 2006 also indicate that women were the majority of those dependent on Income Support (61%), and in particular made up 95% of lone parents dependent on Income Support. Taking together all recipients of key benefits listed in Table 5.31 above, it can be seen that men make up a majority, 53% as compared to 47% women.

Table 5.31 Recipients of key benefits, 2006

Source: DWP Information Directorate: Work and Pensions Longitudinal Study.
Note: Since October 2003, Income Support figures are affected by the introduction of Pension Credit which replaced Minimum Income Guarantee.

Women are the majority of those in receipt of state pensions and of pension credits as Tables 5.32 and 5.33 below show. In both cases women make up around two-thirds of recipients of State Pensions and of Pension Credit. Women are more likely than men to be dependent on state benefits in retirement, and overall are less likely to have access to occupational pensions schemes, especially where they are in low paid part-time employment. Women's greater dependency on benefits in their later years is an important contributory factor to their overall greater vulnerability to poverty.

Table 5.32 State Pension Caseload, 2002-2005

Source: DWP Information Directorate: Work and Pensions Longitudinal Study.

Table 5.33 Pension Credit Caseload, 2004-2005

Source: DWP Information Directorate: Work and Pensions Longitudinal Study.

Table 5.34 below indicates the types of pension scheme membership of male and female employees in 2004/05.

Table 5.34 Current pension scheme membership by age, 2004/05

Source: Family Resources Survey, DWP
"-" means numbers are nil or negligible
*Adults with both a 'personal' and an 'occupational' pension have been added into 'personal pensions' due to the small number of adults having both pension schemes.

This shows that women full-time workers were the most likely to be in occupational pension schemes - 59% of women full-time workers compared to 53% of male full-time workers. Women part-time workers were the least likely to have access to occupational pension schemes, with only 32% of this group being members of such schemes. Women part-time workers were correspondingly most likely not to have any pension provision, with 60.0% being in this position, compared to 35% of women full-time workers and 37% of male full-time workers having no provision. Of all women workers, full-timers and part-timers taken together 44% were without pension provision.

5.7 financial assets and management

Access to financial assets and products is also a measure of levels of income and wealth, as are concerns about finances and their management. This section examines evidence of differences between men and women in access to various financial resources and in their attitudes to financial matters.

Analysis of data from the Scottish Household Survey, as shown in Table 5.35 below, indicates that in 1999/2000 households where the man was the highest income earner were more likely to have access to bank accounts, savings and investments, and home contents insurance than those households where the highest income earner was a woman. The differences in access to such facilities or assets were greater for male and female HIH householders of working age than for such households throughout the population as a whole. In particular, of HIH householders of working age 58% of males had savings and investments compared to 41% of females.

Table 5.35 Possession of financial products by sex of HIH, 1999/2000 (percentages)

Source: Scottish Household Survey. Scottish Executive (2001) Scottish Household Survey Bulletin, No 5.
http://www.scotland.gov.uk/shs/docs/00063-00.asp

Analysis of data from the Family Resources Survey, as shown in Table 5.36 below, indicates that in both 1999/2000 and 2004/2005 the types of accounts and savings used by men and women were very similar overall. Men were slightly more likely to have stocks and shares, 19% of men compared to 15% of women in 1999/2000 and 16% of men compared to 13% of women in 2004/05. In general, the proportions of both men and women who had some type of account and who had some savings had increased between 1999/2000 and 2004/05.

Table 5.36 Percentage of adults by sex and type of saving, 1999/2000 and 2004/2005

Source: Family Resources Survey

Table 5.37 Proportion of savings by family status, 2004/05 (percentages)

Source: Family Resources Survey, DWP

The Family Resources Survey also provides information on the levels of savings to which different types of families have access. As Table 5.37 above shows, of all family types lone parents are least likely to have savings, with 66% of lone parent families having no savings compared to an average of 39% for all family types in 2004/05. By contrast pensioner couples and couples without children were most likely to have savings, with 80% of the former and 77% of the latter having savings. Of those having savings, the biggest group overall had only small savings of less than £1500, with 20% of all families falling into this category. The most disadvantaged groups in terms of access to no or only low savings were lone parent families (88%) followed by single men without children (74%) and single women without children (73%), though age is likely to be a factor for the latter groups, since they are likely to be relatively young.

Use of credit is also indicative of levels of access to financial resources, though may also be indicative of attitudes to debt and to financial risk. As Table 5.38 below indicates in 2005 a higher proportion of men than women used credit cards, 59% compared to 43%. Men were also slightly more likely than women to use store cards, 18% compared to 16%, and equally likely to use catalogues or mail order schemes. Women were more likely than men not to use any type of credit arrangement, 39% compared to 29%.

Table 5.38 Use of credit by sex, 2005 (percentages)

Source: Scottish Household Survey. Scottish Executive (2006) Scotland's People, 2005.
Note: Columns add up to more than 100% due to multiple response
http://www.scotland.gov.uk/Publications/2006/08/03090800/0

Where credit methods had been used to borrow money in 2005, there was little difference in the methods used by men and women, as Table 5.39 below indicates. Men were slightly more likely than women to use bank overdrafts or to have a loan from a bank, building society or credit union, but the majority of men (71%) and women (72%) had not used any credit methods to borrow money.

Table 5.39 Use of credit methods to borrow money in the last 12 months, 2005 (percentages)

Source: Scottish Household Survey. Scottish Executive (2006) Scotland's People, 2005.
Note: Columns add up to more than 100% due to multiple response
http://www.scotland.gov.uk/Publications/2006/08/03090800/0

The different levels of income and wealth that men and women have access to appears to be reflected in their concerns about managing money. As Table 5.40 below indicates, women were more likely than men to worry a lot about money, with 17% of female Highest Income Householders in 2000 saying that they worried about money almost all the time compared to 11% of male Highest Income Householders. By contrast, 27% of men said they never worried about money compared to 19% of women saying this.

Table 5.40 Frequency of worrying about money by sex of HIH, 2000 (percentages)

Source: Scottish Household Survey. Scottish Executive (2001) Scottish Household Survey Bulletin, No 5.
http://www.scotland.gov.uk/shs/docs/00063-00.asp

Similarly there is a gender difference in men's and women's perception of how well the household is managing financially. As Table 5.41 below shows for 2000, though there was no difference in the proportions of male and female Highest Income Householders who said they managed very well and who said they got by alright, male HIHs were more likely than females to say that they were managing quite well, 26% compared to 22%, while females were more likely than males to say they had some financial difficulties, 10% compared to 5%.

Table 5.41 How household is managing financially by sex of HIH, 2000 (percentages)