Abstract/Summary

Despite its importance to gender inequality, household incomes, and labour markets, the reasons behind Britain being one of the last major western nations to introduce equal pay have been relatively neglected. This article first examines the campaign for equal pay from the late Victorian era to its eventual introduction in 1970. Economists predicted that equal pay would produce substantial female unemployment, but policy-makers correctly doubted this – as data collected from West European and North American earlier-adopters showed no significant rise in female unemployment. Female employment rose substantially during Britain’s equal pay implementation – while, in contrast to broadly static earnings differentials from 1950-70, there was a significant reduction in the gender pay gap, followed by a longer-term trend of narrowing differentials. We explore why equal pay expanded female employment – given the absence of any sudden rise in women workers’ productivity, or substantial acceleration of structural change in favour of female-employing sectors. We find that equal pay compelled employers to re-evaluate the real worth of female workers, given their substantial relative human capital growth since 1945. This had not hitherto been reflected in relative earnings, owing to barriers such as segmented labour markets, monopsonistic employers, and collective bargaining procedures, that fossilised traditional gender pay differentials.