Differential Returns to Human Capital in Full-time and Part-time Employment

In Britain, part-time employment is very important among women, but in such employment they tend to receive lower hourly pay. For example, according to the 1980 Women and Employment Survey (WES) reported on by Martin and Roberts (1984), 44 per cent of employed women worked part-time (their own assessment), and the mean hourly wage for part-time women workers was £1.60 compared wtih £1.90 for women in full-time jobs. In the late 1980s, a similar percentage of women were in part-time employment, and it continues to attract lower average pay than full-time employment. One purpose of the analysis in this paper is to estimate whether the lower average pay in part-time employment arises primarily because women who take part-time jobs have less human capital, or because wage offers are lower for part-time jobs, thereby giving women a lower return on their human capital in these jobs. A second purpose is to measure the contribution of differential returns in part-time employment to the average pay gap between men and women.