Education, occupation and career expectations: determinants of the gender pay gap for UK graduates

A large proportion of the gender wage gap is usually left unexplained. In this paper, we investigate whether the unexplained component is due to misspecification. Using a sample of recent UK graduates, we introduce variables on career expectations and character traits, variables that are typically not observed. The evidence indicates that women are more altruistic and less career-oriented than men. The main difference concerns career break expectations which explains 10% of the gender wage gap in our favoured model. By omitting attitudinal variables most studies are likely to over-estimate the unexplained component of the gender wage gap. Women with a more traditional view concerning childrearing are also found to have less intensive search behaviour. These results suggest that without a change in attitudes, the gender wage gap is likely to remain at its current level.