Women in full-time work in the UK are paid, on average, 17.2 per cent less than men. Since the Equal Pay Act was introduced in 1970, the gender pay gap has been a subject of much debate. In late 2007, Margaret Prosser, deputy chair of the Equality and Human Rights Commission, said: “Women who work full time are cheated out of around £330,0000 over the course of their lifetime.”

However, a controversial report published this week by the Institute of Economic Affairs suggests that the pay gap is caused not by discrimination but by market forces and the choices that women make. In Should We Mind the Gap?, J. R. Shackleton, Dean of the Business School at the University of East London, wrote that there was little evidence of direct discrimination by employers against women and that discrimination was usually inferred from the gap, rather than being based on evidence.

In a competitive market, wages are determined by supply and demand — and women's work and lifestyle preferences account for much of the disparity, Professor Shackleton argues. More than a quarter of women in higher education are studying nursing or education, leading to lower-paid careers in the public sector; more than 70 per cent of undergraduates who study English or psychology, which also tend to result in lower-paid jobs, are female.

In one study cited by Professor Shackleton, men were more likely to see themselves as very ambitious, while for women job satisfaction, being valued by their employer and doing a socially useful job were often more important. Two thirds expect to take career breaks. The author agreed that women doing part-time work were penalised, but he said that part-time workers tend to be happier than their full-time peers. Men's higher salaries carried with them other disadvantages — poorer working conditions, a higher likelihood of serious injury at work and a higher risk of being made redundant.

“Many people assume that the pay gap is caused by discrimination, but it's simply not the case,” Professor Shackleton says. Attempts to address the gap through legislation can be counterproductive. “Forcing employers to increase pay is an extremely costly business and means job cuts for men and women.”

Kat Banyard, campaigns officer at the Fawcett Society, which aims to reduce inequality, said that the pay gap was largely because of the “motherhood penalty” and outdated perceptions of female roles.

“The claim that sex discrimination is not a cause of the pay gap is unsubstantiated and sends a misleading message. Government research proves that up to 40 per cent is based on discrimination and prejudice against the value of women's work,” she said. “Women caring for children are often forced to take on low-paying or part-time jobs. That's not a free choice.”

Times Recommends

• Inspirational leadership
• How to get a new job
• The reluctant CEO