00:00:02 Intro
00:00:33 Mary McCaughey
Hello and welcome to this special episode of Eurofound Talks: Eurofound talks gender equality. Equality is a key principle of the European Pillar of Social Rights. It reaffirms that women and men have the right to equal pay for work of equal value. We have a Gender Equality Strategy, which lays down a series of objectives and actions to make progress towards a more gender-equal Europe by 2025, and it is quite simply one of the core objectives of the EU. Women and men should receive equal pay for equal work – and we have worked hard to ensure that in terms of both the gender employment gap and the gender pay gap, there has been progress at least in the right direction. But in both areas, in terms of income and in terms of access to and participation in the labour market, there are still considerable gaps, and we are looking to close them, as we have targets to do so by 2030 at the latest.
It would seem that despite all of these principles and instruments, progress towards gender equality both at the workplace and outside of it has been progressing – but haphazardly. So today I am joined by Carlos Vacas-Soriano and Barbara Gerstenberger, who are both experts in this area. They are going to discuss the gender pay gap and the gender employment gap, and to look at what these resistant drivers really are that keep us from achieving our objectives, as well as looking at what policymakers can actually do to close these gaps. So to set the scene, I’d like to go to you first, Carlos. We’ll talk about the gender pay gap now – that’s different from the gender employment gap, of course. Can you give us an idea across the EU where it is highest, where it is lowest, and what the trends have been in recent years?
00:02:29 Carlos Vacas-Soriano
Yes. So currently, according to the latest data, which refers to 2021, it stands at almost 13%. That’s using a measure for hourly wages, so that would mean that on average, a woman will get a wage 12.7% lower per hour than a man. That’s the EU average. And then, of course, we see quite significant differences across countries. For example, if we look at those where this gap is larger, we find it at more than 20% in Estonia, and close to that in Austria or Germany. At the other end of the scale, it’s rather low – below 5% – in countries such as Belgium, Italy, Poland, Slovenia and Romania. And for the first time, the gender pay gap is in fact negative in Luxembourg, so basically what you see in Luxembourg is a very low value of 0.2%, but it is negative, meaning that women get higher wages than men. The reason why this is the first time we see it is because in the last few years, we have seen declining values in the gender pay gap, so the gender pay gap is narrowing over time. For example, to give you the data for the EU as a whole, it was almost 16% in 2010, and, as I told you, it was below 13% in 2021. So we have seen a decline of 3 percentage points in the magnitude of the gap over one decade.
00:04:28 Mary McCaughey
But you’ve also indicated quite a wide range of country differences there, and what’s quite surprising for me is to hear that Germany and Austria, for example are up in the 20% bracket. Maybe you can explain a little bit about these country differences specifically. I know we can’t go into them all in detail, but just to give us an idea before we drill down a little bit further.
00:04:51 Carlos Vacas-Soriano
Yes. First of all, it’s important to mention that even in those countries where I told you it’s much higher, it has still declined, so basically we see in the data …
00:05:02 Mary McCaughey
… so the trend is going in the correct way for all of these countries.
00:05:05 Carlos Vacas-Soriano
Across most of the countries, there has been a decline.
00:05:09 Mary McCaughey
But there is resistance in some still.
00:05:12 Carlos Vacas-Soriano
I’m not sure about ‘resistance’ – it hasn’t declined in all of them, but yes, in most of them, and quite significantly, especially in the most recent years. First, I would like to make a very general point: we shouldn’t jump to the conclusion that a lower gender pay gap means a better situation for women in the labour market. We are going to talk about the employment gap later. So it would be easy to say, that a country with a lower gender pay gap means that women are in a better situation in the labour market. That’s not necessarily correct if we use the example of Germany that you mentioned, or Sweden, Finland or Denmark, which are countries that have always been characterised as being quite high on the gender equality agenda, because they manage to integrate women into the labour market, as women work significantly more there than in other countries. But you see still that the gender pay gap is quite high.
On the contrary, there are countries that are famous for the opposite, where women participate much less in the workforce, such as Italy or Romania; but in those countries, there is a very low gender pay gap. One of the reasons why is because in this second group of countries – where women participate much less in employment – what happens is that women face more barriers when going from inactivity into employment. Maybe they spend more time taking care of family members, or just being inactive. The women who decide to participate in the labour market are those who have very high educational levels. So when they participate, they tend to get good pay, because they get relatively good jobs; so as a result, you see a low gender pay gap. But can you say that the situation of females is better in those countries?
00:07:28 Mary McCaughey
Not necessarily.
00:07:29 Carlos Vacas-Soriano
You have to look at the wider picture.
00:07:30 Mary McCaughey
That’s an interesting point, because if you look at income, are you seeing that the pay gap is higher when you’re talking about these higher earners? Or is it in fact amongst the lower earners?
00:07:48 Carlos Vacas-Soriano
When you distinguish among levels of pay, maybe it’s counterintuitive, but the gender pay gap tends to be larger among higher-wage earners. For example, if you distinguish between the types of jobs that people are working at, so whether they are higher-paying jobs or lower-paying jobs, you’re going to see an average across countries, and in each European Union Member State you are going to see that the gender pay gap is larger in the better-paying jobs. That is telling you two things. On the one hand, we know women are less likely to be in those jobs, so we can say that they suffer a penalty in the sense that they have less access to those types of better-paying jobs; and once they do access those jobs, they face a large gender pay gap in them. And then the gender pay gap is much lower in jobs that are characterised by lower wages. Even though it may sound counterintuitive, it’s ultimately a matter of the higher the wage level, the wider the scope for wage disparities. When you are on minimum wage, there is little scope for large wage disparities to emerge.
00:09:22 Mary McCaughey
But it still seems to mean that if you earn more, the more you earn as a woman, the bigger the gap is between you and the man in the same job.
00:09:30 Carlos Vacas-Soriano
Yes, exactly.
00:09:33 Mary McCaughey
And where are we seeing that? Is it in ICT? Is it in health? In what sectors is that kind of pay gap most pronounced?
00:09:46 Carlos Vacas-Soriano
In terms of sectors, again it’s tricky, because what you see – and this is related to the need to always look at the employment gap as well – is that sometimes in those sectors where the mix of men and women is more even, there is no segregation by gender, such as financial services, and there your see a larger pay gap. On the contrary, in male-dominated sectors, such as construction or mining, the gap is lower. This is perhaps because women in those sectors are not doing the jobs for which the sector is well known, but they are instead in office jobs in the mining or construction sectors. So the gender pay gap tends to be lower there. But the general point is the same as I told you before: the higher the wage level, the wider the scope for the gaps to emerge, and the gender pay gap will tend to be wider in those sectors characterised by higher wage levels.
00:10:57 Mary McCaughey
And yet one of the interesting things about the labour market recently is that there are more women entering into the highest quintile of jobs than ever before. So while they may be entering into those jobs more, their experience will be that the gap is greater between them and the men whom they find themselves with.
00:11:17 Carlos Vacas-Soriano
Yes, but it depends on what you look at. If you look only at very high-paying jobs, the gap may be larger, but overall the gap is narrowing. You see declining gender pay gaps, because if you get more women into these high-paid sectors, then while the gap may increase if you only look at those sectors, when you look at the whole picture of the labour market, woman are managing to close the gap, and that’s what you see in most countries.
00:11:52 Mary McCaughey
We’ve talked before about the various elements at play here, and they’re complicated and multidimensional, so we’re not going to touch on all of them again today. But one of the issues is about women working part time. We know they’re more likely to do that to manage their work-life balance to take on care responsibilities and other issues. But perhaps you can talk to us a little bit about this sort of part-time penalty, because we know it applies more to women than to men. Is that contributing to the gender pay gap in a significant way?
00:12:29 Carlos Vacas-Soriano
Yes. I would say there are two main reasons we know why the gender pay gap exists. One relates to the sector where one works, so women tend to work more in lower-paying sectors, which explains part of the gender pay gap. The second reason is part-time employment: we know women are much more likely to work part time. So of course that’s going to result in a larger gender pay gap. It’s important to remember that in this measure that we have for the gender gap, we are talking about hourly wages; so it is not only the fact that women working more part time will have a lower monthly wage, which makes sense if you are working fewer hours. It also means that even in hourly terms, taking into account that you work fewer hours, there is still a penalty. The reason is because we know, based on research, that doesn’t matter if you’re a woman or a man ¬–¬ people working part time tend to get lower wages than those working full -time in terms of the hourly rate too; and since women are more likely to work part time, they suffer as a result. This is one of the reasons for the gender pay gap.
00:13:51 Mary McCaughey
So we know that that’s one of the reasons, and I suppose that’s slightly intuitive – we could imagine that being the case. But what other driving forces are there behind this?
00:14:02 Carlos Vacas-Soriano
The sectors: as women tend to work in lower-paying sectors. And another reason is that women are less likely to work in jobs with a supervisory role, so it may be the result of the glass ceiling that women may be less likely to access those positions. So those would be the three main factors. But it’s important to mention that when we try to explain why the gender pay gap exists, when we use the survey data we have available to try to characterise women and men and see what different characteristics they have, what different jobs they do, we can only explain a third of this gender pay gap. So that means that on average, we cannot explain two thirds of the gender pay gap that exists across European Union countries with the data we have.
00:15:08 Mary McCaughey
So how do we explain it, Carlos?
00:15:10 Carlos Vacas-Soriano
The way the research goes about it – both in the past and to certain extent still now – is that the part that we cannot explain, which is very significant – around two thirds of the gender pay gap – has been used as a proxy for discrimination. So if we cannot explain it with the data we have, it has to mean that women and men are being paid differently for work with the same attributes or the same value. So that would be like a proxy for discrimination, which of course – as research shows – exists. It can take forms such as unfair promotion and demotion practices at the workplace. Now that doesn’t mean that the two thirds of the gender pay gap that we cannot explain is all due to discrimination. There are other bodies of research that look into the fact that surveys are quite limited in term of the information that you can gather from women and men in the labour market. So there are other factors that seem to be important, which surveys fail to gather correctly. The most often mentioned factor is the cumulative length of men’s and women’s professional experience …
00:16:31 Mary McCaughey
… which feeds into that part-time issue as well.
00:16:32 Carlos Vacas-Soriano
Yes. So how long have they been working without interruptions, for example. Because we know the main issue behind women lagging behind in pay emerges once they take maternity leave; we know that’s when it starts. So we cannot really capture that well with the data we have in the surveys. If we were able to, we could explain more of the gender pay gap, but we can’t. Other things that we cannot capture in surveys and could be important to understand the gender pay gap …
00:17:10 Mary McCaughey
Women don’t shout loud enough for a pay rise.
00:17:13 Carlos Vacas-Soriano
Yes, that has been mentioned as well: the gender differences in attitudes and behaviours, for example when bargaining your wage with the employer, or the negotiating skills you may have – how pushy you may be to get a pay rise. This could be another factor behind the gender pay gap, but with the data we have, we just don’t know.
00:17:38 Mary McCaughey
But we can extract something from it in knowing that there is an attitudinal issue – whether it’s latent discrimination or just a lack of action, in a way where some of the characteristics learned by women prevent that ongoing upward spiral in their pay over the years. But of course, the fundamental issue that we’re looking at, which does occupy our minds, is the part-time issue, and maybe also precarious work, because you’re in and out of the market a lot more, and that feeling of not being able to have a solid longitudinal approach to your career and your pay does penalise you here.
00:18:24 Carlos Vacas-Soriano
Yes. Based on the data, we know that working part-time is one of the main issues. Then the other important thing we have to infer from other research – but there is no direct data on it – is the fact that your career gets interrupted at some point. That is essential: we cannot capture it well with survey data at the moment. But it is the main factor, because before that break happens in the labour market, there’s not really a significant gender pay gap. It starts after breaks.
00:19:00 Mary McCaughey
That’s a nice link in to what I want to talk to you, about, Barbara: the labour market and the employment gap. When we look at the gender employment gap, it is about where women are in the labour market and why they are not, if they are not. Can you talk to us a little bit about the differentiation between pay and the employment gap? And where are we seeing that most in Europe?
00:19:26 Barbara Gerstenberger
Yes. Of course there is a link between the gender employment gap and the gender pay gap. Let’s first define what we understand by the gender employment gap. It’s the difference between the employment rates of men and women. Eurostat, the EU Statistical Office, looks at the population between 20 and 64 years old, and then calculates the share of people who are working, or – as Eurostat puts it – who are engaged in productive activity, either as employees or as self-employed people. In 2022, which is the last year for which we have confirmed data, 80% of men in this group of 20 to 64-year-olds were working, while it was 69.3% for women. That is a gap of more than 10% – to be very precise, 10.7 percentage points. This is a tiny improvement if we compare to the year before, 2021, where the gap stood at 10.5 percentage points. And if we look back a little bit further, we see that we are absolutely on the right trajectory: 15/16 years ago, in 2008, we were still at a gender employment gap of 14 percentage points.
So we are going in the right direction, but at the same time it is difficult to see how, at this pace, we will be able to reach the EU’s goal for reducing the gender employment gap to below 6 percentage points by 2030. So we have to hurry up here. And that is the situation everywhere in the EU. The employment rate for men is higher than that for women in all EU Member States, but in some of them, the difference is rather small. The Baltic countries (Lithuania, Estonia and Latvia) and Finland stand out, with a gap of around 3 percentage points, so already below the target that we have set ourselves as the European Union. At the other end of the spectrum, Italy and Greece have a gender employment gap of around 20 percentage points. Keep in mind what Carlos said earlier: Italy has a gender employment gap of 20 percentage points and a gender pay gap of only around 5%. That is quite interesting, and Carlos already gave a bit of an explanation why that could be the case.
00:22:01 Mary McCaughey
And what do you think are the factors that are at play there, Barbara? What are the most defined issues that we’re looking at?
00:22:09 Barbara Gerstenberger
The availability of public childcare is vital, along with the costs and quality, and how compatible the childcare on offer is with normal working hours. All of this plays a role. But even if good childcare is offered, the actual take-up of this opportunity appears to reflect so-called ideals of care, meaning that there are different cultural expectations and cultural values in relation to child-rearing. So is it first and foremost the mother’s task to look after a child, or is good-quality public childcare an accepted – or even preferred – advantageous alternative? Secondly, the flexibility of employment and working-time measures will always help to reconcile work and family duties, and if companies offer this, or if there are laws that regulate it, this increases women’s labour-market attachment. But a little caveat here: if they are exclusively used by women – and we have talked about this just now – there is a risk that reducing hours working part-time is interpreted as a lack of commitment, and that can hamper women’s career progression, which again leads to pay differences.
00:23:47 Mary McCaughey
It is interesting what you’re saying there about the availability of good-quality childcare, because that is the mantra amongst many – both policymakers and also people in society. But what you’re saying is that we also see a gap emerging between those who, were they to have full-scale childcare facilities available, would still not opt to choose them as distinct from joining the labour market.
00:24:15 Barbara Gerstenberger
The other point is that, of course, a lack of childcare should in theory impact fathers just as much as mothers. There is a lack of opportunity to have your young child looked after by somebody other than the parents. Funnily enough, it is women – mothers – who bear the brunt of this additional care responsibility, and fathers are much more removed from these responsibilities in most cases.
00:24:44 Mary McCaughey
You can understand some elements of that with a second, third or even fourth child. But we can see that there is no gender pay gap up until that first child, yet it’s when that happens that the decision is made on the basis of future earning potential as well. Then beyond that, you’ve already lost your rung on the ladder, in a way that makes it more beneficial for the man to continue working. But Barbara, is this something that we can actually resolve, or is it an intractable problem? Because we previously talked about gender segregation in the labour market and how that impacts on the way in which women operate within the labour market. But if they can’t even get to the labour market, how can we even begin to deal with that, when cultural norms are so varied across so many different Member States?
00:25:48 Barbara Gerstenberger
I think it really starts very early in the course of your life in career planning, and labour-market segregation is part of the explanation here, because we see that despite closing the gender employment gap on the one hand – even if rather slowly – jobs are not becoming more gender-mixed. A job is gender-mixed if no more than 60% of men or women are in a particular job, so you have a good balance of between 40% and 60% of men and women in that job. Back in 1998, about a third of jobs were gender-mixed (27%). By 2019, it was down to 18%, so only one fifth. What makes this problematic is that when women join the labour market, they tend to join female-dominated sectors and occupations. Many of those female-dominated occupations are low-paid, such as personal care workers, cleaners, helpers and general clerks. More than 80% of workers in those sectors are women, and they are low-paid jobs.
It’s not the complete picture: there are also a lot of women who have benefited –more than men – from employment growth in well-paid jobs. Interestingly, these well-paid jobs that women take up are predominantly in state-paid sectors, such as public administration, health and education. These are sectors where working-time flexibility, reduced hours and part-time work are much easier than in a lot of medium- and well-paid jobs in the private sector. So this career choice seems to be made already with the idea in mind: ‘I want to balance care responsibility – raising a family – with my career, so I’m probably better off in a public-sector job than in a private-sector job.’ So at the start, before the gender pay gap even kicks in, decisions are made based on the future possibility to combine work and life better.
00:28:29 Mary McCaughey
Again, that is to a large degree about social or cultural norms. Because in countries where it’s a legal obligation to be provided with a year’s maternity or parental leave on the birth of a child, do we see the same kind of issues emerging?
00:28:49 Barbara Gerstenberger
No. In countries with good childcare and leave provisions, we clearly see a much smaller gender employment gap and better possibilities for women.
00:29:07 Mary McCaughey
Ultimately, it comes down to having babies: is that what we’re saying? Do maternity leave (and other care responsibilities – but those care responsibilities tend to be at a later stage in a woman’s life, such as looking after elderly parents, which comes at a later point in their career) and this childcare issue really play the most significant role in the gender employment gap? Or are we also looking at this embedded structural element as being one of the bigger obstacles?
00:29:45 Barbara Gerstenberger
I think it’s not having babies at such: it is who takes care of the babies afterwards. Let me illustrate that by looking at working time. On average, men spend a little over 42 hours per week in paid work, while women, on average, spend a little less than 37 hours per week. So that’s a difference of 6 hours. A large factor behind this difference is again that women are more likely to work part time. A third of women (28%) work part time; only 8% of men do so.
In the European Working Conditions Survey, we also ask about time spent on unpaid work (care activities, cooking, housework, etc.), and here, the picture is exactly the reverse: women spend on average 13 hours more than men on unpaid work each week – more than 30 hours for women, and less than 20 for men. And it’s quite interesting to see that in countries where the gap in paid work is smaller – such as France, Luxembourg, Sweden, Finland and the Baltic countries – the difference in time spent on unpaid work is also smaller. So there seems to be a link: the more equal sharing of responsibilities in one area – paid work – is linked to more equal sharing of the burden in the other area – unpaid work. So it really is this balance of who takes on that responsibility – who cuts back in paid work in order to have the time for unpaid tasks – where the differences are most apparent, and where I would argue the main problem lies.
00:31:43 Mary McCaughey
It’s funny, because as you talk about that, I remember one of the most shocking statistics is that if you add unpaid and paid work together, a woman actually works 8 full weeks a year more than a man, which, when you look at that statistic in its raw, stark terms, really does make you consider what is possible and what can be done to radically improve the situation so that by 2030, we have managed to close these gaps to the targets that are in place. It would seem to be almost impossible at this point, but perhaps I’m being extremely negative. This is where I would ask the two of you to come back to me, and tell me, if you had the policymakers in the room with you – if you did actually have the possibility of shaping things – give me three ideas that you would bring to the table in terms of how we could close these gaps. Carlos?
00:32:48 Carlos Vacas-Soriano
I will start with one of them. Barbara already mentioned it extensively – it’s the fact of childcare provision. Because we have said repeatedly in this conversation that a very important step where we see gaps emerging between women and men is with this career interruption related to maternity. It doesn’t have to be the case, but we know in practice that the woman is the one who gets the higher share of the responsibility. So providing childcare that is easily accessible and affordable is going to make it easier for women particularly – families, but especially women, since they take more responsibility on the issue – to combine their personal life with work. This will allow them to have fewer interruptions – or shorter or no interruptions – and that will help them in narrowing the employment gap so that they can still participate in the labour market and avoid the interruption that starts the emergence of the gender pay gap.
In relation to the second reason, apart from part-time work for women, the issue is sectoral segregation. Women tend to work in sectors that pay less, so, as Barbara mentioned, women tend to specialise in certain sectors. Working towards making sectors more gender-balanced will help. For example, we know there are fewer women in male-dominated sectors like science, technology and mathematics. These type of fields are characterised in general by higher wage levels, so the gap is closing down. Women are increasingly accessing these sectors as well. But the more it’s done, the more it will help to close the gender pay gap, because women will be able to work in these higher-paying sectors as well. So that would be a second target. That could be achieved by providing better gender-sensitive career counselling, for example when you’re still at university or secondary school, or by providing better career opportunities or prospects in sectors where women are more present, such as the care sector. Improving the working conditions will offer more career perspectives.
00:35:48 Mary McCaughey
Barbara, what can you add to this?
00:35:50 Barbara Gerstenberger
It’s difficult to add, but my main point is that we need to address the unequal distribution of care responsibilities between men and women. As I outlined, this influences career choices, career progression, and therefore also earnings over the life course. That is not an easy thing to achieve through policies, because it is so embedded in cultures and values. So I think one possibility is to set more and better examples for men across the professional spectrum, especially in higher-level positions with supervisory tasks, to take paternity leave and parental leave to which they have a right, to reduce hours, and to work part time if there are young children at home. Promoting these examples encourage others to follow them, I think that is a very important point.
In terms of policy, I would argue that reviewing working time and examining the possibility of a working-time reduction in general, is another thing that we need to explore, given that as we can see in the European Working Conditions Survey, 45% of workers say they would prefer to work shorter hours. This is most prevalent among fathers with children: they are most likely to say that they would like to work fewer hours. So what we see today as the status quo is not what people want. I think working time is a big issue here, and could really make a difference.
00:37:37 Mary McCaughey
We’ve tackled a gamut or a range of issues by looking at childcare provisions and provisions to allow women to go back to work, but also at the sectoral segregation aspect, in terms of both the pay gap and the employment gap. Then there is the unequal distribution of tasks, which is often cultural and embedded in our societies, and how we expect things to be. So we need to make an effort at large to change that. And as regards working time, we are moving towards looking at least at a 4-day week, and perhaps this new world of work, which encourages us to have a hybrid approach to working for those who are in a position to do so, could also find its way in facilitating this by making work-life issues or imbalances a little bit fairer for both women and men.
But what does come to mind as we talk about this, is that it all seems to hinge around – although we’re taking into consideration so many other aspects, like sectoral and occupational distribution – a time where demographic change sees us with an ageing population. We have low fertility rates, so we’re not reproducing at the level that we would wish to be if we’re going to maintain this kind of economic activity; yet we’re not facilitating that in a way that makes sense across the board. So I think it would be useful for us to integrate this into the discussion about how that could also boost another policy area, which is to try and address the ageing population issues that are emerging in our society. But that is for another day; perhaps we will come back and discuss that later.
So thank you both very much. I know it was a bit of a whistle-stop tour of the gender pay gap and the gender employment gap that most people have spent decades researching and analysing. But thank you for your contributions, and I hope you, as a listener, have enjoyed today’s talk, which is to mark 8 March, International Women’s Day 2024. And don’t forget that you can find this episode – but also the other episodes on gender equality – on our podcast series, and you will find us on Spotify or wherever you get your podcasts. So don’t forget to follow us there, and also to access any of the information that you have found as discussed today, which is on our website according to the topics that you’ve listened to. So until next time, when Eurofound talks to you.
00:40:12 Outro
