The gender pay gap in the global workforce

Women and the workforce

Have you ever wondered which are the most attractive countries for female professionals? This year, Nordic countries are in the top 3, namely Iceland, Sweden, and Norway, followed by New Zealand and Slovenia. Denmark, Luxembourg, Finland, Poland and Canada are also in the top 10. Overall, significant progress has been displayed by Poland, Hungary, Spain, Slovakia, and Slovenia compared to previous reports, while Finland and Switzerland have dropped down.

In the long run, and you might be surprised, Luxembourg and Israel show significant improvement in the gender pay gap. On the other hand, there was a decline in career prospects for women in countries like Portugal and the USA. The United Kingdom, for its part, drops from the 14th to the 15th spot in spite of a slight improvement in women's situation in the British workforce.

In general, women enjoy better career prospects and a smaller gender wage gap in London than in any other city in the UK. Moreover, female professionals in the UK are entitled to an average yearly salary increase of £6,300. It's also worth noting that since April 5, 2015, British companies with over 250 employees are required to publish a wage report aiming at ensuring a more transparent treatment for men and women within the local workforce.

Understanding the gender pay gap

Various factors such as family expenditure, female entrepreneurship, maternity leave, and occupational segregation explain the gender pay gap in OECD (Organization for Economic Co-operation and Development) countries. Let's face it: female entrepreneurship remains low compared to men, and this has a direct impact on the type of jobs occupied by women, flexibility, and the gender pay gap. The report points out that encouraging women to become entrepeneurs can help OECD countries to increase women's total income by at least US $2 trillion.

As mentioned above, public expenditure on family benefits is one of the factors contributing to reducing the gender pay gap. In fact, the gender pay gap is lower in countries where public expenditure on family welfare, including childcare services, is high, and where the GDP per capita is higher. Gender pay gaps are also less significant in countries where the proportion of female employers, that is women entrepreneurs with employees, is high.

On the other hand, maternity leave, male participation in the workforce, and the number of women in the services sector are some of the factors accounting for the genre pay gap increase. In short, the pay gap becomes more significant in countries granting the most generous maternity leaves, given the number of paid and partly paid leaves. Very often, women find it hard to come back into the workforce due to their loss of skills resulting from an extended leave. It's precisely why some countries, especially Nordic countries, have introduced parental leaves which allows both parents to share their family responsibilities. In those cases, the woman is not the only one being away from work for an extended period. Parental leaves also make it easier for women to get back to work sooner than expected.

In many countries, the participation of men compared to that of women in the workforce contributes to the gender pay gap. In the services sector, more women are enabled to working part-time, which also accounts for the gender pay gap. In European countries, furthermore, sectoral segregation is often pinpointed for gender inequality.

The long-term global trend

Globally, there's no significant change in the gender pay gap among OECD countries for the past decade. While 28 of the 33 OECD countries showed slight improvement, substantial disparities were observed in Chile and Portugal. Moreover, from 2000 to 2016, the gender pay gap in the UK dropped from 26% to 17% in spite of a slowdown during the past few years. Luxembourg can also boast about an 11% decrease since 2000.

Regarding women's integration into the global workforce, the most significant improvements were shown by Ireland while the gap remains quite small (4% only) in Finland, Sweden, and Norway. Elsewhere, in spite of a 9% decrease in the gap gender gap compared to 2000, women in general still find it hard to find employment in Mexico.

Female unemployment remains a big concern for most OECD countries which overshadow the progress made by Switzerland, Chile, Austria, and Denmark over the past two years, mainly due to their improving economies. For example, the female unemployment rate went from 18% in 2000 to 6% in 2016. In Greece, however, female employment experienced a sharp drop from 17% to 28% over the same period.

The number of women in full-time employment remained reasonably stable for the past few years, with the biggest improvements in Poland and Iceland. On the other hand, there was a significant increase in the number of women in part-time employment in Chile, Italy, and Austria.