Without looking, can you guess which EU country has the lowest gender pay gap?
I put this question out earlier on Twitter and most people suggested the Netherlands or one of the Scandinavian countries; a reasonable assumption given yesterday’s news from the World Economic Forum (WEF). A good call but wrong. All of the Nordic countries have gender pay gaps higher than the EU average, while the country with the lowest pay gap is……
Italy! Yes, that’s right, Italy, closely followed by Malta.
As this graph, based on 2007 data (which is the most recent I could find), shows, in Italy and Malta, the gap between male and female earnings is only around 5 percent. The Scandinavian countries, despite all their efforts to help women return to work, still have gender pay gaps of around 18 percent.
So how come Denmark, Sweden and Finland, all in the top ten on the WEF’s gender equality index, have higher gender pay gaps than Italy, which is 74th, behind Ghana, Tanzania and Jamaica?
The next graph gives us a clue. The countries with the lowest gender pay gaps, Italy, Poland and, Malta, also have relatively low levels of female employment. All three are well below the Lisbon target rate for women’s employment.
I couldn’t find any data on the age-related gender pay gap in other EU countries. However, if the pattern in other advanced economies is similar to that of the UK and the USA, which I covered in yesterday’s post, then the women re-entering the workforce after having children would earn less money than men of a similar age. If fewer of them re-join the workforce then there would be fewer lower earners to bring down the average female pay rate. A reasonable hypothesis might therefore be that it is much less common for women in Italy to return to work after childbirth than it is in Denmark. The findings of this paper from the Institute for the Study of Labor seem to support this supposition. The authors note that poor state childcare provision and rigid labour markets keep many women out of the labour force:
In Southern Europe where both part-time work and childcare are rare, and optional parental leave is short, women need to rely on family support in order to continue working when their children are young.
The Scandinavian countries, in contrast, have gone to great lengths to make it easier for women with families to work. This has been so successful that female and male employment are almost equal in Denmark, Sweden and Finland. However, all of these countries still have relatively high gender pay gaps, indicating that, as in the UK, women returning to the workforce tend to do lower paid jobs than men of a similar age.
The Scandinavian countries may, in the words of the WEF, “demonstrate the greatest equality between men and women” but cultural beliefs about whose responsibility it is to look after the children are as deeply ingrained there as anywhere else. These figures seem to imply that in the Nordic countries, just as in Britain, working women take lower paid jobs closer to home and do most of the fetching and carrying of children.
Having said that, this is a hypothesis based on the data I could find. If someone has gender pay gap data related to age and numbers of children for the EU countries, similar to the UK data at that I dug up for yesterday’s post, I would be fascinated to see it.