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News

PwC Women in Work Index 2018: What's driving the gender pay gap and what gains can be made from closing it?

6.04.2018
Company: PricewaterhouseCoopers Česká republika, s.r.o.

The headline message of the 2017 OECD report on the Implementation of Gender recommendations reads ‘Some Progress on Gender Equality but Much Left to Do.’ This resonates with this year’s update of the Women in Work Index, which shows that OECD countries have made progress towards greater female economic empowerment but this pace of change has been gradual.

The Nordic countries, particularly Iceland, Sweden and Norway, continue to occupy the top three positions on the Index. Of the total 33 OECD countries, all have charted improvements in absolute terms from last year, with the exception of Finland, Switzerland, Chile and Australia.

The UK has fallen back from 14th to 15th position. Although it has made strides in female employment prospects, its gains have been outpaced by improvements in female job market conditions and gender pay gap elsewhere.

The gender pay gap continues to be a policy focus in the UK, starting with increased transparency. From 5 April 2017, British employers with more than 250 staff must publish data on their gender pay gaps. Early disclosures reveal just how far we have to go to close the gap, but greater transparency will help shine a light on the factors contributing to the gap and hold businesses to account to take action.

This year, we take a closer look at the drivers of the pay gap across the OECD, by exploiting cross-time and cross-country differences in the data. We find that besides structural factors, government spending on family benefits, the share of female entrepreneurs, maternity leave and occupational segregation help explain the gender pay gap.

These findings suggest that governments should focus on policy levers that provide enhanced social support to women and families to encourage participation in work. Encouraging more female entrepreneurship as well as improving opportunities for working women in higher-paying, higher-skilled roles through flexibility can also contribute to greater gender pay equality.

The prize is clear: closing the pay gap across the OECD could increase total female earnings by US$2 trillion.

Please do get in touch to discuss how we can help your organisation address these issues. 

Yong Jing Teow, Author and Economist

Swati Utkarshini, Author and Economist

Foreword Saloni Goel, Author and Economist

Key findings

  • Iceland, Sweden and Norway remain the top 3 performing OECD countries. 
  • The UK has fallen back from 14th to 15th position as improvements in female job market conditions and the gender pay gap in other countries has outpaced the gains achieved in the UK.
  • Poland stands out for achieving the largest annual improvement, rising from 12th to 9th place due to a fall in female unemployment and an increase in the full-time employment rate for women.
  • Luxembourg has seen the biggest improvement in its rank over the long-term, while Portugal has seen the largest negative movement.
  • Our analysis of the drivers of the gender pay gap across the OECD shows that government spending on family benefits, the share of female entrepreneurs, maternity leave and occupational segregation help explain the gender pay gap.
  • Government policies to reduce the gender pay gap should focus on enhancing social support to families to help women stay in, or return to work, and promoting female entrepreneurship. 
  • Business can also help by improving opportunities for working women in higher-paying, higher-skilled roles through greater flexibility.
  • Fully closing the gender pay gap could increase total female earnings by US$2 trillion across the OECD. 
  • There are significant economic benefits in the long-term from increasing the female employment rate to match that of Sweden. The GDP gains across the OECD could be over US$6 trillion

 

Gender pay gap in the Czech Republic reached 21% and female boardroom representation reached 9% in 2016. Increasing female employment rates to Swedish levels would mean a GDP increase by 4.4%, the study says.

>> Read the report.

Tags: Business Development | Human Resources |

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