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19 March 2014

Women in Work – Nordic countries lead the way for gender equality

By Yong Jing Teow

The latest update of PwC’s Women in Work Index reveals that the Nordic countries, once again, top our rankings of 27 OECD countries in achieving gender equality in the labour market.

The update of the PwC Women in Work Index shows that Norway is still at pole position, followed by Denmark, Sweden, New Zealand and Finland. Our Index combines five key indicators of female economic empowerment: the equality of earnings with men; the proportion of women in work, both in absolute terms and relative to men; the female unemployment rate; and the proportion of women in full-time employment.

The Netherlands and Ireland have been the most notable risers in our index since last year, both moving up 5 positions due in particular to narrower gender wage gaps. The Netherlands has closed its gap by around 3 percentage points since the last update of the Index, while Ireland’s gender wage gap is around a fifth of what it was in 2000.

However, the economic crisis continues to take its toll on absolute performance in the southern European countries. Spain saw its gender wage gap widen recently, reversing some of the positive gains made in previous years, and the gap in Portugal has continuously widened since 2000. More worryingly, female unemployment is on the rise in both of these countries and Greece, which is partly due to their weak economies in recent years.

OECD-rank

Taking a longer term view, it is clear that while the OECD countries in general have made positive gains in gender equality in the labour market between 2000 and 2012, including narrowing the wage gap, much more remains to be done. The female unemployment rate has increased since 2007 and the proportion of women in full-time employment across the OECD has declined.

Flexible or part-time working is still a predominantly female domain, and is often the solution for many women to juggle their careers and family responsibilities. This is one of the themes in Project 28-40, a research project carried out by PwC and Opportunity Now, which surveys 25,000 women in the UK on the barriers holding women back from progressing in their careers. It resonated with the experiences of my female friends and relatives who are mothers – when it comes down to who will take time off to care for children, it seems that the woman is usually left holding the baby. Even after returning to work, it’s more likely that women, rather than men, try to fit their careers around children by working part-time or flexibly. It certainly doesn’t help that childcare costs can be prohibitively expensive in some countries.

The full results of the study will be released next month, but initial findings suggest that although initiatives such as flexible working may be helpful in the short-term, it can be counterproductive. Although men are increasingly involved in raising children, there needs to be a fundamental shift in cultural attitudes that assume women to be primary caregivers, or are less invested in their careers. One of the reasons the Nordic countries top the Index is their recognition that both men and women should be able to balance their career and family life. For example, childcare and household tasks are shared more evenly between parents in these countries, which has enabled a fairer distribution of labour at home and improved work-life balance for both men and women. The new proposal by the UK government to introduce flexible parental leave is an example of a step in the right direction here, emulating the Nordic countries.

Given the benefits of having more women in the workplace at all levels, such as improving corporate governance and providing a wider range of perspectives on business decisions, it is in everyone’s interest to realise the full potential of the female talent pool. Female participation in the labour force can boost growth by mitigating the impact of an aging workforce, especially in high-income economies. Research suggests that raising the female participation rate to match that of men could help boost GDP in the US and Japan by 5% and 9% respectively.

The overall message is that OECD countries have on the whole made some positive gains, but must continue to build on past successes to achieve gender equality in the workplace.

For more information on the PwC Women in Work Index, please visit:

http://www.pwc.co.uk/the-economy/publications/women-in-work-index.jhtml

Yong-Jing-Teow

Yong Jing Teow is an economist in PwC's UK Economics and Policy team, with experience in macroeconomic research and analysis.

Find out more about Jing

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