The gender gap at work is closing – but slowly

7 March 2024

By Clémence Berson, Vasco Botelho, Luis Guirola Abenza, Laura Hospido, Friderike Kuik, Christiane Nickel and Manuel Rojo Lopez

The gender gap at work is closing – but slowly. Women are paid less for their work than men are.^[1] Inequality on the labour market keeps us from making the best use of all talent, leads to inefficiency and misallocation of workers. However, the gender gap is shrinking, albeit at a decreasing speed. We show the differences between women and men on the labour markets in hours worked, part-time positions, wages and total earnings for all euro area countries.^[2] Our interactive graphs let you compare the developments in gender inequality among countries and over time.

Gender gaps in the euro area labour market

Based on an analysis using household-level data from the EU Survey on Income and Living Conditions (EU-SILC) we find that the gender gap in total earnings has improved significantly. In 2005 it stood at 50%, meaning that the average man took home double the yearly pay of the average woman (aged 15 to 64). By 2023 this had fallen to 35% (Chart 1).^[3] While this change is significant, the gap in the euro area remains quite large. In addition, the speed at which it is narrowing is slower than two decades ago.

Three main elements of the gender wage gap

A major factor behind the gender gap is the different labour participation rates of men and women. In 1992 the employment rate of women (44.8%) was 27.8 percentage points lower than that of men (72.7%) across today’s euro area countries (Chart 2).^[4] This was because women often struggled to find stable jobs and – to a greater extent than men – took care of their households. Since then female employment has increased gradually, reducing the gap to 9.0 percentage points by 2023. The red bar in Chart 1 shows how the shrinking employment gap – from 17.3 in 2005 to 10.5 percentage points in 2023 – contributed to a similar decrease in the gender earnings gap.

A second factor is the different patterns for part-time work. Women remain significantly more likely to work part-time than men. While in the 1990s the rate of women in part-time contracts was 21.5 percentage points higher than that for men, by the mid-2000s this figure had grown to 26.9 percentage points before shrinking slightly to 24 percentage points by 2024 (Chart 3). This discrepancy contributes to the gender gap in total earnings because it affects the hours usually worked by men and women. It accounted for 14.1 percentage points of the earnings gap in 2005, falling to 10.7 percentage points by 2024. This decrease could be associated with an increase in the average hours worked by women in part-time employment, mitigating the effects from a large gap in part-time employment. In other words, women work part-time more often, but female part-timers have increased their hours over time.

A third factor is the hourly pay gap. This figure measures how much more the average man earns per hour than the average woman. In 2023 it stood at 13.4%, down from 17.8% in 2005, with an average annual decrease of only 0.2 percentage points.

What is behind this sluggish change? While education might appear to be a likely factor, women now in fact have a slightly higher average level of education than men, meaning that the cause must lie elsewhere. One explanation is the existence of clusters. Some occupations are more male-orientated, like firefighting or engineering, while others are more female-orientated, like nursing or teaching. And some of the male-orientated jobs simply pay better. Other explanations relate to norms and beliefs about gender roles, men and women’s different preferences, or women’s more limited possibilities to change jobs due to external constraints.^[5] And of course there is also the possibility of simple discrimination. Because even when we control for additional factors such as average years of employment or maternity leave periods, there is still an unexplained wage gap. In Germany, for example, this unexplained gap stood at 6% in 2024. This is the average difference in pay between female employees and male employees with comparable job qualifications and career paths.

Regional patterns: gender gaps in different countries

While we find that the gender gap is narrowing across the euro area, there are significant regional differences. These depend on labour market features, national policies and culture, as shown in interactive Charts 2 and 3.^[6] In northern countries, especially Finland for example, the gender pay gap is quite small. Use the “select” option in the toolbar to explore the situation in other countries. The gap in working time, however, is still significant. In Eastern Europe, for example the Baltic countries, you will find a more equal working environment in terms of both employment rates and hours worked. This has been attributed to the legacy of socialism,^[7] which promoted women’s economic inclusion. In Western Europe men’s and women’s employment rates have converged, with many women entering the workforce, often in part-time jobs, and in particular in Austria, Germany and the Netherlands. Meanwhile in Southern Europe the gender gap in employment has also narrowed significantly, driven by a higher share of women being in full-time rather than part-time employment. Portugal, which has historically had small gender gaps in employment, is a particular success case in this region.

If governments aim to close the gender gap in labour markets, public policies should be targeted towards barriers faced by girls and women, for example with paid parental leave policies and investments into the childcare system. Academic studies have highlighted the importance of childcare, especially during the first few years, on women’s labour market participation.^[8] Increasing the time fathers can spend with their young children would also help reduce the “child penalty” women face in the labour market and their unequal burden at home.

Closing the gap

But these public policies cannot fully tackle every cause of gender gaps in the workplace, which are usually linked to discrimination and unconscious bias against women. Steering young women and girls towards more scientific careers, for example, could help to reduce existing gender gaps by opening up alternatives that women traditionally do not consider. Institutional initiatives such as mentorship programs, networking opportunities, and training and development programs can also help to empower women and provide them with the tools they need to succeed. By addressing the barriers to women's participation and promoting gender equality, we can create a more inclusive and diverse workforce that benefits everyone. However, closing the gap is not solely an issue for women. New fathers should also have the opportunity to take care of their newborns, possibly via more generous paternity leave policies, and access to childcare should be improved. All these actions taken together would help addressing what the Nobel Prize laureate Claudia Goldin referred to as the “last chapter” in achieving gender equality.

The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.

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