Why is gender equality important? Why are women paid less? And what are “glass ceilings” and “glass walls”? This year, in its flagship course on Applied Economic Policy in June and July 2018, JVI organized a series of discussions on gender equality with course participants under the name of “Gender Awareness Club”. The initiative was welcomed by many course participants who joined the discussions of the following important questions.
Why is gender equality important? Gender equality is not only a fundamentally important purpose in itself, it can also shape the success of an economy or a society. In recent decades, there has been tremendous progress in achieving gender equality across the globe. Since the 1980s, millions of women have joined the labor force, and they are quickly catching up with men in educational achievement across all regions and all levels of education. Over the past decade, gender gaps in educational attainment in the OECD have even reversed. But numerous gaps have yet to be bridged.
Women make up 50 percent of the world’s population but only 40 percent of its formal labor force. Giving equal opportunities to women, employing more women, and empowering women are all ways to enhance the whole world’s talent pool and release each country’s full economic potential and competitiveness. The IMF estimates that due to economic gender gaps like low female labor force participation and lack of women in senior positions, the losses in income per capita may be as high as 30 percent in the MENA region, almost 20 percent in South Asia, and 10 to 11 percent in Europe and Central Asia.
Why are women paid less? According to the OECD, the median monthly gender pay gap in OECD countries was about 14 percent for full-time employees; in EU countries, according to Eurostat, the difference in gross hourly earnings for women and men varied from 5 percent in Romania to more than 25 percent in Estonia. Part of the difference can be explained by lower labor force participation among women, who are more likely to take part-time jobs and to interrupt their careers for childbearing. However, that does not mean that women work less than men: much of their work is unpaid. According to UN Women, women perform at least two-and-half times more unpaid household and care work than men in both developed and developing countries.
Another explanation for gender pay gaps is that few women are in managerial and senior positions. There is also sectoral segregation—for example, lower female representation in STEM fields: science, technology, engineering, and mathematics.
However, even if one controls for working hours, type of job, and industry, part of the pay gap still cannot be explained (see, for example, OECD and Eurostat). Even in Norway, a country where female labor force participation is among the highest in the world and which is perceived to have high gender equality, the IMF estimates that wage gaps are higher for highly educated women and in managerial and professional occupations.
What is the M-shaped pattern of female employment? Women tend to drop out of the labor force in the prime of their working lives when they get married and have children. In Japan, for example, if you plot women’s employment rates by age, you will see an M-shaped line, with a drop in labor force participation for women in their late twenties and thirties. Very often, when women return to work after bearing and raising their children, they come back as non-regular, part-time, employees. This is, however, not true for all countries. As the IMF discusses, the Nordic countries show a smooth inverted U-shaped pattern in women’s labor force participation over their life cycles. Why is it different in different countries?
What are the “sticky floors”? “Sticky floors” prevent people from getting ahead and moving up the social and economic ladder. For example, the two main predictors of having poor health, as an OECD study suggests, are having parents with either poor health or little or no wealth. The situation is similar for education, occupation, and amount of lifetime earnings. Some suggest that women also face a “sticky floors” phenomenon, especially those who have less access to education when young and so later are stuck in low-wage jobs with few if any opportunities for career progression.
What are a “leaky pipeline,” a “glass ceiling,” and “glass walls”? At entry into work, men and women are about equally represented. However, with every rung up the career progression ladder, there are fewer and fewer women in managerial and senior positions (see, for example a study by McKinsey&Company). There thus seems to be a “leaky pipeline” for women moving from entry to senior levels in business, science, academia, or politics. For example, only one third of managers in OECD countries are women. They are also less likely to become CEOs, be directors of private companies, or hold public leadership positions (see, for example, OECD 2017). According to Catalyst, as of October 2018, there were only 24 women CEOs in S&P500 companies—in other words, slightly less than five percent get past the “glass ceiling.”
Even though there are now more women in managerial positions, often with support from formal gender policies, many women are tracked by “glass walls” into specific types of managerial jobs, for instance, in human resources, administration, public relations, and communications. According to the International Labor Organization, there also seems to be a tendency for women at ministerial level to be allocated portfolios with lower political priority.
In science, women are underrepresented among researchers in areas like computer science and math, engineering, and physical sciences, and according to The Economist they are even less represented among professors in academia. As the article suggests, this can partly be explained by the fact that when those professors were undergraduates the gender gap was even worse, but it also reflects the challenges that women face in building careers in all areas, including taking up a large share of child care and housework.
What is a gender “ambition gap”? Some share an opinion that women are less ambitious than men. However, a recent survey of 200,000 employees conducted by consultancy BCG found that women are just as ambitious as men, and their ambitions do not vary with family status. When companies create a positive culture and attitude to gender diversity, both men and women are eager to advance.
What is an unconscious gender bias? We all have unconscious biases—unintentional and automatic mental associations—based on gender, appearance, nationality, wealth, and many other things. An unconscious gender bias can quickly assign gender stereotypes to an individual. Among examples of gender bias at work, identified by an ILO study, are definitions of leadership that have a masculine bias and assignments to projects based on stereotypes rather than a person’s expertise.
It is very difficult to assess unconscious gender bias, but some researchers have used perception surveys and experiments. Yale University researchers performed a famous experiment in which professors, both men and women, were asked to evaluate applications for a laboratory manager position to which male and female names had been randomly assigned. Participants rated male applicants as significantly more competent and hirable than the (identical) female applicants. (To test whether you have an unconscious gender bias, try it here!)
How long will it take to close gender gaps around the world? According to the World Economic Forum’s Global Gender Gap Report for 2017, at the current rate of progress, the gender gap can be closed in 61 years in Western Europe, 62 in South Asia, 79 in Latin America and the Caribbean, 102 in Sub-Saharan Africa, 128 in Eastern Europe and Central Asia, 157 in the Middle East and North Africa, 161 in East Asia and the Pacific, and, perhaps most interesting, 168 in North America.
What can organizations and governments do to promote gender awareness and gender equality? Policies can have a significant impact in helping to narrow or close gender gaps, and they can also shape expectations about the roles of men and women in society. Providing affordable and good-quality child care facilities promotes female labor force participation, improves women’s social inclusion, and may even increase fertility if having a child is seen as having become less costly in terms of income and career opportunities. The WEF shows that fertility rates are higher in advanced countries where female labor force participation is higher. More and more countries offer paid parental leave for both parents. Such policies can help avoid discrimination by employers in decisions about whom to hire and promote.
What can I do to promote gender equality? If you are interested in the topic, feel free to share with us (mailing to email@example.com) your opinion about this article and the issue of gender equality and gender gaps in your country.
Asel Isakova, Economist, JVI