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RWI Projektberichte


Ronald Bachmann, Peggy Bechara, Merve Cim, Anica Kramer

Working Women and Labour Market Inequality

Research Project for the Wilfried Martens Centre for European Studies
Final Report – July 2018

This report provides an overview of the gender gap in labour market participation across EU countries, its determinants, as well as policies aimed at improving gender equality in the labour market. In doing so, we explore in detail four factors, i.e. education, taxes, childcare provision, and cultural and historic norms, focussing on four case study countries which represent different regions and feature diverse institutional characteristics. Against this background, the report proposes key actions that are likely to reduce the gender gap in labour market participation across the European Union. The situation with respect to the gender gap in labour market participation is as follows: •The gap is large. While men display a participation rate of 78.5% in 2016, women only reach a rate of 67.3%. •Differences between countries are large. The labour market participation rate of women ranges from around 55% to over 80% across EU countries. •Differences between socio-economic groups also play an important role. Older and less-educated women, for example, have the lowest participation rates. The household context matters, too. Looking at factors that determine the participation rate shows: •There is a positive relationship between the provision of childcare facilities (both in terms of quantity and of affordability and accessibility) and maternal labour market outcomes. •The tax system, particularly joint taxation, often constitutes a barrier for women to enter the labour market. •Educational outcomes are not a reason for a gender gap amongst younger generations. However, the school-to-work transition often leads to such a gender gap. •Cultural norms play an important role as they determine the division of work within households, with important differences between education levels. •Higher labour market participation rates of women are likely to generate financial benefits both in the short run, e.g. through increased tax revenues, and in the long run through better career prospects leading to higher wages and higher productivity of female workers. Key actions likely to improve gender equality in labour market participation are as follows: •Further expand the availability of and secure access to affordable good-quality childcare. •Provide properly designed parental-leave schemes and flexible work arrangements for both women and men. •Remove work disincentives to women engaging in the labour market without exerting undue financial pressure on parents who choose to stay at home to take care of the children. •Further foster the educational level of women in the EU, and facilitate the first labour market entry of women, e.g. through vocational training. •Promote positive perceptions of gender equality through the education system. It is argued that it will be most beneficial to implement such policies in a way that they are tailored towards the institutional and cultural settings in each country as well as to specific groups of workers. The role of the EU should be to set overall objectives and to define minimum standards.