The gender employment gap in Europe

Published on February 28, 2021

Author

Giovanni Sgaravatti

The gender employment gap is not as hotly debated as the gender pay gap; nonetheless, it is a crucial issue for the economic recovery of the European Union (EU) and the continuation on the path of female rights embarked upon more than a century ago by the suffragettes^[1].

Paid work is possibly the primary means of emancipation and plays a crucial role in defining a person, making them free to self-determine. Performing domestic and caring tasks should be a choice free of any restrictions, be they cultural, social or economic. Furthermore, the role and importance of caring for the weakest (the youth, the elderly and the disabled) should be formally recognised by society and not just informally by families.

Limiting women’s presence in the labour market means limiting talents, skills and capabilities available to the productive part of a country. A 2017 Eurofound report estimates that the economic loss due to the gender employment gap in the EU amounts to more than €370 billion [2]. The analysis also shows that there is significant heterogeneity between different European countries: for Malta, the percentage of gross domestic product (GDP) lost each year amounts to 8.2%, for Italy to 5.7% and for Greece to 5%, while at the other end of the spectrum we find Sweden and Lithuania with losses lower than 1.5% of GDP.

Using the latest available Eurostat data (2019), thus pre-coronavirus^[2], the focus of this article is placed on the six most populous EU countries: Germany, France, Italy, Spain, Poland and Romania. The following graph highlights the problem within the EU and in these six countries. The employment rate for women is shown in green, the employment rate for men in blue. The difference in percentage points (pp) between male and female employment is shown in the dotted rectangle.

The gender employment gap is particularly evident in Poland, Romania and, above all, in Italy – where almost one in two women aged 20-64 is not employed. The gap is also clearly visible in Spain, where the differential is nearly 12 percentage points, exceeding the EU average of 11.4 pp.

The importance of policies reducing gender employment gap

Unequal gender representation in the labour market is an expression of a long-standing patriarchal legacy. To change this it is needed a cultural shift, accompanied by reforms to tackle the gender employment gap. Let us then look at some of the policies introduced by France and Germany to boost female employment.

FR – Chèque emploi service universel: a voucher system introduced in 2006 through which domestic and childcare workers can be paid. The voucher simplifies the procedure of hiring, paying and contracting these figures, combining a tax incentive (expenses are deductible) and co-financing opportunities [3]^[3].

DE – Perspektive Wiedereinstieg: A support programme for women who have been out of the labour market for more than three years for family reasons. It offers professional assistance -both online and face to face- as well as training courses and tax incentives for employers [4].

FR – Complémente de libre choix du mode de garde: a financial compensation aimed at covering part of the costs of childcare for children up to six years old [5].

DE – Elterngeld: a parenting allowance to which parents are entitled if they reduce their number of working hours to less than 30 per week during the child’s first year. The funding is equivalent to the claimant’s corresponding salary if he or she had continued to work full-time. With different methodologies, also students and unemployed people can benefit as well [6].

DE – Pflegezeitgesetz und Familienpflegezeitgesetz: A legal provision allowing employees to take unpaid leave to care for immediate family members. The leave can be short – 10 days – or long – with a reduction of working hours up to a maximum of 15 per week for up to two years [7].

FR – La Charte de la Paternité en Enterprise: a charter of intents to be signed – on a voluntary basis – by companies that want to commit to the work-life balance of their employees. The aim is to guarantee more flexibility in working hours and to create an environment with an eye on employees with children, respecting the principle of non-discrimination in the career development of those with children [8].

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I think it is important to highlight two recurrent elements in the policies listed above. The first is their flexibility: the burdens and benefits of companies and workers are modulated on a case-by-case basis and change as situations change. In fact, too rigid impositions may negatively influence employers, who may be inclined to prefer hiring a man rather than a woman. One example is the case of compulsory maternity leave: in France and Germany this is respectively 16 and 14 weeks, compared to 21 in Italy [9], [10]. The second element is that of inclusion: almost all the policies listed above are not aimed exclusively at women, but they rather try not to discriminate on the basis of gender. Returning to the example of maternity leave, a reduction in maternity leave in countries where it is very long should correspond to a lengthening of paternity leave. In this respect, Italy and Romania are adapting to the demands of the European Commission, reaching the European minimum standard of ten days of leave for neo fathers.

Finally, another important aspect of some of the policies listed above is that they lower the cost of childcare: this, in turn, reduces the incentive for the second earner (which often corresponds to the woman) to stay at home with the children not to incur the costs of kindergartens, summer camps and all childcare services. These policies also have a positive impact on the birth rate, an endemic problem in many European countries.

The level of education in the female employment rate

Education attainment is generally considered one of the strongest predictors of employability. This is confirmed in all six countries under review, for which a higher level of education corresponds to higher employment rates across the populations.

Below are the employment rates for women aged 20-34 by level of education, where Low indicates that the highest education attainment was that of compulsory education or less, Medium refers to a high-school diploma, and High to University or postgraduate education.

It is evident from the graph that a high level of education on average corresponds to a higher employment rate. This is particularly evident in Poland, where the employment rate between women with a low education level and those with a high-level changes by 60 percentage points. In Germany, on the other hand, the employment rate among those with a secondary school education (Medium) is very close to that of those with a university degree (High). This peculiarity could be attributed to the strong presence of vocational schools that prepare for the labour market already during the upper secondary education.

Promoting learning is therefore also a useful tool for closing the gender gap in the employment rate. Countries such as Romania and Italy -with a gap of more than 19 percentage points- could thus benefit from positive effects in the labour market by providing more incentives for female higher education.

It is interesting to note that, with the exception of Germany, girls tend to be more likely to complete tertiary education than boys^[4].

Gender employment gap and the role of women in the future of the EU

The relaunch of the European Union should also pass through women and a renewed recognition of their role in society. To do so would be not only fair, but also necessary. For this reason, the European institutions have decided to tie all the funds of the multiannual budget and of the Next Generation EU destined to climate change mitigation and adaptation (a slice of 30% of the total, corresponding to about €547 billion) to projects with an eye on the gender employment gap. Thus setting the direction for the future: a transition towards environmental sustainability free from gender discriminations [12].

Despite the EU’s clear stance, some expected more: Alexandra Geese, MEP for the Greens/EFA, launched a petition asking that the funds allocated to digitalisation should also focus on women and their rights in the labour market. This would bring half of the Next Generation EU package’s total expenditure to projects attentive to the gender employment gap. The proposal may seem disproportionate, but given the extent of gender inequality in the labour market perhaps it is not so disproportionate after all.

Giovanni Sgaravatti

^[1] Women’s emancipation movements and demands for the right to vote appeared all over the world in the late 1800s and early 1900s, although immediately after the French Revolution (in 1791) Olympe de Gouges wrote the Declaration of the Rights of Women and Citizens, in which she declared political and social equality between men and women. [1]

^[2] Recent studies indicate that the employment gap in some developed countries will widen after the crisis. This is because the woman is more often the partner with the lowest income, who therefore decides to give up work to look after children during school closures. Moreover, in some countries women’s employment is higher in the most affected sectors, such as retail and catering [4], [5].

^[3] A similar instrument also exists in Italy, but unfortunately it does not seem to be bearing the desired results [3b].

^[4] The phenomenon is also present in Germany in the younger population: those between 20 and 34 years of age.