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Dying from Discrimination? EU Figures on Women and Work

In 2007, Goldman Sachs issued a white paper on gender inequality and global aging.  In it, they argued that certain countries–most notably Japan and Italy–had made it so difficult for women to work as well as have children that they were digging their own graves.

Essentially, what was happening was that women were “choosing” either to have children or to work.  But not both.  The odd result for those countries was that they had low female labor force participation and low fertility rates.  Goldman Sachs was alerting readers to the fact that these countries needed to change their policies or face a declining labor force in the face of rising pension obligations.

This disparity between the labor force and the pension burden usually prompts appeals for fewer immigration restrictions.  It seems the EU might solve its aging population problem by providing better support to mothers.  Goldman Sachs emphasizes that most couples, according to extensive research, would prefer to have work for both parents.  They also argue that, again based on research, children actually benefit from day care after the first year or so. There is a question, then, not only about what’s good for the society and the children, but whether the parents are actually being offered a choice or whether they are being forced to jump one way or the other.

I was remembering all this today as I was preparing graphs and tables about gender in the European Union for a talk I am giving in the coming weeks.  I usually focus on developing nations or emerging markets when I am slogging through the gender data, so don’t normally look very closely at those nations who generally perform well in the overall measures.  I tend to expect that the Scandinavian countries are going to look really good across the board, as compared to the rest of the world, and that Europe will be less advanced, but will still be doing better than most other regions.

I was actually really surprised when I constructed this table comparing the European Union countries on dimensions that I think suggest the economic prospects for women.  I looked first at how women compare to men in labor force participation and compared that to the female-to-male ratio in tertiary education enrolment.  To me, this suggests how well a country is using its investment in the skills cultivation of its population.

Right off the bat, you can see that the EU is not paying off its investment. (You can click on these charts to make them bigger.)  In most cases, more women than men are enrolled in higher education, but fewer women are in the labor force.  (BTW, please excuse the back-and-forth between US and UK spellings:  “enroled” to “enrolled”; “programme” to “program.” I get confused after so many years here.)

Source: WEF 2011 Gender Gap Report

So, it seems that the EU countries are not generally using their talent well, at least from an employment perspective.  But then, take a look at the female employment ratios for professional and technical workers, as compared to the overall labor force participation (no numbers for Luxembourg on this).

Source: WEF 2011 Gender Gap Report

These figures suggest that, on the contrary, women are represented in at least equal numbers to men in the most highly skilled jobs.  But please notice that, in some cases, especially in eastern Europe, the women are present at twice the rate as men in the jobs that require the most education.

Well, OK.  So that comparison would suggest that women ought to be making more than men.  But no.  Here we look again at labor force participation, but this time with a comparison to wage equality for similar work.

Source: WEF 2011 Gender Gap Report

On average, in the EU, women are paid 61% (that is, for instance, 61 cents on the dollar) for the same or similar work, despite having equal or greater skill and being represented in equal or higher numbers in skilled occupations.  Now, mind you, pay discrimination on the basis of sex is illegal in the European Union. What these numbers may be telling us is that there is enough pay discrimination actually going on that it can be seen in the aggregate.  What are we doing about this?

When we then look at some measure that suggests advancement opportunities, like the representation of women in high level official and managerial jobs, we see a picture that is even more stark.  On average, women are represented in managerial jobs at less that half the rate for men, even in Europe.

Source: WEF 2011 Gender Gap Report

I am sure I don’t need to say that this lower representation translates into lower lifetime expectations for earnings.

So, do women get discouraged and just go home to have babies?  Well, not many do, it seems.  The fertility rates for these same countries show an interesting pattern.  Take a look at this.

You can see that, generally speaking, the fertility is below replacement rate here.  Where it approaches replacement rate (which is 2.0), you tend to have the higher labor participation and the higher wage equality.  So maybe Goldman Sachs is right.  And maybe there will be hell to pay somewhere down the road for these apparently discriminatory practices.

But, regardless of the fertility outcome, it is truly shocking to me to see just how long the road to equality still is in some of the most “advanced” countries in the world.


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