3 Mar 2014 09:09am

Gender inequality holds back economic growth

The recession has taken its toll on gender inequality in the workplace, two new studies published today have suggested

The Women in Work Index from PwC show that the southern European countries that were badly hit through the economic downturn saw their gender wage gap widen. Portugal, Spain and Greece were rated 14th, 23th and 26th based on the study’s rankings and scores across the 27 OECD countries.

The UK fell to 18th position in the analysis, which uses five key indicators of female economic empowerment: the equality of earnings with men; the proportion of women in work, both in absolute terms and relative to men; the female unemployment rate; and the proportion of women in full-time employment.

Across the OECD the average gender wage gap was 16%, a gap which has been gradually narrowing from 26% in 2000. The UK’s wage gap is above average, at 18%. Ireland has seen the most dramatic improvement on this front, with only a 4% wage gap.

The Nordic countries have scored consistently highly in the index, with Norway, Denmark and Sweden holding the top three places, and having done so since the index began in 2000.

PwC said that the UK performs above the OECD average on female participation in the labour force, and on female unemployment levels, but is ranked 25th out of the 27 over the low proportion of women in full-time employment.

Gaenor Bagley, head of people and executive board member at PwC, said, “The low level of females in full-time employment is holding back both the UK’s economic recovery and women’s career progression. Despite the perception that flexible working helps women, our Index and wider research suggests that it could instead be holding them back in many cases. The reality on the ground is that people who work flexibly feel they have to work harder for promotion, are resented by their peers and don’t progress as quickly. The decision to go part-time is often made for short-term reasons, but unfortunately for women it often seems to have a wider, long-term negative impact.

"Despite policy moving in the right direction, the UK’s cultural perception of gender equality needs to catch up. Some of the reasons the Nordic countries top the Index is down to the recognition that all individuals should be able to balance their career and family life, and to support themselves. For example, childcare and household tasks are shared between parents, which has enabled a more equitable distribution of labour at home and improved work-life balance for both men and women.”

A separate study published today by non-profit organisation Catalyst found that although 24% of senior management roles globally are filled by women, the G7 group of nations, which includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, reached only 21%.

The study of 143 countries highlighted huge discrepencies globally for women in the workplace. In 127 of the surveyed economies, it is legal for a potential employer to ask about children and family status during a job interview, and in 15 of the economies, a husband can prevent his wife from accepting a job.

The study concludes that increasing the levels of female employment could help raise GDP by 5% in the United States; 9% in Brazil; 9% in Japan; 11% in Italy; 12% in the United Arab Emirates, and 27% in India.

The two pieces of research have been published ahead of International Women's Day, which falls on March 8.

Helen Roxburgh


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