Gender inequality: Breaking the “grass” ceiling in emerging economies
Alastair Wood and Paolo Falco, OECD Directorate for Employment, Labour and Social Affairs
The Euro 2016 football tournament is over. Well done to everyone involved and especially to the champions Portugal. Now we can take a breather and look forward to the women’s tournament next year. Football is known for bringing people together all over the world, but although women’s football is garnering more media attention, and participation levels are rising, it is also an area where gender gaps in participation and pay are still very large: In 2012 for example, the famous Brazilian footballer, Neymar da Silva Santos Júnior had his monthly salary increased to around 1.5 million Reals at his then club Santos, a sum that would have covered the cost of the whole women’s team for an entire year. And ask Steph Houghton, the top female English player, what she thinks about earning almost 10 times less a year (£35,000) than what the top male earner, Wayne Rooney, takes home in a week (around £300,000).
Beyond the spendthrift and extravagant world of men’s football, gender inequality is also a sad reality for too many workers in the everyday labour market. Recent OECD data shows the average gender pay gap is currently around 16% in OECD countries, but the problem is not just confined to advanced economies. Looking at 16 emerging economies that cover over half the world’s population, our latest OECD Employment Outlook shows that the average gender pay gap rises to 19%. In other words, for every dollar a man makes, a woman in emerging economies only makes about 80 cents. Of course, one reason is that in the emerging world women are even more under-represented in better-paid jobs – men are more likely to be employed in the goods-producing sector and construction, while women are considerably more likely to be employed in the (less well-paid) social and personal service sector. Women are also considerably less likely than men to be in top executive positions.
But that’s not the entire story. Even when they do succeed in securing similar jobs with the same level of education, women are still paid significantly less than men. Another finding in our study indicates that often the majority of working women in emerging economies are self-employed, but they own smaller and less profitable businesses than men. This is the result of inequalities in access to credit and of gender gaps in financial literacy and business-related knowledge.
Perhaps unsurprisingly, the share of young people not in employment, education or training (NEET) is higher among women than men, partly reflecting motherhood at a young age in some emerging economies, and culturally-induced behaviour in general. This is also the case for the OECD as a whole, but the gender difference in this share is far more pronounced in emerging economies (17.9 percentage points, almost four times larger than the OECD average of 4.7 percentage points). Reducing gender gaps in labour market outcomes (participation, earnings, NEET rate, etc.) have rightly been the focus of global efforts in the last few years. G20 commitments such as reducing the gap in labour force participation rates between men and women by 25% by the year 2025 will hopefully bring millions more women into the labour market, and there are similar efforts to increase participation of women in STEM-related jobs (science, technology, engineering and mathematics) that aim to give us generations of well-paid female engineers, mathematicians and scientists.
Indeed, there are already signs of progress, but change is slow and uneven. In Chile and Costa Rica for example, the gender participation gap has narrowed by over 20 percentage points since the mid-1990s, while the largest gaps persist in both Egypt and India, where labour participation rates are over 50 percentage points higher for men compared to women. And if you are a girl and you want to become a top manager, then you may want to move to Latin America: in Chile, Colombia, Brazil, Mexico, and Costa Rica, women account for a higher share of top management and executive positions than the OECD average of 32%. Investment in education and increased efforts to encourage women to undertake careers in STEM fields may be partly responsible for this advancement.
Another piece of good news is that gender gaps in educational attainment have also been shrinking in recent decades: enrolment rates in primary and secondary education are today almost identical for boys and girls, and in many countries women are now attending tertiary education more frequently than men. Unfortunately this is not true for all socio-economic groups as girls from poorer families are still much less likely to be enrolled in school at all levels of education.
So what can we do to reduce gender gaps further? Are we condemned to passively accept that the (r)evolution towards global gender equality will be a slow-moving progression as the decades pass us by, especially in emerging countries? Definitely not. Our study helps policy makers identify actions that can have the biggest impact in helping to close the gender gap. Here are a few examples.
- Tell your girls they can be rocket scientists: Removing gender bias at a young age and encouraging more women to take up STEM-related jobs would help to end stereotypes about appropriate areas of work for boys and girls, and inspire women to enter into better paid jobs.
- Give mums a real choice to go back to work: Subsidising childcare and creating real incentives for fathers to take parental leave are two important measures of the available options to support mothers’ careers.
- Ensure women have an equal chance to access credit and be fairly treated at work: Gender discrimination by credit providers and by businesses when hiring and paying their staff, and specifically against pregnant women, should be addressed in formal legislation. Inheritance laws that favour men should be changed and governments should specifically target women when enhancing financial education.
Reverting to football, it is interesting to note that all four countries that reached the semi-finals in the last women’s European football tournament had smaller gender pay gaps than the OECD average, and 3 out of 4 had better-than-average female rates of participation in the labour market. Football is hardly representative of the real world, but the gender gap, just like football, is a truly global phenomenon and has been engrained in societies throughout the world. As emerging economies develop economically, let’s try to help them also develop effective policies for “locking in” more gender equality in their society. Beyond the moral and social imperative, it will help them emerge economically stronger – women are the biggest untapped potential for economic growth. Closing gender gaps would therefore help both emerging and developed economies score a goal for economic growth while also promoting more inclusive societies.