Facts about Economic Gender Inequality

Economic Gender Inequality

Gender is a central concept in modern societies. The promotion of gender equality and women’s empowerment is key for policymakers, it is receiving a growing attention in business agendas. However, gender gaps are still a wide phenomenon. While gender gaps in education and health have been decreasing remarkably over time and their differences across countries have been narrowing, gender gaps in the labor market and in politics are more persistent and still vary largely across countries. Understanding the determinants of gender gaps is essential for any country who wants to put forward effective ways to realize equality between men and women and promote a balanced pattern of economic growth. However, there is no unique determinant of gender gaps, and ‘gender gap’ itself is a multidimensional, complex indicator. Thus, identifying the determinants of gender gaps is a challenging, though fundamental task.

The following list of facts about economic gender inequality may represent a useful guide to identify the determinants of gender gaps:

Gender gaps have historical roots. 

These roots can be traced back to the organization of the family and to the traditional agricultural practices in the pre-industrial period, which influenced the gender division of labor, the role of women and the evolution and persistence of gender norms.

Culture matters in determining gender gaps. 

Gender stereotypes are well-established, both among men and among women. They influence the extent to which men and women share the same responsibilities, in particular in domestic work and childcare and they contribute to explaining gender gaps in the labor market.

Men and women have different attitudes and behaviors.

On average women are significantly less likely than men to make risky choices and to engage competition. These differences can contribute to explaining gender pay gaps, glass ceilings, and the lower presence of women in high-paying jobs, or in highly competitive environments.

Maternity does not explain it all. There is no trade-off between fertility and female employment.

Maternity is a penalty in the labor market. However, there is no trade-off between fertility and female employment; countries where women work more also have higher fertility rates. Thus, low female employment is not necessarily due to maternity decisions.

Education is the first engine of gender equality.

Women and men are currently equally educated, and women often surpass male educational attainments in developed countries. However, differences across fields of study, with a limited share of women in STEM disciplines, remain and may explain part of the still-existing gender gaps in access to the labor market and careers.

Gender gaps in employment and the glass ceiling are different phenomena, although they often go hand-in-hand. 

Even in countries where the problem of access to the labor market for women has been substantially solved, women still encounter obstacles in careers and in reaching top positions (i.e. the glass ceiling).

Labor demand is as important as individuals’ choices. 

Firms’ decisions, employers’ attitudes and beliefs, i.e. labor demand, are as important as individuals’ incentives and choices to determine the gender composition of the workforce, female careers and the overall outcomes of gender gaps. The selection process itself is typically not gender-neutral.

Institutions play a crucial role in supporting female employment.

Family policies, parental leave, and formal child care provisions may help in supporting female labor supply.

Institutions play a crucial role in determining the glass ceiling. 

How to promote female leadership and the presence of women in top positions is a highly debated issue, which countries are addressing through a variety of policies, from the introduction of gender quotas to voluntary regimes. Gender quotas have recently attracted wide attention; they have been proved to be effective not only in increasing the number of women in top positions but also in inducing a better selection process and a beneficial renovation of the ruling class.

Women’s empowerment and economic development are interrelated. 

On one side, economic development improves women’s conditions and reduces inequality between men and women, on the other side, the involvement of women in the economy is a key engine for growth.

These facts suggest that the determinants of gender gaps range from culture and history to attitudes and behavior, educational choices, family choices including maternity, firms’ behaviors, policy interventions, and economic development. These determinants are also strictly interrelated. Understanding these facts could be a useful guideline in helping to determine future policy on economic gender inequality. 

Credit: By Paola Profeta Paola Profeta is Associate Professor in Public Economics at Università Bocconi, Milano. She is a co-editor of The Determinants of Gender Gaps.

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