Gender Equality Index 2020: Digitalisation and the future of work
Ending gender inequalities in earnings and pensions – the EU is decades away without targeted action
Despite positive changes in women’s employment rates and educational attainment, gender inequalities persist in pay, monthly earnings and income. The EU focuses primarily on the gender pay gap, standing at 16 %, and the gender pension gap, reaching 37 %, both to the disadvantage of women. These measures may underestimate the full extent of gender inequality in the labour market. For example, the gender pay gap does not take into account the number of hours worked or the shares of women and men in formal employment.
The domain of money looks at gender difference in mean monthly earnings, which considers the wider context of women’s and men’s employment opportunities. In addition to income from pensions, it looks at investments and other benefits. Since 2010, the gender gap in earnings has increased in 17 Member States, while the gender gap in income has gone up in 19 countries, leading to an overall increase in gender inequality in earnings and income in the EU.
Between 2010 and 2018, the gender gap in monthly earnings increased most in Italy, Poland and Latvia. The biggest progress on closing the gender gap was observed in Cyprus, the United Kingdom and Greece. In addition to gender inequalities in earnings, fewer women than men in the EU receive any type of main salary supplementary earnings (e.g. performance bonuses).
In its 2019 research on gender segregation in education and the labour market, EIGE noted that, across remuneration sources, the gender gap is greatest in bonuses. Women are less likely to work in companies that offer higher premiums to their employees and they receive lower premiums than men working in the same companies (EIGE, 2019c).
Between 2010 and 2018, the gender gap in total disposable income (including income from pensions, investments and other benefits) increased most in Lithuania, Latvia and Denmark. A comparison with the 2017 data shows that gender inequality in income is on the rise in Denmark and Latvia. Czechia, Latvia, Lithuania and Romania show no progress, as the gender gap in income has grown steadily since 2010. France, Cyprus and Luxembourg show most progress on closing gender income gaps.
Gender inequalities in earnings and income grow substantially with age, level of education and increasing family demands. Women over 50 are the most disadvantaged compared with men. In addition, women with the highest levels of qualifications are the most underpaid compared with men with higher education, showing accumulating disadvantages for women as their careers progress. In terms of the different stages of life, gender inequalities in earnings and income peak for women living in couples with children and for lone mothers.
While EIGE’s research on the gender pay gap shows considerable variation across different jobs, women earn less than men in all sectors (EIGE, 2019c). The gender pay gaps are largest in financial and insurance activities (35 %) and manufacturing (31 %), which particularly underpay older women. The gender pay gap is also substantial among health professionals (33 %), showing a dearth of women in high-level posts and a culture of underpayment in jobs dominated by women.
The first results of a Eurofound survey on living, working and COVID-19 show widespread economic insecurity among respondents, with around 4 in 10 saying their financial situation is now worse than before the pandemic.
On households’ total monthly income, slightly more women than men (11 % and 9 %, respectively) indicated that their households would face difficulty or great difficulty in making ends meet. Nearly every third woman (31 %) and every fourth man (23 %) had no savings with which to maintain their pre-crisis standard of living.
Recent literature (Alon et al., 2020; EIGE, 2019c) has documented that gender inequalities in earnings and income are closely related to (expected and actual) care duties for children, which fall disproportionately on women, without appropriate income replacement.
The COVID-19-linked shift of care duties back into private households will have more severe negative effects on women’s income, as they take on this duty at the cost of their labour market participation, thus losing current and future income.