Christina @

Gender equality has come a long way but pay gaps and barriers to women’s labor force participation and business leadership are sustained in many countries, despite women obtaining a larger number of higher-education degrees than men in developed nations. Fuller participation and representation of women in the workforce have tangible benefits for societal resilience. This makes addressing the gender gap a key element in policymaking.

Can you describe the current gender gap in employment and leadership?

Paola Profeta (PP): There are many differences between countries, but it’s still an issue everywhere. The average female employment participation in Europe is around 62.8%. The pay gap is around 14%. Then there is the glass ceiling to women in leadership positions. That’s below 10% in some places. This is at odds with the level of women’s education.

Anne Boring (AB): In developing countries, women are getting less education than men, whereas in developed economies, women have been overtaking men in education status for the past few decades, and it was expected this would close the gaps. That didn’t really happen. In France, the wage gap has been stuck at around 16% for the past 15 years.

Why does the gap persist?

AB: There are several reasons. Although women study longer and earn more degrees, they tend to earn degrees in fields that lead to lower-paying jobs. More broadly on the labor market, women sort into firms, occupations, and industries that pay less. The so-called “child penalty” is also a very important factor.

PP: Motherhood is a time of penalty for women’s resilience in the labor market, a big drop in earnings and prospects. We really have to address this at the firm and government levels.

AB: High-paying professions demand time, and women suffer from having to reduce their hours when they have children. And the need for childcare affects job choice, as wages are traded for flexibility. We have not reached gender equality on sharing childcare.

So, better measures for sharing childcare would help?

PP: Paternity leave is important in order to entrench that children are a dual responsibility. Symmetry at the family level to nurture symmetry at the firm and society levels. But childcare policies are scarce in many countries.

AB: Better access to childcare doesn’t only mean that women can work more. There are societal benefits to better access to childcare, as men and women come to believe in gender-equal norms. That’s good for children as well.

That brings us to resilience. What are the societal resilience benefits of addressing the gap?

PP: There are so many measurable benefits. Female participation is positively related to economic growth. As we said, women surpass men in higher education, so why waste talent and competence? It benefits fertility because two incomes encourage more children, which ties in with pensions, counterbalancing the effects of us all living longer.

There are clear benefits to leadership. A larger pool raises the quality of candidates, and more women in leadership encourage other women and implementation of family-friendly policies. It’s a virtuous circle.

AB: Economic power for women helps at the household level too. Research has shown it reduces domestic violence. The more women in leadership, the more stereotypes are reduced. And diversity in leadership teams tends to increase creativity within firms.

Building Societal Resilience

This article is part of an AXA Research Fund publication

Read the publication

Women are more educated than men, but is it a case of what they are learning? You’ve both written about the importance of more women learning STEM [science, technology, engineering, mathematics] disciplines.

PP: Women’s segregation into humanities, less rewarding on the labor market than STEM disciplines, is worrying for future gender gaps. We need to ask why women are so poorly represented, if they are discouraged away at a younger age. It’s a cultural problem.

AB: Lack of STEM degrees means that women’s entry points to the labor market are not as good, and the high-career trajectory is harder. If we manage to close that gap to start out with, that would make a huge difference later. There is not necessarily a lot of gender discrimination, at least not in western and northern European countries, but small differences grow and grow. At maternity, they explode.

PP: Context matters. For STEM disciplines, testing can be competitive and stressful, and we know this penalizes girls. In a more “normal” environment, they perform as well as boys. We need to build a more inclusive culture here.

Let’s look at policy tools. How about quotasfor women in leadership, for example?

AB: Quotas definitely work in bringing more women to leadership positions. When France and Norway introduced quotas on boards, firms were able to adapt very quickly. Some large firms are pushing for more equality as they see benefits to having more diversity in leadership positions.

But quotas generally only work if there are strong incentives to implement them. There needs to be a cost to firms if they don’t generate more gender equality. Or no cost if they do. For instance, extending paternity leave. That could incentivize firms to hire more women because there will be a cost to replace men going on leave too, levelling the field.

PP: Quotas are controversial. But sometimes they are the only way. In Italy, my country, there is a compulsory quota for boards of listed companies. And the qualification level increased, because men faced competition from women who previously wouldn’t have been considered.

What other policy tools could be useful?

PP: Transparency in the collection of data and information about gender pay gaps. In Europe, there is discussion about making it obligatory for firms to report pay data. Making firms responsible and taking action to recognize issues and improve things.

AB: Where pay transparency has happened, the public sector in Canada for instance, it has helped to reduce the gap. There’s a stereotype that women are not supposed to ask for more money. So, if you increase information about wages, this really helps women.

How about recognizing the unpaid labour that is typically mostly done by women?

PP: The problem I have with this is that it risks backfiring on female participation, causing women to work less than they already do. If women don’t work, the problems remain. Much better would be to have policies that rebalance things. Better childcare, for example. Not reduce the incentives for women to work in the first place.

What has the pandemic meant for female employment status, and how does this compare to the 2008 financial crisis aftermath? Then was called the “hecesssion” because it hit the male-dominated financial sector, whereas 2020 marked the “shecession”, since service industries disproportionately employ women.

PP: 2020 was indeed a “shecession”, but since then, thanks to government support and the like, the level of female employment is not that different than before the pandemic. But there is another effect. The increase in family responsibilities through school closures and lockdowns impacted women more. The stereotypes around traditional gender divisions held true, even with more remote working for everyone. Men may have done more, but women did much more. The gap, if anything, increased.

Having said that, if remote working is maintained as the new way of working, that will be good for women and everyone. I think it will be difficult to go back to the old ways.

AB: After 2008, this narrative emerged that if Lehman Brothers had been Lehman Sisters, there wouldn’t have been such a crisis. There was quite a push for policies to actually close the gap, larger firms especially embraced the business case for gender equality in leadership positions. And in the past 10 years, this push has really accelerated.

Covid-19 did see a “shecession” at first, but now women’s employment has gone back up. But there are longer-term consequences that could impact women more than men. It’s early days, but there are signs that women are going to be working from home more, be less present in the office, and this may lead to a setback in career advancement.

More widely, we are still seeing a lot of sector gender segregation, female-dominated sectors and male-dominated sectors. That is what really created the difference between 2008 and 2020. There’s a lot still to do there, a need for public policies to improve diversity and reduce this segregation. It’s an obvious issue.

So, for more progress, what is needed next?

AB: What is missing in firms is solid research on effective strategies to close the gaps. There are inequalities within firms and across firms. There's a big role in public policies and a lot of political interest to increase gender equality. I think the trend is going in the right direction. But it's not a clear road.

PP: It’s about changing culture. If there is a mindset not open to women's empowerment or women's participation in the labor force, then even the best policies can fail.

November 2022

Learn more about the research project of Anne Boring and Paola Profeta