Equality 3 min Published: 2024-03-07

The underlying causes behind the Gender Pay Gap

The gender pay gap represents a significant issue within the European Union, with women earning on average 12.7% less per hour than men. This enduring disparity not only highlights the challenges in achieving gender equality in the workplace but also underscores the need for a multifaceted approach to address the underlying causes.

The Essence of the Gender Pay Gap

At its core, the gender pay gap is the difference in average gross hourly earnings between women and men. This calculation includes salaries before taxes and social security contributions and focuses on companies with 10 or more employees. Despite efforts to close this gap, it remains a persistent issue across the EU, with the gap varying significantly from one country to another.

The Complex Causes Behind the Pay Gap

Several structural factors contribute to the gender pay gap, including but not limited to:

1. Part-Time Work and Unpaid Responsibilities: Women disproportionately undertake unpaid work, such as childcare and housework, limiting their capacity for paid employment.
Nearly 28% of women are employed in part-time roles, in contrast to a mere 8% of men engaging in part-time employment. Taking into account both unpaid and paid labor, women work more hours per week than men.

2. Career Interruptions: Family responsibilities and childcare often lead to career breaks for women, influencing their career choices and progression. In 2018, about one-third of working women in the EU took a break from their jobs to care for children, whereas only 1.3% of working men did the same.

3. Sectoral Segregation: Women are overrepresented in lower-paying sectors like care, health, and education, contributing to the overall wage disparity. This fact accounts for about 24% of the total gender pay gap.

4. Underrepresentation in Leadership: Despite making up nearly half of the workforce, women hold significantly fewer executive positions: In 2020, they constituted approximately one-third (34%) of managerial positions within the EU. Women are also paid less than their male counterparts in similar roles, their hourly earnings being 23% lower.

These factors, combined with the fact that women are more likely to be unemployed and perform more unpaid work, exacerbate the financial inequalities between genders, contributing to a significant overall earnings gap.

The Impact of Closing the Gender Pay Gap

Addressing the gender pay gap is not only a matter of fairness and equality but also has substantial economic and social benefits. Reducing the gap can enhance gender equality, decrease poverty among women, and stimulate economic growth. It has been estimated that reducing the gap by one percentage point could boost the GDP by 0.1%.

Legislative Efforts to Combat the Pay Gap

Recent legislative efforts within the EU aim to enhance pay transparency and equality. Companies are now required to disclose salary information to facilitate comparisons and address disparities. New rules mandate that employers with a gender pay gap of at least 5% conduct thorough pay assessments in cooperation with workers’ representatives. Furthermore, the introduction of penalties for non-compliance and the promotion of gender-neutral job advertisements represent significant steps towards closing the gender pay gap.

Towards a More Equitable Future

The commitment of the European Parliament to reduce the gender pay gap through binding pay-transparency measures and actions to promote women in leadership positions underscores the EU’s dedication to gender equality. As these initiatives unfold, the hope is that they will pave the way for a more equitable and inclusive workforce, benefiting not only women but society as a whole. In conclusion, the gender pay gap in the EU is a complex issue rooted in structural inequalities and societal norms. Addressing it requires concerted efforts across various fronts, from enhancing pay transparency and equality within workplaces to challenging the traditional roles and responsibilities assigned to women. As the EU continues to implement measures aimed at reducing the gap, the ultimate goal remains clear: to achieve a fair and equitable society where everyone, regardless of gender, has equal opportunities to thrive.



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