Having children widens gender pay differences
Published: 6 October 2008
Despite the fact that Sweden has kept a high profile on gender equality [1] issues, gender pay inequalities are still a significant problem. Data (in Swedish) [2] from Statistics Sweden (Statistiska Centralbyrån, SCB [3]) reveal that women’s wages correspond to 84% of men’s, when including other potentially influential factors, and amount to 92% of men’s wages when factors such as different educational levels and work in different occupational categories are controlled for (see figure). These data have remained relatively constant over the last 10 years and policymakers have been debating how to reduce the gender income gap (*SE0402103F* [4]).[1] www.eurofound.europa.eu/ef/observatories/eurwork/industrial-relations-dictionary/gender-equality[2] http://www.scb.se/templates/tableOrChart____149083.asp[3] http://www.scb.se/[4] www.eurofound.europa.eu/ef/observatories/eurwork/articles/report-examines-gender-pay-gap
A new report published by the Swedish Confederation of Professional Associations concludes that women’s and men’s wages are affected differently as a consequence of starting a family. Men in a personal relationship typically have a better wage development than single men, whereas the opposite is true for women. The social partners take different views on the causes of wage inequalities and on the possible solutions.
Wage inequalities persist
Despite the fact that Sweden has kept a high profile on gender equality issues, gender pay inequalities are still a significant problem. Data (in Swedish) from Statistics Sweden (Statistiska Centralbyrån, SCB) reveal that women’s wages correspond to 84% of men’s, when including other potentially influential factors, and amount to 92% of men’s wages when factors such as different educational levels and work in different occupational categories are controlled for (see figure). These data have remained relatively constant over the last 10 years and policymakers have been debating how to reduce the gender income gap (SE0402103F).
Women’s wages as percentage of men’s wages, 1996–2006 (%)
Notes: The weighted percentages control for factors such as educational level and occupation. The unweighted data report the overall situation including other influencing factors besides gender, such as educational or occupational differences.
Source: Statistics Sweden (SCB), 2007
Women’s wages as percentage of men’s wages (%)
Effects of family formation on wages
In a recently published report (in Swedish, 98Kb PDF), the Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO) examines the link between starting a family and pay developments from a gender perspective. The investigation concludes that family formation affects wages differently, depending on gender. Men typically experience a better wage development if they enter into a relationship than if they stay single; a person in a relationship is defined as one living together with his or her partner or who is married. In contrast, single women have a significantly better wage development than women living in a relationship. This divergent trend between the sexes becomes even stronger for couples with children.
Trade union explanations and policy suggestions
The authors of the report perceive two possible explanations for the increase in pay inequality in connection with family formation. The first explanation is that it is a consequence of ‘voluntary’ decisions of women to devote more time to family responsibilities and be less active in their professional careers. This decision is often preferable from an economic point of view for a family where the man has a higher income than the woman. The second explanation for this pay inequality points to traditional expectations about gender and family, where women are expected to take a larger responsibility at home. Employers might therefore hesitate to give women in personal relationships too much responsibility.
In order to redress this situation, SACO calls for a more equal uptake of parental leave. The current distribution of such leave is, according to the confederation, a large contributor to gender differences in wage development (SE0707019I).
A spokesperson for the Swedish Confederation of Trade Unions (Landsorganisationen i Sverige, LO) Mats Larsson believes that wage inequalities are somewhat different among blue-collar and white-collar workers (SE0706019I). Among the former, the main problem is not unwarranted wage differences within different occupations, but that occupations in which traditionally more women tend to work have lower wage levels than those occupations dominated by male workers. Lower paid women choose to a higher degree than men to reduce their working hours after parental leave.
Mr Larsson also highlights the importance of a more equal distribution of parental leave. He argues that special equality funds in connection with collective bargaining could diminish wage inequalities. These funds could reserve some of the yearly wage improvements for women and thus reduce gender pay differences. This could be financed by increasing employment tax with a so-called equality fee and by additional government funding put into a common fund. The fund would be available for employers who intend to increase women’s wages and would therefore apply for an equal wage contribution.
Reactions of employers
An economist at the Confederation of Swedish Enterprise (Svenskt Näringsliv), Björn Lindgren, remarks that caution is necessary when drawing far-reaching conclusions about pay equality based on current statistics. It is difficult to make an accurate weighting of wage statistics and conclude that existing pay inequalities are the consequence of discrimination. Mr Lindgren reports that the opinion of many employers is that female employees’ personal priorities generally change after they have formed a family, and this might have an adverse effect on their wage and career development. However, it is difficult for the social partners to address pay inequalities if they are a result of personal priorities among female workers, according to Mr Lindgren.
Commentary
The SACO report is interesting since it explores the reasons for pay differences between men and women. Regardless of whether one perceives the difference in wage development after family formation as a consequence of pay discrimination, altered priorities or deliberate choices, it seems undeniable that some of the income inequalities recorded originate in connection with the family formation phase.
Furthermore, it is possible that some women choose to prioritise their family life as they perceive that their career opportunities will decline due to their longer absence from work during parental leave.
Further information
For more information on these topics at European level, see the annual report on pay developments across Europe for 2007 (TN0804019S), as well as the Eurofound reports on Parental leave in European companies and on Working time and work–life balance in European companies.
Michael Wahman and Thomas Brunk, Oxford Research
Eurofound recommends citing this publication in the following way.
Eurofound (2008), Having children widens gender pay differences, article.
