An overview of Gender gaps in labor market

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An overview of Gender gaps in labor market

Gender gaps in labor market

International Labour day (also called International Workers’ day or May Day) was celebrated on the first of May worldwide. Considered as one of the biggest celebrations of the year, the day is celebrated to mark the Haymarket affair that occurred in Chicago in 1886 on the first of May, where the strike for 8-hours work per day was started. This year, the May Day was celebrated with the theme “Sustainable Pension for all: Role of Social Partners.”

Analyzing the labor market through the gender lens, there has been observed decreasing gender gaps over the years. In comparison to the last decade, women’s participation is increased to 48.5% in 2018, which is 26.5% less than that of men, narrowing the gender gap by 2% from 1990. The case is different in the case of developed countries. As the rate of women’s participation is increasing in developed countries, the gender gap has come to 15.6% as of 2018, the lowest recorded since 1990. Conversely, the gender gap is just double i.e. 30.5% among emerging or developing countries which has decreased just by 0.02% from the last decade. However, the data should be analyzed country by county. Because, as per ILO’s study, it is observed that countries such as Syria or Algeria, the relationship between women to men labor participation is below 25%. In contrast, country’s like Laos, Mozambique, Rwanda, Malawi and Togo has the relationship close or even slightly above 100% (i.e. there is gender parity in labor force participation in these countries). Taking an example of Nepal, one of the developing countries, the women’s participation in labor market is above 60% among the highest in the globe which is due to high level of labor migration to Middle Eastern and Gulf countries. The challenges of in-country female labor workers are dominated by the high participation rate.

The gender gap in labor market is not limited to just the women’s participation. Gender pension gap is one of the parts of the gaps which have affected women across the world. Data represent that balances of women during retirement are 30%-40% less than that of men across the globe. Across the Europe, the difference between male and female pension is observed from $4-49%, with majority of country having around 30%. Gender pay gap is considered as one of the reasons for the pension gap, however, The EU report shows that the average difference between men’s and women’s retirement income in member states is 36 per cent, more than twice the 16.3 per cent pay gap.

Such wide pension gap is attributed to multiple reasons. Lower earnings, interrupted careers and caring duties are some of the major reasons. In the US, women participate in the workforce just 75% of the time that men do and are almost twice as likely to be a part-time worker. They are more expected to likely to take breaks for caring their children or immediate family members. Women’s involvement in more ‘informal’ work affects their career and hence, results in less saving for pension. According to the ILO, the share of women in informal employment in developing countries was 4.6 percentage points higher than that of men, when including agricultural workers, and 7.8 percentage points higher when excluding them, in the latest year with available data (ILO, 2018b)

The fact the women are still earning less than men means they are also saving less throughout their working period and receiving lower matching contributions from employers. The gendered conceptions of roles, i.e. the types of job considered for male and female also contributes to this lower payment fr women. The types of job that women opt for are lower-paying than those held by men. Less than a quarter of people in senior management are women. In certain cases, women’s roles do not even qualify for pension plans which further widen the pension gap. In addition, research by consultant Mercer show that women are less likely to take higher risk than men when it comes to investment which further restricts on long-term financial growth.

These pension gender gap leads to increase poverty among women. In European Countries, women poverty is 16% in comparison to men which is 12%, with widows along with black and Latina women typically experiencing higher rates of poverty. Likewise, it is a well known fact that women lifespan is 2.5% higher than that of men, which means women have longer retirement than men and they need to accumulate more savings to meet the same levels of annual income that of men throughout their entire retirement. This also means women spent some years of her retirement along, in the US – 4.5 years, without having their spouse to share daily expenses or meet other needs such as health care.

Therefore, the need of attention to this overshadowed issue is urgent at present. Social partners like companies, organizations, civil society organizations, feminist institutions and government organizations have to play their part in addressing this issue. The companies and national policies targeting female workers should be developed as they play a big role in determining women’s participation and pension support. Family support policies to improve work–life balance, rights to paid leave and return to equivalent work, including affordable childcare services for working parents are some of the arenas whose improvement leads to increased women’s participation. It is also noted that less working hour has resulted in more women’s participation. Companies which offer flexible working hours have more women retention.

As such, female friendly policies should be developed and promoted by companies and organizations to cover the gender labor gap and enhance pension equity. Organizations and civil society organizations have role to play in regards to advocacy and developing evidence based research to bring the issue in light. It is high time that our voices, research, policies and implementation are all gender inclusive and equal.




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