Women on the European Labour Market

In this policy brief, we summarise the results of six NEUJOBS working papers. These address issues related to women’s employment decisions, such as education, maternity, retirement, life-long learning, care choices, flexible employment contracts and salaries. Additionally, the document provides a more general picture of changes in female participation in European labour markets over the last two decades. Based on that, we identify several pathways to increased labour market activity among women.

During last two decades, women’s employment rates have improved significantly in virtually all EU member states. Increases in women’s employment were strong enough to alleviate the negative developments in male employment, leading to growth in employment rates for the population as a whole. Women of older age groups (45-64 years) experienced the most notable employment improvements, especially in the 2000s. However, there is a noticeable room for future action, especially in southern Europe and CEEs.

Most of employment improvements among women was driven by changes in their involvment in the labour market. Moreover, a positive contribution was also made by a shift in the educational composition among women. As well-educated women have higher employment rates, the increasing share of women graduating from tertiary education positively stimulates total employment rates. This shift played a relatively greater role in the NMSs than in EU15.

Today 2/3 of young women enter university, compared to 52% of young men. However, growing popularity of tertiary education negatively affected employment rates of young women. Female students tend not to combine tertiary education with work and as a result the average age on entering the labour market increases. Moreover, the recession has aggravated the problem of joblessness among young people. School-to-work transition is easier in countries where study is frequently combined with work. Students can strongly benefit from the possibility of part-time employment and flexible working hours arrangements. Programmes such as summer jobs, internships and apprenticeships have a positive impact on future labour market activity.

Maternity is often associated with women’s withdrawal from employment for a significant period of time. Developed public childcare services can support young mothers in the return to the labour market. The evidence suggests that countries with higher expenditure on pre-school child services tend to have higher employment rates among young mothers. The two major policy components in the field of care are the formal, institutional, publicly-provided care on the one hand; and market-oriented, publicly funded but privately provided cash-for-care on the other. Formal care and more gender-equal distribution of childcare have positive impact on reduction of gender gap in labour market participation and growth of fertility rates. The informal care is described by opposite dependence.

Flexible workplace arrangements, such as flexible working hours, are other means of helping parents cope with childcare. Policymakers should ensure that the flexible contracts offered to mothers are non-discriminatory, i.e. provide the same hourly wages and a similar level of employment protection as ordinary contracts. Also the duration of parental leave should be assessed carefully. If it is too short women might not be able to return to full-time employment, instead choosing inactivity. Too long leave lead to skill deterioration and a decrease in women’s chances to return to the labour market.

Development of workers’ skills through life-long learning (LLL) can extend their skills and make them to stay longer in employment. The cross-country analysis show that women are more likely to opt out of further education due to family reasons. An improvement in women’s LLL participation can be achieved by policy which remove obstacles to the balance between education and family life. What is more, well-educated individuals are more likely to engage in LLL, what implies rising human capital inequities between socio-economic groups. To prevent this, it is crucial to pay a particular attention to low-skilled women with low labour market attachment.

Gender wage discrimination is another obstacle to full utilisation of women’s labour. The size of gender wage gap significantly varies across countries. We identify that the premium earned by men is epecially high in Czech Republic, Poland, Portugal and Slovakia (female prime-age workers earn 25-30% less than male). In majority of EU countries the wage gap grows with age, with the peak at around 40-49 years, and tends to slow down or decrease.

What is more, women working on fixed-term contracts or part-time basis earn hourly less than woman working on a regular basis. Simultaneously, part-time work is more beneficial for female with higher incomes. Equalizing employment protection levels under different employment contracts types reduces employment segmentation and wage penalties. Anti-discriminatory efforts are connected with development of social services as countries with well-established policies supporting mothers tend to have lower gender pay gaps.

Evidence from countries that have already increased women’s retirement age suggests that this has a crucial impact on postpones women‘s withdrawal from the labour market. By 2040 the number of countries that has different pensionable ages of men and women is expected to decrease from 12 to 3. At the same time, the legal retirement  age for women will increase in 19 member states. Another aspect of pension system that can negatively affect women’s employment rates are high replacement rates that discourage continued employment, especially for people on low incomes. Current pension system reforms introducing a closer link between lifetime contributions and pension benefits, are expected to increase employment rates among older women.

To sum up, the key recommendation relates to the institutional framework helping to reconcile careers with family life. Flexible employment arrangements and better access to formal care facilities( in particular childcare) play an essencial role here. In addition, the increased involvment of men in family life is of considerable importance and needs to be supported by legal changes. Flexible working hours would be helpful inter alia for women who aim to increase their qualifications. Another scope of policies affecting female employment concern redesign of pensions systems.

Download the working papers from here.