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Astrid Kunze - Why do women fall behind men

Classification Demography, family, and gender

Astrid Kunze, Professor of Economics at the Norwegian School of Economics, discusses why women fall behind men.

Why do women fall behind men in terms of career prospects and wages?
I think this is a very good way of asking about the sources of gender wage gap, to think of when does the gender wage gap arise. If you think about careers over time, it’s important that we follow them over education, and then there’s the first entry into the labor market. That’s the first time we observe wages for men and women.

Then they continue working, then the next big event we observe in careers is when people form families and they have their first child, and then afterwards they may continue working or have further children. So what we observe is really that there is an entry wage gap.

There’s some variation, some studies find actually no gender wage gap when we look at men and women with similar education, but quite a body of research still finds that also at entry already women enter the lower wage than men. So that’s the first source of gender wage gap.

Then as men and women work, usually as single and without children, we also observe actually that the gender wage gap increases already. So by the time they have their first child, there are already two reasons why there may be a wage gap.

But then we see a further and even larger increase in the gender wage gap because women, after first birth, go down in terms of wages. For men, on the contrary, we tend to observe that they stay on the same wage track or even increase wages, which may be due to several factors.

Also, of course the fact that women go down is related to parental leave that has become institutionalised more and more in countries and its job protected, so there has been a lot of progress to ensure that women can return to their previous job after birth.

But then over time after the birth, we actually observe which is quite noteworthy that women never catch up. You may think as children grow older, women can return to their previous career tracks, especially if you think of high skilled lawyers, people with very high university education, but we seem not to observe this. So the gender wage gap prevails over the life cycle.

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    Country labor market predictions: Astrid Kunze on the Norway labor market.

    So the greatest challenge in Norway, or in, I know most about Norway, one often puts together the Scandinavian countries, seen from the outside of course they have a lot of similarities however, they are also quite different in some respects. So if I really look at Norway, and female employment, I guess your question’s also regarding female employment and women in the labor market, I would say a big challenge is really that the public sector is so large in Norway. So sixty per cent of women are working in the public sector.

    Now the definition of the public sector is always a bit tricky because like health, every country needs a health sector, so it’s a question of how taxes are organised. But I would say, think that regarding wages it’s good to have a competitive private sector that gives women also the option to move in and out of the public sector. So that’s a big challenge I think generally, that we observe very little mobility between public and private sector, and that has of course an effect on wages, because public sectors usually pay lower, they offer different work schedules which have some amenities that compensate for that.

    But then in the private sector you can really make higher wages in some sectors specifically. So I think this was one sector, one big question, big challenge that Norway has to deal with.

    The other is incentives. The incentive to work. Of course working hours go down generally, which is a good thing, because in some countries still forty-two hours is a full time job, that’s difficult to combine with having a family. And at the same time we want to have high fertility, which is a huge challenge for many countries.

    Now, Norway is in the fortunate position that they still have quite high fertility, but it’s also below two. So I think that an incentive to invest effort, to invest in productivity that’s a big challenge. Also given that the wages are very high in Norway so the incentive to move to other countries, like for university graduates, I think is not as high as in other countries.

    But in globalised markets we would think this is very important that there is also a lot of mobility. But also of course in the country if you just look over careers, incentive to invest more, to increase wages over the career, are very important for the firms and for the individuals. So given the high welfare state cushions employees against a lot of risk, I believe this is a huge challenge also given the expenditure of course of the welfare state which are huge and we need tax income to finance the welfare state and sustain the welfare state.

    So the third challenge I think is really the expansion of the private sector, what industries Norway will go into now they have been living on the fish industry and the oil sector very well for many years but of course this will not go on, so it’s very important I think for Norway to invest in the education sector and develop new private sectors that can create the employment for the future.

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