Tag: women

Why Gender Pay Gap Data Mislead Us: Understanding The Dynamics Behind The Numbers

November 21, 2025November 25, 2025by Awareness NewsLeave a comment

Reading time: 8 minutes

The gender pay gap index is often perceived as a clear and straightforward indicator of inequality: the lower the gap, the more equal a society must be. Yet, when looking at European data, this assumption immediately breaks down. Countries widely recognized for their strong gender equality, such as Finland and Denmark, show some of the highest gender pay gaps in Europe, respectively of 16.8% and 14.0% in 2023. Conversely, Southern European countries, typically portrayed as less advanced in terms of labor equality, often show lower gaps, such as 2.2% in Italy, 5.1% in Malta and 8.6% in Portugal.

*Figure 1: The unadjusted gender pay gap, 2023 (difference between average gross hourly earnings of male and female employees as % of male gross earnings). Source: Eurostat*

*Figure 2: Gender Equality by Country, 2025. Source: World Population Review*

This counterintuitive pattern raises a key question: why do some of the most gender-progressive countries display such large pay gaps?

Understanding the answer requires unpacking what the gender pay gap actually measures and how structural factors shape the interpretation of the data.

A counterintuitive European puzzle: how labor participation affects the gender pay gap

According to Eurostat, the gender pay gap represents the average difference between male and female hourly earnings across an entire economy. However, this “raw” indicator does not adjust for variables such as employment rate, seniority, working hours, occupation, or industry composition. As a result, countries with very different labor market structures can produce misleading pay gap figures.

In the European context, Nordic countries display among the highest female labor participation rates in Europe. In Sweden and Finland, around 75-77% of working-age women are employed, compared to roughly 52% in Italy, according to the Eurostat data for 2021. This fundamental difference has two statistical consequences:

(1) More women participate across many sectors, including high-paying but male-dominated private industries, where pay disparities are more apparent.

(2) In low-participation countries, many women who would earn less or face structural disadvantages simply do not appear in the labor market statistics.

This means that a “low pay gap” can reflect fewer women working, not more equal pay.

Figure 3: Female labor force participation rate in Europe, 2024 (the average for 2024 in the European countries was 54.19%.The indicator is available from 1990 to 2024). Source: The World Bank

Structural factors shaping the gender pay gap

A low pay gap may also reflect structural constraints, cultural norms, or barriers that discourage women from entering specific sectors, or even from participating in the workforce altogether. In Italy, for instance, women are underrepresented in high-earning private-sector roles but are comparatively overrepresented in stable public-sector professions, where pay scales are more regulated. This combination tends to compress wage differentials and therefore “artificially” decrease the gender pay gap.

By contrast, in Nordic countries women participate across a wide range of sectors, including those with substantial wage dispersion. This results in a broader and more accurate representation of gender differences in earnings.

In this sense as well, a low pay gap is not inherently a sign of gender parity.

The role of part-time work and occupational segregation

A third major factor explaining the higher gender pay gaps in Northern Europe is the prevalence of part-time employment among women. According to Eurostat, countries such as the Netherlands and Denmark have some of the highest female part-time rates in Europe, compared to Southern European countries like Portugal, Greece, or Spain. Part-time jobs tend to be paid less per hour, offer fewer opportunities for career progression, and limit access to high-responsibility roles. Although part-time work in these countries is often facilitated by supportive family policies and may be a voluntary choice, it nevertheless contributes significantly to the gender pay gap.

This pattern results in greater salary divergence between genders, even in settings where equality norms are strong.

*Figure 4: Part-time Employment in Europe, 2021. Source: Eurostat*

The Nordic Gender Equality Paradox: when generous policies widen the gap

One of the most discussed phenomena in economic literature is the Nordic Gender Equality Paradox. Although, as previously mentioned, Nordic countries consistently lead global rankings on gender equality, research by the National Bureau of Economic Research (NBER) has shown that highly generous parental leave policies can unintentionally amplify long-term differences in earnings.

In countries such as Sweden, Denmark, and Finland, parental leave systems are among the most comprehensive in the world. While these policies ensure high levels of family wellbeing, they often result in women taking longer leave periods than men, leading to a slower re-entry into the labor market. This does not suggest that generous welfare policies are harmful; rather, it highlights how well-intentioned reforms can produce unintended labor-market outcomes when uptake remains uneven across genders.

In Nordic countries, despite continued efforts to encourage paternity leave, women still take the vast majority of parental-care responsibilities. This persistent imbalance shapes career progression and contributes to long-term differences in lifetime earnings trajectories.

Why public perception gets it wrong

Public understanding of the gender pay gap is often shaped by simplified narratives, headlines, or assumptions based on cultural stereotypes about specific regions. Surveys conducted by the Pew Research Center show that people tend to overestimate gender differences in some contexts and underestimate them in others.

Many assume that Nordic countries must have both high labor equality and low pay gaps. While this is true in some dimensions, such as political representation, education, and labor participation, pay gaps capture a more complex picture involving sectoral structures, parental leave, part-time work, and long-term career dynamics.

Similarly, countries with low pay gaps are often assumed to be more gender equal, even though low participation rates, lack of childcare infrastructure, or rigid labor markets may paint a very different picture.

This disconnection between perception and reality underscores the importance of interpreting gender statistics with nuance and understanding what each indicator actually measures.

Conclusion

The gender pay gap is a useful measure, but understanding what underlies it is essential. As European data shows, a low gap does not automatically signal high equality, nor does a high gap inherently indicate poor conditions for women. Instead, the gender pay gap must be interpreted within the broader context of labor participation, occupational patterns, welfare policies, and family dynamics.

Nordic countries exhibit higher raw pay gaps because their labor markets include almost all women, across all sectors, roles, and wage bands, and because generous parental leave policies influence long-term earnings. Southern European countries show lower raw gaps largely because fewer women work and those who do tend to be concentrated in more regulated sectors.

A nuanced interpretation is therefore essential. Understanding the mechanisms behind the numbers allows policymakers, students, and future professionals to build a clearer picture of labor market inequalities. Only by looking beyond surface-level statistics can societies meaningfully address the structural causes of wage disparities and design interventions that move beyond appearances toward real equality.

Sources: Eurostat; OECD; The World Bank; CEPR – VoxEU: The Nordic Model and Income Equality: Myths, Facts and Policy Lessons by Mogstad M., Salvanes K. G., & Torsvik G.; World Bank Group, Gender Data Portal; European Commission; The World Economic Forum, Global Gender Gap Report; The Economist: A Nordic Mystery; National Bureau Of Economic Research: The Child Penalty Atlas by Kleven H., Landais C., & Leite-Mariante G.; Pew Research Center, Global Attitudes on Gender Equality.

Margherita Ottavia Serafini

Writer

Female Exodus: Why U.S. Women Are Leaving The Labour Market

November 18, 2025by Awareness NewsLeave a comment

Reading time: 8 minutes

Since January 2025, more than 400,000 women have been leaving their jobs in the U.S., the steepest decline in over 40 years for mothers of young kids.

A female exodus that is dangerously erasing years of hard-won advances women made, particularly coming out of the pandemic, when flexible work policies enabled unprecedented labour participation rates.

Remote Work Trends And The Post-Covid Peak

On the wave of lockdowns, in May 2020 pandemics pushed almost 40% of employed Americans into working remotely. An undeniable jump, if we consider that just 3 years earlier only about 9-10% of workers would be reported working remotely. Later on, as offices reopened, that number fell, dropping to around 5.2% by September 2022 for those working remotely due to COVID.

However, remote work itself did not disappear. The pandemic left a mark in the labour market, as by early 2024 about 22.9% of U.S. employees were still teleworking. This shows how post-pandemic remote-hybrid work remained definitely more common than it was before, despite not reaching the emergency peak of 2020.

*Figure 1: Share of employment by gender in occupations that can be performed remotely.*
*Source: U.S. Census Bureau and USDOL/ETA*

Flexibility, Remote Work, and Women’s Labour Force Participation

Historically, women have been overrepresented in roles more adaptable to remote work, such as education, administration, and knowledge-based services. Thus, it is not surprising that when flexible work options arose, many women would capitalise on them.

For both men and women, the possibility of working remotely decreased the likelihood of dropping out of work. But this effect was more visible for women. In fact, prime-age women’s labour force participation (ages 25-54) reached record levels in the U.S., hitting around 77-78% in 2023.

*Figure 2: Labor force participation of U.S. prime-age women (1982–2025), by age of youngest child. Mothers with children under 5 peaked at 71% in 2023, then dropped to 68% in 2025.*
*Source: The Hamilton Project, Brookings.*

A Brookings analysis pointed out that since 2020 the group witnessing the fastest growth in labour force participation were those mothers with children under 5 years old. For most, indeed, remote and hybrid schedules created a bridge between work and family responsibilities, particularly also among highly educated or married women. Flexibility would not just retain workers, it actually unblocked participation from those groups previously precluded by rigid schedules.

But numbers speak loud: nowadays, something is changing.

Unaffordable Childcare and Caregiver Burnout

What is happening in front of our eyes is a clear childcare crisis. The stress and pressure to manage both career and childcare leave women overwhelmed and exhausted. In the U.S., many women struggle to find affordable childcare in a country with one of the highest costs in the world, often 30% or more of an average family’s income.

Figure 3: Cost of infant care as a share of median income across U.S. states in 2024. Darker shades indicate higher financial burden.
Source: Economic Policy Institute, via CNN.

Instead, countries such as Germany and Estonia have subsidised childcare, pushing down costs to near zero for many families. But many American mothers feel they have little choice but to quit their jobs. Similar story in the UK, where a recent survey has revealed that 43% of mothers revealed they had considered leaving their jobs due to childcare expenses.

Years of underinvestment and the end of expiration of pandemic-era subsidies are leaving American childcare supply in crisis. Women who have fought for their careers are now forced to drop out to preserve their mental health and family well-being.

Return-to-Office Mandates and Lost Flexibility

In January 2025, President Donald Trump ordered federal employees back in-person five days a week, despite many had remote work arrangements and some had even moved far away from their offices. Major private employers, such as Amazon and JPMorgan, followed the same wave.

It’s not a coincidence that women’s participation in the workforce is falling as flexibility disappears, says Julie Vogtman, senior director of job quality for the National Women’s Law Center.

Yet, return-to-office policies are not proven to make companies more productive. For instance, one 2024 study Van Dijcke, Gunsilius, and Wright of resumes at Microsoft, SpaceX, and Apple found that return-to-office policies led to an exodus of senior employees, which posed a potential threat to competitiveness of the larger firm. In other words, employers are losing talented workers, whose skills and institutional knowledge are difficult to replace. A talent drain that can even weaken the overall economy’s productivity and innovation.

To worsen things, women don’t feel respected in some workplaces, perceiving a clear cultural shift. Many have reported feeling less valued at work, with few diversity initiatives and a post-pandemic reversion to old norms.

It’s a pure storm of fading flexibility, harsher office demands and eroded support systems.

A McKinsey research suggests that women are even more likely to take on a lower-paying job if it implies benefits such as remote working and flexible schedules. If this trend increases, it will leave women disproportionately affected.

Furthermore, as women leave their jobs, the Trump administration is looking for ways to encourage women to get married and have more children, so as to slow down the country’s decline in birth rate.

Global Perspectives: Policies Matter

“The U.S. is the only advanced economy that’s had declining female labor force participation in the last 20 years, and a lot of that is because of lack of social safety net and caregiving supports” – Kate Bahn

Globally, about half of all women participate in the labour force, with huge regional disparities persisting.

Figure 4: Female labor force participation worldwide in 2024. Darker regions show higher shares of working-age women in the labor force, with stark contrasts between regions like Scandinavia and South Asia.
*Source: Our World in Data (2025), ILO Estimates.*

Deliberate policies have allowed women’s workforce participation to rise or held steady in many wealthy nations. Nordic countries like Iceland and Sweden lead in female employment, with gender gaps among the smallest in the world and a women’s participation rate of around 63-70%.

These countries differ from the U.S. as they heavily invest in affordable childcare, generous parental leave, and flexible schedules. Even the UK, Canada, and China have recently improved childcare subsidies or free preschool hours to push mothers to work. France and the Netherlands have high part-time options keeping women in the labour force, whereas Japan is pushing for “women economics” incentivising female employment.

On the other hand, countries that like the U.S. lack supportive policies see women pressed to choose between work and family, a choice that an emancipated society shouldn’t have.

Conclusion

Women leaving the workplace is not merely a personal or isolated decision. We are talking about a systematic problem depending on a complex interplay of societal norms, organisational practices and individual circumstances.

Factors such as work-life balance, career progression opportunities, social norms and expectations shape many women’s career decisions. Understanding the multifaceted nature of this trend is essential for designing effective strategies to retain and support women, ultimately benefitting the overall society and economy.

Sources: Bureau of Labor Statistics; Time Magazine; Allwork.Space; The Washington Post; University of Kansas (The Care Board/CBS News); Brookings Institution; Federal Reserve (FEDS Notes); World Economic Forum; Institute for Women’s Policy Research; KPMG; The Economist; The Hamilton Project; The New York Times; McKinsey Global Institute; Our World in Data; Qureos; Return to Office and the Tenure Distribution, Van Dijcke, Gunsilius & Wright, arXiv (2024)