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Empowering Women Worldwide

The Gender Pay-Gap on the Example of Austria

By: Julia Handl, FH JOANNEUM

Ms. Julia Handl has written a bachelor thesis on the topic of the gender pay gap in Austria.Much of what she found might also be interesting for other countries and environments. The following blog entry aims to summarize her findings.

The literature-based and empirical research for this scientific paper was conducted with the main objective of producing a recommendation for action that includes political and economic measures to combat the gender pay gap in Austria. To achieve this goal, it was first necessary to explain and analyze causes that explain part of the gender pay gap and the measures taken so far to combat it.

It is highly relevant to differentiate between the explainable and the unexplainable part of the gender pay gap. A certain percentage can be explained by gender-specific differences in the labour market. In the literature-based research and the empirical research conducted in the context of this Bachelor thesis, the same causes were defined as decisive. On the one hand, the high level of part-time employment among women is decisive for the size of the gender pay gap. Women are more likely to work part-time because, in addition to gainful employment, they also take care of household tasks and so-called care work, which includes childcare and caring for relatives. The imbalance in the division of these family responsibilities between partners can in turn be explained by socially shaped gender-specific gender roles.

Role stereotypes also lead to the fact that it is usually the woman who goes on maternity leave after starting a family. This interruption in employment leads to a loss of salary, which increases with the duration of the maternity leave. Due to the interruption of employment and the part-time employment, women have less work experience, training, and further education opportunities and accordingly their income is reduced in comparison to male colleagues. Moreover, it is often more difficult for women to return to full-time employment after maternity leave. On the one hand, because childcare is not adequately developed, and it is therefore not possible for women to pursue full-time employment. On the other hand, because there is a lack of support from companies.

In addition, labor market segregation has a great influence on the gender pay gap. A distinction is made between vertical and horizontal labor market segregation. Horizontal labor market segregation is about the fact that women and men work in different occupations. The problem is that the occupations in which women are employed are usually less well paid than male-dominated sectors and occupations. The problem of horizontal labor market segregation already starts with the choice of education for girls and boys. Vertical labor market segregation describes the underrepresentation of women in management positions. Both horizontal and vertical labor market segregation can be partly explained by gender stereotypes.

The causes explained so far have the strongest impact on the size of the gender pay gap. However, there are other factors that influence the gender pay gap. These include company size, company hierarchy and company affiliation. Women are usually employed in small andmedium-sized companies with strict hierarchies. In these companies, the pay gap is smaller than in large companies and companies with flat hierarchies. In addition, men tend to stay with a company longer, which increases their income. Furthermore, women and men behave differently in wage and salary negotiations, which can also explain part of the gender pay gap.

To combat the above-mentioned causes, some measures have already been taken nationwide in Austria. In the context of this bachelor thesis, measures were considered that have the highest relevance for the reduction of the gender pay gap. To create adequate childcare for working parents, municipalities are financially supported in the expansion of childcare facilities and all-day schools. In addition, parents can deduct childcare contributions from their taxes, and, under certain conditions, a childcare allowance can be claimed. This is intended to ensure that more parents can afford childcare. To promote a more intensive participation of fathers in family work, the family time bonus, the “Papamonth”, the option to choose childcare allowance, the possibility to share maternity leave and the calculator “Gleich=berechnet” were introduced. In addition, measures were introduced with part-time care leave and care leave to enable women to better reconcile gainful employment and caring for relatives. To counteract labour market segregation, measures such as the “Girl’s Day”, the “Boy’s Day” and the “Gender Promotion Project” were introduced. In addition to the measures to reduce causal factors, measures have also been taken to increase income transparency and thereby reduce the unexplained part of the gender pay gap. These include the obligation to indicate the minimum salary in job advertisements, the obligation to draw upincome reports for companies that meet certain requirements, the salary calculator and the “Fairer Wage” project.

Since the measures taken so far have not achieved a significant decrease in the gender pay gap, it is necessary to formulate new measures and optimize existing ones. From the empirical research conducted as part of this Bachelor’s thesis, it is clear that investment in childcare needs to be increased and a new financing system, such as task-oriented financial equalisation, needs to be introduced. In addition, parental contributions for childcare should be reduced or abolished altogether to ensure that all parents can afford childcare. In expanding childcare, it must also be ensured that enough educators are trained. In addition, financial incentives should be created for companies to set up company childcare facilities.

To improve the reconciliation of family and work, education and awareness-raising must be carried out to combat gender-specific stereotypes and role clichés. On the other hand, companies must be held responsible for supporting both women and men in reconciling family and work. Furthermore, making working hours and place of work more flexible, and a legal right to full-time employment would help women to fully participate in the labor market again after starting a family. To counteract the negative effects of career interruptions, maternity leave should be reduced to one year and divided equally between both parents. An egalitarian distribution would mean that each parent would receive six months of non-transferable parental leave entitlement, which would expire if not taken. To counteract horizontal labor market segregation, a main focus should be on thegender-sensitive childcare and education, which also includes gender-appropriate language, must be laid. There also needs to be a re-evaluation of sectors and occupations and a detailed job description and evaluation within the company. In the area of vertical labour market segregation, quotas on supervisory boards should be increased from 30% to 40% and further quotas should be introduced for boards, department heads and management positions. Furthermore, alternative leadership options such as shared leadership or part-time leadership should be promoted. In addition to the measures to reduce causal factors, measures to increase income transparency must also be tightened. Job advertisements should state a range and not just a minimum salary, income reports need to be made more precise and sharpened, and a salary transparency law needs to be considered.

By combining all three research questions and the holistic approach that considers theoretical foundations and empirical results, a conclusion can be drawn. To be able to fight the gender pay gap in Austria efficiently, a political prioritization must be made. Politicians and the business community must become aware of the importance of this issue. The measures taken so far are not consistent enough to achieve real progress. In addition to increasing income transparency, which leads to a reduction of the unexplained part of the gender pay gap, the gender-specific differences in the labor market must also be tackled to be able to counteract the overall gender injustice in the labor market.

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