COVID-19 has disproportionate impact on female unemployment rates in the OECD

COVID-19 has disproportionate impact on female unemployment rates in the OECD

PwC Women in Work Index

  • Belgium has maintained its position in 10th place among OECD countries
  • The gender wage gap in Belgium (4.8%) is third best in the OECD and significantly better than the OECD average (15%)
  • Overall Belgium’s performance continues to be held back by a low rate of female labour participation (64.9%, 27th place) compared to other OECD countries
  • The damage from COVID-19 is disproportionately being felt by women, as more women than men are employed in the sectors hardest hit
  • It is estimated that with economic recovery starting in 2022, it will take at least until 2023 for the Index to return to its 2019 level of gender equality based on the index’s historical growth rates

Thursday 4 March 2021 - International Women’s Day 2021 on 8 March marks another year of continued efforts to improve the representation and welfare of women in the world of work. The ninth annual update of the PwC Women in Work Index combines five key indicators of female economic empowerment: the equality of earnings with men; the proportion of women in work, both in absolute terms and relative to men; the female unemployment rate; and the proportion of women in full-time employment. This year’s statistics are from calendar year 2019, reflecting performance prior to COVID-19 pandemic.

Belgium maintained its position as 10th in the ranking. Iceland and Sweden retained the top two positions respectively for the sixth year in a row, with New Zealand in third place. The Netherlands’ ranking increased by 2 places between 2018 and 2019 from 19th to 17th; it was one of the few OECD countries to show improvements across all 5 labour market indicators and most of these improvements were large relative to improvements made elsewhere in the OECD.

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Performance of Belgium in 2019

Although historically Belgium is the third biggest upward mover in the Women in Work Index (going from 20th place in 2000 to 10th place in 2019), little progress was made in 2019. The female full-time employment rate remained the same at 72.0%, while the female labour force participation rate improved from 64.3% to 64.9% in 2019. Belgium’s gender wage gap (defined as the difference in median earnings between males and females) was further reduced from 5.8% to 4.8% 2019, making it third best in the OECD and significantly better than the OECD average of 15%.

One of the key areas holding back Belgian progress in the Women In Work Index is female labour force participation, with Belgium ranking 27th of the 33 OECD countries in this research. Only 64.9% of women in Belgium participate in the labour market, and of those only 72% work full time, compared to the OECD averages of 70% and 76% respectively. In comparison, Iceland has a female labour participation rate of 84.4%, making it the country with the highest proportion of women in the labour market.

“It’s positive to see that Belgium stands out in terms of the gender pay gap, and that we’ve moved up from in 8th place to 7th in the OECD in terms of female representation in the boardroom at 36.7%,” states Griet Helsen, Partner at PwC Belgium. “However, in the context of an ageing population putting downward pressure on labour supply, it’s crucial we focus on increasing women's participation in the labour market, and it’s essential they have the right technical skills to capitalise upon the opportunities offered by the Fourth Industrial Revolution”.

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Impact of COVID-19 pandemic

Now COVID-19 threatens to reverse some of the progress made over the last decade. The evidence emerging around the world is that the damage from COVID-19 is disproportionately being felt by women, as more women than men are employed in the sectors hardest hit (such as food services, accommodation, real estate, retail, arts, entertainment and recreation). Women’s job losses outpaced men’s in 2020 across the OECD, and with various support schemes still masking the full effects of the economic fallout on employment, the worst is likely yet to come for women.

In some countries there is evidence of women reducing their participation in the labour force because of COVID-19, with many more considering leaving jobs and/or reducing their hours if things don’t get easier. This is driven by the unequal burden of unpaid care and domestic work that women undertake across the world. Before the pandemic, women were already spending three times as long as men on household chores, childcare, and care for elderly loved ones. Our analysis finds that after 9 years of the Women in Work Index showing progress towards gender parity in the workplace, we expect to see this reverse in the next two years of reporting, with the Index falling back to 2017 levels by 2021. Assuming a return to the same rate of historical growth from 2021, as labour markets recover, the Index will only return to its current 2019 value by 2023.

A real cause for concern is that the damage caused could be lasting,” explains Griet Helsen, Partner at PwC Belgium.  “Without direct action by governments, organisations, and society empowering women to participate in the labour market, we will not return to our pre-pandemic growth path of progress towards gender equality. Advancing the progression and representation of women in the workplace, closing gender pay gaps, retraining and re-skilling women so they can access employment in high growth sectors - concerted efforts are needed here to offset the impact of the crisis and get us back on track.

Potential economic gains from improving female economic empowerment

Our analysis provides estimates of the broad order of magnitude of potential gains for each country from increasing female employment rates to match those of Sweden – a consistently top performer in our Index with a female employment rate of 81.1%.  The potential long-term economic gains across the OECD from an increase in the female employment rate to match that of Index leader Sweden could amount to a GDP increase of over USD 6 trillion. Fully closing the gender pay gap could boost GDP in the OECD by USD 2 trillion. The economic benefit to Belgium would be a 13% increase in GDP per annum, estimated at USD 83 billion.

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About PwC’s Women in Work Index

The PwC Women in Work Index combines five key indicators of female economic empowerment in 2019 across 33 OECD countries. The five indicators that make up the PwC Women in Work Index are: the gender wage gap, the female labour force participation rate, the gap between male and female labour force participation, the female unemployment rate and female full-time employment rate.

The annual Women in Work Index uses OECD data (actuals) for calendar year 2019. To assess the potential impact of COVID-19 on the Index, OECD forecasts for the labour market size and unemployment rate are used to estimate the Index in 2020, 2021 and 2022.

Read PwC’s Women in Work Index for more insights.

Contact

Erik Oosthuizen

erik.oosthuizen@pwc.com
0474 56 42 76

www.pwc.com

 

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