Gender gaps in education and labour market outcomes – where do they come from?

As an economist Sjögren exemplified it through the perspective of “supply and demand”. The “supply” side is represented by individual choices such as human capital investments, occupational choices, labour supply and family formation. The “demand” side is affected by gender biases in employers’ decisions regarding employment and promotions. The labour market, as the rest of our society, is also affected by institutions and gender norms.

In the 1970s women first started to catch up with men in terms of educational outcomes. In Europe there is a trend where women not only have caught up with men, but also have taken over when it comes to having a higher degree of education. Even though women in the western world have passed men when it comes to higher education, men are still dominating in higher paying fields. While women are dominating within the healthcare and educational sectors, men are dominant within the technical fields of for example maths and engineering. Over the years we can also see a pattern where men tend to work full time to a higher extent compared to women.

In 2021 there is still a stubborn wage gap between men and women, although the gap with time has gotten smaller men continue to earn more than women. Research has shown that the wage gap is larger at the top compared to the bottom of the wage distribution. As women have advanced within higher education, they are more likely to be able to compete for those high paying jobs. However, women continue to earn 20% less than men within these sectors. How can it be that women are dominating in higher education, but men continue to earn more?

As previously mentioned, there are several different factors that contribute to the gender gap in the labour market. One of the factors mentioned is family formation which for women often leads to the so-called “child penalty”. There is a difference between women that have children and women that do not have children. Women that have children tend to fall behind in income which is explained by parental leave and increased half time work. After having children many women also tend to work within more “family friendly” professions which are less career focused. Some might make this choice on their own terms while others are forced into it due to employment discrimination. As we know, not only women that become parents in their lifetime. However, this type of “child penalty” is not applicable to men to the same extent. The difference in income between men that have children and men that do not is marginal. Research has shown that men that have children most of the time keep on working as usual and therefore their income keeps going up. This is just one of many explanations to why the gender gap remains in the labour market.

Although we can see a positive change as the gender gap is slowly closing there is still room and need for change to reach equality within the labour market.