Family-friendly policies and women's wages – is there a trade-off? Skill investments, occupational segregation and the gender pay gap in Germany, Sweden and the UK

Abstract

ABSTRACTRecent research has suggested that there is a trade-off between the ‘family-friendliness’ of jobs, occupations and welfare states on the one hand and women's relative wages on the other. In particular, the extensive family policies found in Scandinavia are thought to harm highly educated women by affecting occupational segregation and workplace skill development. In this article, we use pooled wage data from the European Social Survey of 2004 and 2010 to examine the mechanisms behind the gender wage gap in Germany, Sweden and the UK and compare the situation of high- and low-skilled employees. Our findings show that the gender wage gap among high-skilled employees in Sweden is larger than in the UK, but not larger than in Germany. Also, segregation and work-related training are no more important in Sweden than in the other countries. Another important finding is that the mechanisms behind the gender wage gap differ between high- and low-skilled employees in ways not predicted by the trade-off argument. In particular, the large unexplained wage gap among high-skilled employees provides new theoretical challenges.