Sticky floors or glass ceilings? The role of human capital, working time flexibility and discrimination in the gender wage gap

Abstract

Despite changes in social norms and policies, on average across 25 European countries, there remains a gap of around 15% in hourly earnings between similarly-qualified men and women. This raises inequality and limits growth by preventing women from reaching their full labour market potential. Using individual-level data, this paper quantifies the main drivers of gender wage gaps with a view to devising effective policies to reduce them. The findings suggest that, on average, “sticky floors” related to social norms, gender stereotyping and discrimination account for 40% of the gender wage gap, while the “glass ceiling” related to the motherhood penalty accounts for around 60%. The importance of the “glass ceiling” is especially large in most Northern and Western European countries, while “sticky floors” explain the major part of the gap in most Central and Eastern European countries. These results imply that most Northern and Western European countries need to prioritise policies to address the motherhood penalty, such as further promoting flexitime and telework and supporting early childcare. Most Central and Eastern European as well as Southern European countries, where “sticky floors” are more important, additionally need to prioritise equal pay and pay transparency laws, measures to address gender stereotyping, competition in product markets, as well as higher wage floors where they are currently low.