"There are also a wide range of other factors that contribute to the pay gap, which can also be seen as gender equality problems. These include, for example, the fact that women are less likely to advance to higher positions, which may also be due to discriminatory structures in the labour market. Men work more hours than women, and work more overtime, while women are still more likely to work part-time and take partial care leave to look after children. Parental leave is also still very unevenly distributed between the sexes. Young women are in a worse labour market position than men due to the expectation of family leave, which can also affect income levels." (PuE2)
"Women still take much more family leave than men. Women are also more likely to work part-time than men." (TU2)
"Unfortunately, mothers still take the largest share of family leave, which means that family responsibilities often fall disproportionately on mothers. The family leave system should therefore provide greater incentives for families to share leave more equally between both parents.
The so-called ‘child penalty’, which refers to absences due to family leave, has been shown to have a significant impact on gender pay and career progression. To promote gender equality in the labour market, family and care responsibilities must be shared equally between parents.
Women are still significantly more likely to have fixed-term contracts than men. Two-thirds of all new employment contracts for women are fixed-term, compared to less than half for men. The concentration of fixed-term contracts among women is often justified by the high rate of family leave in female-dominated sectors. However, only one third of fixed-term contracts are concluded on a temporary basis." (TU3)
Comments
It can be noted that there are no clear differences, possibly reflecting conflicts of interest, in the responses of the representative of a public sector employer organisation and the two representatives of central trade union organisations.
There seems to be an awareness of the relationship between working hours and caring responsibilities, and that there is an unequal distribution between women and men that has a negative impact on women’s pay. This is also recognised by the representative of the group of researchers and independent experts, as well as by the representative of the government agencies. For example, the ‘motherhood penalty’ is mentioned; studies have shown that, in terms of pay development, women are negatively affected by having children, while men tend to benefit from having children (see, e.g., Kahn et al., 2014; Grimshaw & Rubery, 2015; Adams-Prassl et al., 2024; Sundberg, 2024).
Suggestions for solutions come from a trade union representative and an independent expert, who point to the potential of policy; the unequal distribution of unpaid care and household responsibilities affects women’s and men’s working hours differently, and by extension their pay, and examples are given of interventions that have historically made a difference (cf. Nordic Council of Ministers, 2019). The responses highlight the importance of looking at the underlying factors of the pay gap, alongside job evaluation and anti-discrimination legislation. However, previous research has problematised the tendency to relegate the problem to the private sphere, when there are measures that employers can take related to work organisation and opportunities for flexibility (see, e.g., Goldin, 2014; Barbieri et al., 2019).
The issue of pay negotiation at the time of hiring is raised by a few respondents. However, this is included as a background to the EU Pay Transparency Directive (EU 2023/970), which requires employers to disclose pay levels for different categories of employees (Stüber, 2024). There have been some studies on the importance of starting pay and social norms that can influence the outcome of an average gender pay gap (see, e.g., Säve-Söderbergh, 2019; Hernandez-Arenaz & Iriberri, 2019; Kiessling et al., 2024).
The responses also raise the issue of women’s and men’s opportunities for advancement to higher positions, where the term ‘glass ceiling’ is often used to describe the hierarchical segregation that results in women typically comprising a smaller and smaller proportion of those occupying management positions in companies and organisations further up the management hierarchy. This is addressed in one of the four criteria in the European Commission’s model for identifying solutions on the road to equal pay for equal work and work of equal value (see previous chapter on theoretical approaches; European Commission, 2022). In addition, there have been some studies in this area, covering both statistics and explanatory models (see, e.g., Kanter, 1977; Bertrand, 2018; Kraft, 2022; Taparia & Lenka, 2024; ILO, 2019).
The Nordic labour market models
The Nordic labour markets are characterised by a number of common institutions, actors, and values, and hence they are discussed here collectively as a family of labour market models. One common aspect, among others, is the organisation of the labour market based on the interaction between statutory and collective bargaining regulation; while the framework for the labour market is established by the state – for example through legislation on discrimination or parental leave – social partners negotiate applicable labour market conditions, such as pay for work performed (Dølvik, 2013; Dølvik et al., 2014).
General pay formation
Several respondents commented in their answers on current labour market models and the consequences for the pay gap.
First, extracts from the responses of employer organisations, in both the private and public sectors, are presented.
"An obvious challenge lies in the definition of ‘work of equal value’. Even if all parties could agree on what constitutes equal pay for work of equal value, we have a dynamic labour market in which the demand and supply of labour, and therefore remuneration, is constantly changing. Pay is also not the only factor in play. There are various other factors that influence remuneration, flexibility, working hours and environment, benefits, job security, etc. How do you value all these aspects?" (PrE2)
"The issue of equal pay for work of equal value assumes that pay differentials between sectors and industries are a problem. This is not the case. Pay levels vary between different labour market sectors, industries or occupations and this is fundamental given the evolution of the labour market. Historically, pay has been slightly higher in the private sector compared to the public sector, while job security has been higher for those in local or central government. This is still true for many occupations. Pay levels also reflect the earning power of different industries, financial margins and job requirements. It is fundamentally good that people can choose between jobs that offer different advantages and disadvantages, including, for example, in terms of pay, working hours and skill requirements." (PrE3)
"Municipalities face particular challenges in terms of equal pay. Although there is a high degree of pay transparency and central pay determination in the local public sector, the gender segregated labour market is one of the main causes of the gender pay gap. Although the local public sector is the sector with the smallest gender pay gap, this can largely be attributed to the high proportion of women in the health and social care sector.
The unique structure of municipalities, where responsibility for all municipal employees is centralised under municipal management, creates additional challenges. When you are responsible for many thousands of employees across a wide range of occupational groups, implementing a regulatory framework to equalise all positions is both time and resource intensive." (PuE1)
These can be compared with the following extracts from responses from trade unions.
"The law should clearly define equal pay and equal value of work. There should also be a universal set of criteria covering all sectors/occupations to evaluate the demands of the work. Currently, there is no definition of work of equal value or assessment factors for determining the level of demand in the legal provisions of this country. There should be a way to assess equality at work between different collective agreements. This would require cooperation on pay systems between different sectors. Of course, these are very difficult objectives and application would be very challenging in practice" (TU2)
"There has been a discussion in recent years about whether the central system for pay formation (in Norway called the frontfagsmodellen, in Sweden märket) is implemented such that large female-dominated groups in the public sector are constantly lagging behind in terms of pay. Industry conducts negotiations first, and what is agreed establishes norms for the remaining groups who conduct negotiations afterwards. But instead of a norm, the pay range negotiated by industry has become a ceiling for public sector employers. The private sector cannot manage its own pay framework either. Year after year, we see the pay framework being blown up while the public sector continues to adhere to it." (TU4)
The following are two responses from researchers or independent experts.
"The starting point of the Nordic labour market model is that legislation largely does not touch on issues of pay formation. There are, however, a number of areas governed by policy that directly or indirectly affect career choices and differences in lifetime earnings between the sexes. Such areas include tax policy, childcare provisions, parental insurance, the right to parental leave, conditions for conducting public activities, etc. Other areas governed by the public sector include the enforcement of labour law and discrimination legislation. In addition, political assemblies are ultimately responsible for setting public sector pay.
At times when inflation is higher than the level of pay increases that are directly or indirectly determined by centralised pay setting models, the so-called ‘märket’ or ‘frontfagsmodellen’, the basic conditions for compensating price increases differ between the private and public sectors. The public sector has less scope to pass on cost increases to ‘customers’ than the private sector. It is political assemblies that have the mandate to increase budget allocations or reprioritise within budgets. The requirements for taking industrial action (to force higher pay or better working conditions) and the effects of industrial action (who suffers first) also differ between the public and private sectors." (E2)
"At the moment, the Finnish ‘tripartite model’ for drafting labour and equality legislation is in a bad state. Employee representatives criticise the government for using the employer position as the basis for new legislative proposals. For example, the government programme mentions legislation that prohibits the National Conciliator from proposing solutions that would allow the pay level of the import sector (male-dominated), as established in the collective agreement, to be exceeded by any other sectoral collective agreement in labour disputes. As the import sector is heavily male-dominated and domestic sectors are female-dominated, such legislation could be indirectly discriminatory. One of the problems lies in the increasing importance of local collective agreements. Traditionally, central labour market organisations have been active in gender equality issues." (E5)
Comments
Judging from the responses highlighted, there are significant conflicts of goals and interests in terms of pay formation, not least when it comes to comparing the private and public sectors. On the one hand, there is a conflict between employer and employee interests, which in the Nordic countries is managed through what researchers have described as a conflict partnership (Dølvik, 2013), and on the other hand, there are conflicts of goals that can be illustrated by debates between central trade union organisations in Norway over the so-called frontfagsmodellen, in which Akademikerförbundet SSR (the Union for Professionals), YS, Unio and LO have taken fundamentally opposing positions, with some questioning the model and others defending it (Arup Seip & Svarstad, 2023).
It should be noted that the general attitude among labour market parties, both central trade union organisations and employer organisations in the private and public sectors, is that it is worth defending the Nordic model, in which pay formation is managed through negotiation, and government intervention is kept to a minimum. The argument is that the model is generally considered to work well. At the same time, there are studies that indicate that party autonomy has been used as an argument in opposition to compliance with conventions and legislation on equal pay for work of equal value (see, e.g., Svenaeus, 2017). Instead, women are often encouraged to apply for male-dominated occupations with higher pay (Wagner et al., 2020).
Furthermore, a study in Finland notes that the social partners often state that they are committed to promoting gender equality and that they evaluate the effects of collective agreements in this regard, but at the same time this rarely seems to result in any specific measures that lead to change (Nousiainen et al., 2023). A report from the then government of Finland stated that the current procedure of cooperation on a tripartite basis (employers, trade unions, state), which is also recommended by ILO Convention No. 100, has proven to be problematic in the context of gender equality. This is because the primary task of the parties is to promote the interests of the groups they represent, and since there are conflicts of interest between these, it is difficult to gain acceptance for a permanent change in the wage situation between occupational groups (Government of Finland, 2022; cf. Svenaeus, 2017).
Something can also be said briefly about the difference between bargaining power between unions in the public and private sectors that one of the independent experts highlights, and which they have reason to pay attention to. In the event of a strike in the private sector, the employer's finances are affected fairly immediately. In the event of a strike in the public sector, the employer is instead spared wage costs and the one who is immediately affected is the third party (patients, students, etc.) (Ekberg & Andersson, 2016).
Proposed actions
Among the responses, there are various suggestions for actions that respondents argue could contribute to reducing the gender pay gap.
"It is necessary to distinguish the handling of pay issues as a matter of negotiation (where the union represents its own members) from cooperation to ensure equal pay (where the employee representatives, similar to a safety representative, are expected to represent all employees). The need for comparisons and analyses across agreements is particularly relevant in the case of work of equal value (but not in the case of equal work). Thus, the role of employee representatives in a collaborative process on pay mapping differs from the traditional role of trade unions in representing members in pay negotiations." (E2)
"Labour market parties should take more responsibility in implementing the principle of equal pay. All pay setting should be based on objective job evaluation systems (and not, for example, on job titles). The position of labour market parties can only be defended if they commit to taking responsibility for fundamental principles, including non-discrimination and the promotion of equal pay." (E3)
"The introduction of a definition of the value of work from the Pay Transparency Directive is a forward step that needs to be taken.
In the public sector, it will be crucial for parties to accept that pay is not market-determined, which is why an analysis of the value of work can be useful in setting pay." (E4)
"The frontfag model must be applied in a way that ensures that large groups do not lag behind in pay development. The Equal Pay Commission proposed an equal pay pot back in 2009. This has never been politicised, but we still think it is a good idea." (TU4)
"There is a long tradition of minimum pay and pay issues being agreed between labour market parties. They have also managed to reach agreements on exceeding the general level of pay increase in female-dominated sectors. The freest possible interaction between labour market parties provides an opportunity to take account of local conditions for a functioning labour market, correct pay gaps and develop objective pay systems, which also promotes the principle of equal pay. " (OA2)
"Policies can also influence structures that improve the conditions for women and men to pursue a career and improve their pay development. For example, by opening up traditionally public organisations to private actors or counteracting stereotypical education and career choices. This will contribute to a more even gender balance in the labour market over time and provide a more balanced pay position between traditionally female and male sectors and industries." (PrE2)
Comments
These extracts from the responses raise a number of different aspects and suggestions, some pointing to the responsibilities that come with party autonomy, others dealing with the relationship between pay and market forces (and this may include the issue of the central pay formation models frontfagsmodellen/märket), as well as how pay is set and how structural conditions that determine pay differentials can be addressed. It can be noted that certain contradictions are discernible among the responses, especially when it comes to market forces. In the last response, a respondent representing employer organisations in the private sector points to the market as an opportunity to raise women’s pay through competition. There are studies that indicate that the market argument has not been used by women in the public sector (Wagner & Teigen, 2022). However, attempts to open up to private actors have also not been shown to lead to a reduction in the gender pay gap, and have even led to a deterioration in the pay of care workers (de los Reyes, 2014; Egede Hansen et al., 2022).