Denmark, Finland, Iceland, Norway and Sweden actively promote gender equality at home, at work, and in public life. Promoting gender equality is embedded in the overall Nordic social policy model, including in the provision of universal health, social protection, education and labour market supports, and mainstreamed across the full range of public policies. The policy model also involves a large public sector and tripartite cooperation between employers’ organisations, trade unions and the state with collective agreements covering a majority of workers.

The Nordic policy approach aims to encourage all men and women to participate fully in paid employment. Mindful that gender gaps often emerge in full around the time of parenthood, Nordic policy aims to provide a continuum of support to families with children so that both fathers and mothers can pursue their labour market aspirations in full. Parents can access generous paid leave when children are very young, followed by a place in subsidised early childhood education and care (ECEC) and out-of-school-hours (OSH) care activities once children enter full-time education. Furthermore, to encourage fathers to engage more in care work at home, all of the Nordic countries provide paid leave that can only be used by fathers for two to three months, except Denmark which provides two weeks of paid paternity leave.

The Nordic countries have moved further along the path to gender equality than most other OECD countries; since the late 1960s, female employment rates have increased by about 20-25 percentage points, except in Finland where rates were already high. Some other OECD countries, such as France, the United Kingdom and the United States, have seen similar or sometimes even greater increases, but most of them started from a lower base. The striking feature of the Nordic countries is that they managed to increase and sustain female employment rates that were already high in the early 1970s and in 2016 ranged from 67.6% in Finland to 83.4% in Iceland, well above the OECD average of 59.4%.

As a result, labour market outcomes in the Nordic countries are among the most gender-equal in the OECD. Gender gaps in labour force participation and employment are among the OECD’s lowest at about 4 percentage points – the OECD average is 12 percentage points. Mothers are more likely to be in (full-time) employment than elsewhere, and couples tend to share paid and unpaid work more equally than in most other OECD countries. However, gender inequalities persist. For example, many women still find it too hard to progress to management positions and gender pay gaps range from 6% in Denmark to 18% in Finland for full-time employees at the median. The OECD average is 14%.

This report shows that, over the past decades, economic growth in the Nordic countries has benefited greatly from increases in women’s participation in the labour market. In Denmark, Iceland, Norway and Sweden, increases in female employment account for around 0.25-0.40 percentage points of average annual GDP per capita growth over the past 40-50 years – equivalent to 10-20% of the total GDP per capita growth rate – and a slightly smaller amount in Finland (0.05 percentage points, or about 3%). Converting to cash-equivalent amounts, this implies current GDP per capita in the Nordic countries might have been between USD 1 500 2010 PPP (Finland) and USD 9 000 (Norway) smaller had female employment remained at levels seen in the mid-1960s or early-1970s.

Changes in women’s working hours account for a much smaller portion of recent growth, though data availability puts limits on the period over which gains can be assessed. Women’s working hours have made the largest estimated contributions to the annual GDP per capita growth rate in Iceland and Norway, at roughly 0.15 percentage points annually, or the equivalent of about 8-9% of total annual GDP per capita growth. Changes in women’s working hours had a much smaller effect on growth in Denmark and Sweden while in Finland the decline in women’s average working hours had a small negative effect on growth.

Because gender participation gaps are currently small, further narrowing and eventually closing these gaps will have only a limited effect on projected growth in the Nordic countries. For example, closing remaining gender participation gaps by half by 2040 could increase projected annual GDP per capita growth rates by only up to 0.07 percentage points across the Nordic countries.

However, the Nordic countries could make larger gains if they were to narrow or close gender gaps in working hours, as well. Halving existing gender gaps in both participation and hours could add roughly 0.10-0.15 percentage points to projected average annual GDP per capita growth over the years to 2040, while going further and closing both gaps fully could add as much as around 0.25-0.40 percentage points. This would be equivalent to boosting annual GDP per capita growth by roughly 15-30%, depending on the country.

Despite significant progress in some dimensions, gender gaps persist and thus there should be no complacency going forward. Indeed, the Nordic countries are closer than most countries to achieving gender equality in the labour market. But the last mile may well prove to be the longest one.

For example, even in Iceland and Sweden – where fathers are more likely to take parental leave than anywhere else in the OECD – fathers still use less than 30% of all paid leave days, and mothers continue to be the main users of sharable leave. Might policy move towards fully-individualised paid parental leave systems to generate an even better sharing of paid and unpaid work?

It will also take time to address gender stereotypes at large and, for instance, deconstruct gender norms that discourage girls and young women from pursuing a career in the fields of science, technology, engineering or mathematics. To make further progress, a continued assessment of the effectiveness of existing policies and pay transparency initiatives is needed, such as the recently introduced mandatory pay certification in Iceland, to see how workplace practices can be improved. Only with resolve and a continued focus can Nordic countries ensure that men and women have equal labour market opportunities and career prospects and contribute to their economies and societies in gender equal measure.