Despite progress over generations, women still fare worse than men in labour markets. Cumulative differences in employment rates, participation in part-time work, compensation and work quality result in substantial gender gaps in earnings and career advancement. This contributes to lower lifetime earnings and a greater risk of old-age poverty for women.

Gender wage gap: The difference between the median full-time earnings of men and women, relative to the median full-time earnings of men.

A recent OECD analysis of a subset of countries finds that three-quarters of the gender wage gap between similarly-skilled women and men reflects pay differences within firms, including disparities in tasks, responsibilities and, to a lesser extent, differences in pay for work of equal value. One-quarter of the gap reflects the concentration of women in low-wage industries.

Horizontal segregation: The concentration of women and men in different labour market sectors and occupations. Women tend to be overrepresented in relatively low-wage fields.

Vertical segregation: The concentration of men and women in different job levels. Men tend to be overrepresented in management and leadership roles.

Though many countries have improved family support in recent years, the risk of gendered patterns in parental leave and childcare remains. After having children, women tend to take longer leaves of absence than men, and are more likely to work part-time. These shifts contribute to differences in wage growth between women and men – the so-called “motherhood penalty.”

One way to close this gap is to focus on men: if fathers are given non-transferable rights to parental leave, their leave uptake can increase significantly. One illustrative example is Iceland, where men’s share of all parental leave taken was just 3% prior to the introduction of mother and father quotas in the early 2000s. Subsequently, men’s share of leave taken increased to roughly one-third of total days used; that figure is now about 45%.

Many OECD countries have already made great strides in equalising parental leave. Some EU countries have introduced paid paternity leave, while others have increased the length of paid paternity leave entitlements or introduced non-transferable rights of leave for fathers.

Outside the EU, many other countries have also improved incentives for paternity leave.

Beyond leave taken around childbirth, the high cost of centre-based childcare in many OECD countries acts as a barrier for mothers to return to full-time work later on.

In addition to promoting gender equality in unpaid and flexible work and incentivising an equal use of parental leave, policies to promote affordable centre-based childcare are key to keeping mothers in the workforce.

Pay Transparency: An umbrella term for policy measures that make firm-level pay information visible in order to address gender pay gaps. Such measures include mandating the reporting of gender wage gaps by employers, equal-pay audits, and publishing salaries in job listings.

Measures to promote pay transparency are gaining momentum, with over half of OECD countries mandating regular gender wage gap reporting by private sector firms.

Within this group, nine OECD countries have implemented comprehensive equal pay auditing processes. These audits require additional gender data analysis and typically propose follow-up strategies.

Since the COVID-19 pandemic, working outside the office while connecting to it virtually – known as telework – has become the norm for many. This major shift has a gendered dimension, with early evidence suggesting that teleworking tends to boost men’s wages more systematically than women’s.

But the effects of telework on gender disparities in the labour market are still coming into view. Policymakers need data to accurately describe these effects and support interventions to ensure that telework helps close gender gaps.

Initial areas of focus for policymakers looking at the gendered effects of telework could include efforts to:

• Help managers challenge gendered assumptions around telework;

• strengthen female bargaining power; and

• combine telework with childcare, eldercare and flexible hours.