15/03/2024
Good morning, and thank you for having me. International Women’s Day can be a day to reflect on the contributions that women are making across all sectors of our economy and community and to look towards the future where we still hope for a more equal playing field.
Women’s economic empowerment – that is their ability to contribute to and be part of the economy is not only crucial for gender equality – but it is also just good economics. How can we expect to reach our full potential as a nation, if we are not making the most of half our population.
And women’s sport is increasingly becoming an economic driver, which we’ve seen with the rapid rise of the AFLW, cricket and of course the success of the Matildas. This is resulting in improved sponsorship options and better pay – but from an extremely low base. By and large, female sportspeople are still not seeing the financial rewards of their male counterparts.
We have certainly made good progress on many aspects of gender equality, but progress is still slow, and many barriers remain. Young girls and women are expecting the same career options as men – and that applies equally whether you are talking about business or engineering or professional sports – both on and off the field.
For example, women have made great progress on educational attainment in recent decades. Girls are typically performing better academically than boys in primary and secondary school, and now make up the majority of university enrolments.
However, despite this, we still have high levels of occupational gender segregation – and a lot of this is along income lines – where male-dominated industries tend to be highly paid, while female-dominated industries, particularly in the care sector, remain undervalued. This is the key contributor to the ongoing gender pay gap.
Women remain largely in the same occupations as they were in the 1980s. Research suggests that gender stereotypes continue to drive occupation choices – particularly in higher-paying fields. Role models and mentoring are really important here and we can see the benefits that strong female role models have been having in the sporting world.
Gender segregation of industries starts early. The proportion of women studying highly remunerated science and engineering fields has remained low. This contributes to the gender pay gap, as it is hard to find female talent for employment in those sectors when the talent pipeline is skewed so heavily towards men.
Traditionally male-dominated industries like construction remain more persistently segregated than others because of cultural rules and norms around working hours and stereotypes of construction being a ‘man’s club’ or masculine attitudes being hostile to women in the workplace.
Equal participation also goes the other way: female-dominated industries such as healthcare discourage men from entering due to discrimination by patients and staff, and negative stereotypes about male nurses and child care workers are reinforced through popular culture. This also contributes to skills shortages. This is not getting better and many industries are actually becoming more gender segregated.
The gender pay gap is declining, but extraordinarily slowly. More progress needs to be made, and addressing occupational segregation is key to this.
WA unfortunately has one of the highest gender pay gaps in the country, driven particularly by the mining sector which is very highly paid but where women only make up 19 per cent of the workforce. Women in WA remain in lower paid occupations such as health care and social assistance. Some of this has even got worse over time, not better. In WA the share of men in the public sector, which is generally lower paid, has fallen, while the share of women has increased. On the positive side, there has been some improvement at higher levels with the proportion of women on state government boards now sitting at just over 50 per cent. But more can be done.
As well as my role at CEDA I am the WA Chair of the Women in Economics Network. What has become clear in the field of economics in recent years is that the people going into the field have become more, not less homogenous. Those studying economics at university are increasingly private school educated men. As well as gender barriers, this has been exacerbated by many public schools no longer offering economics as a subject.
Now you may wonder why the gender make of economists should matter to you, and perhaps I am being somewhat self indulgent. But economists, particularly in the public sector and academia, are very influential in advising on and developing government policy that impacts on the lives of all Australians. As well as the general benefits from diversity on having a broader pool of workers to choose from, diversity is extremely important in developing public policy – diversity of life experience impacts on the ability to understand the needs of the community and prioritise actions. The evidence shows that while technical skills are broadly the same across genders, there is a clear difference in opinions amongst economists on the basis of gender.
Male economists, on average, favour more market solutions, rather than government interventions and less redistributions of incomes. Female economists tend to favour more support for environmental protection policies and policies to reduce gender inequalities in the labour market. A diversity of views is important to successful policy making – the encompasses both gender but also socioeconomic backgrounds and life experience. These findings apply to many other fields as well – everyone wins when we embrace diversity.
Diversity is important across all levels of an organisation – from front line workers to board members. The evidence is increasingly clear that more diverse organizations perform better. There is no argument for not addressing diversity.
An important component of women’s economic participation is financial literacy. Without access to financial literacy women are not as able to participate in economic activities – particularly around savings and investment for long term goals and retirement.
On average, women typically have lower financial literacy than men, across all sorts of cohorts. This gender gap is larger compared to our global peers.
For example, recent research has shown that a large share of the gender gap in retirement savings can be attributed to the gender gap in financial literacy. Therefore, policies that improve women’s financial literacy could improve their living standards in retirement.
Historical norms around who is responsible for large financial decisions means that men typically have greater access to financial services than women. This strongly links also with why women have lower financial literacy.
Cultural or social norms implying that men have the primary decision-making role for financial decisions mean that women are less likely to improve their financial literacy. This is an area we must address.
Now many may argue that women are making choices to go into lower paid professions or work part time. We certainly don’t want to take options away from people. But what we need to realise is that women are often making these choices, which are entirely rational, because of structural issues and policies that encourage them to do so. We should be looking to address these barriers.
Women’s labour force participation remains lower than that of men's, and participation rates of mothers are particularly low. Women’s participation is low by international standards.
Women in Australia are also far more likely to work part time than men are and the reason is mainly due to childcare.
Australia has the third highest rate of women working part-time in the OECD, a group of highly economically developed countries.
Increasing part-time work contributes to vertical segregation, as women with less time in the labour market are less likely to advance to higher status positions.
So why are Australian women making different choices to our international counterparts? Australia’s current policies around parental leave entitlements, childcare and effective marginal tax rates exacerbate the motherhood penalty. It very often does not make financial sense for women to work more than three days a week, as they lose access to benefits and face higher tax rates.
Some policies may just entrench this gender difference. For example, the Government recently expanded parental leave, but the vast majority of parents who take it are women anyways. This won’t really do anything to shift social norms around how men and women divide household responsibilities and paid employment. Other countries have attempted to impose a use-it-or-lost it system whereby parental leave is allocated specifically for men and women (thereby forcing men to take it if they do not want to lose it).
One of the major economic contributors to lower labour force participation is the ‘motherhood’ penalty. Treasury analysis has shown that across the first five years of parenting their child, women’s earnings are reduced by 55 per cent on average while men’s earnings are unaffected.
To balance caring household responsibilities with paid employment, many women move into ‘family friendly’ jobs once they have children. This includes part-time jobs in lower paying occupations that require fewer rigid commitments.
The fact that women take on more caring and household responsibilities makes up a large part of the reason why they lag behind in economic empowerment (they disproportionately undertake more unpaid labour and as a result fall behind progressing in the formal economy).
Claudia Goldin (most recent Nobel Prize winner in economics – one of the very few women to have won the award) argues that much of the gender pay gap is caused by the requirement to work long and continuous hours in order to achieve career progression (‘greedy jobs’ phenomenon). Men can have access to these professions far more than women can if women continue to hold the larger burden of child care responsibilities.
So what can we do to move towards more gender equality and make some progress on closing the gender pay gap? There is plenty that can be done.
There is a role for both government and business to play in reducing the gender pay gap.
There are large gains to be had here – for women, for the economy and for the community. Not tackling the gender pay gap risks turning our back on a large, educated talent pool. This only acts to exacerbate acute skill shortages that are affecting many industries and are only going to become more acute in the future.
Increasing labour force participation and reducing occupational gender segregation can be tackled by making paid parental leave more gender equal, reducing high effective marginal tax rates for primary caregivers (typically women) and increasing access to affordable childcare.
Gender stereotypes are driving segregation in many industries. Anti-discrimination campaigns that attempt to break cultural barriers down, alongside other policies looking to reduce gender segregation by industry would open up greater opportunity for participation and reduce the gender pay gap.
Mentoring and leadership programs that strengthen the pipeline from school to university to work have shown a lot of success in highly skilled industries such as science and technology.
Access to flexible working arrangements, for both men and women, are also important in allowing people to balance their work and family responsibilities. Recent CEDA research has shown that in professions where people are able to work from home, the shift towards more flexible work has encouraged more women, and other underrepresented groups, such as those with a disability, to enter or remain in the workforce. Formalising access to flexible working arrangements, for all workers, as well as adopting best practice in hiring and promotions, leads to better diversity across the board.
There is a strong role for individual companies here. The gender pay gap data released the other week shows that companies that take this seriously and want to make a difference are successful. They take strong action, including pay audits and action plans and they are seeing results. Transparency is a critical ingredient in making progress – if you can’t see the problem you can’t address it.
We should reflect on, and celebrate, the substantial gains that women have made over recent decades, and the significant contribution that they have made and are making to our economy, our community and importantly to the sports industry. But this does not mean we should sit back and wait for progress to slowly tick along – more progress will only come with concerted effort and a continual focus on transparency and action. Thank you.