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Labour market participation of women in small EU states

One of the goals of the Europe 2020 Employment Strategy is to increase the overall employment rates across member states to compensate for the predicted decline in Europe’s workforce due to demographic changes.

Small states were found to have a higher labour market participation of women with a tertiary level of education
- Lily Said

It is widely recognised that increasing the female labour force participation is key to achieving higher overall employment rates in the European Union. Women’s participation in the labour market has obvious positive implications for the economic welfare and growth of a state. However, women are more likely than men to be outside the labour force in all the member states.

A comparative analysis has been carried out of the participation of women in the labour market of five small states, namely Estonia, Cyprus, Luxembourg, Malta and Slovenia, and how they compare to large member states for the period 2004 to 2011. For the purpose of this desk research, the 27 EU member states were divided into two groups: the five small member states group and the 22 large member states group. Population size was used as the criterion to distinguish states.

Significant differences exist in the participation of women in the labour market throughout the EU. In 2011, countries like Denmark (76.1 per cent), the Netherlands (73.1), and Sweden (77.7), classified in this study as large member states, had the highest woman participation rates among the other larger states. On the other hand, among the small states, Estonia had the highest woman particip-ation rate at 71.5 per cent that compared well with that of the large member states. Malta had the lowest woman participation rate among the EU member states at 44.1 per cent in 2011 (Eurostat, 2012).

Several factors affect the level, pattern and trend of women’s participation in the labour market, such as demographic characteristics, education, religion, culture and the social context. A review of the existing literature indicates that in all the five small member states, the traditional gender arrangement still prevails and reflects on the welfare regimes and equality policies that tend to hinder women’s advancement in the labour market. Demographics, religious values and culture are difficult to change through deliberate policy, so education is the prime policy option to a greater participation of women in the labour force.

The positive development in the active population in the EU 27 is largely due to the increased participation of women in the labour market. In spite of the financial and economic crisis which hit most member states mid-2008, the inactivity rate of women maintained the downward trend seen in previous years. This positive was further illustrated in the individual progress of each small member state where the gender gap in the activity rates decreased between 2004 and 2011.

However, the differences in gender vary greatly across the small states. The pattern is similar in the two Central and Eastern European countries but varies greatly in the two Mediterranean islands. The gender gap is small in Estonia and Slovenia and slightly more pronounced in Cyprus and Luxembourg.

The disparity in the gender activity rates in Malta is unlike any other small state. Although there was an increase in the participation of women between 2004 and 2011, the difference in gender is still significant in Malta. This may be the result of attitud-inal factors related to educational levels, religion and culture, compatibility between housework and market work, and society’s view of a woman’s role as home-maker and mother.

Data analysis between 2004 and 2011 shows the advancement of women in the labour market and the positive effect of education on the woman labour force in the small states. The results indicate that the participation of women in the labour market of the small member states is increasing faster than that of men. The analysis also reveals that the participation of women in the small states is higher than that of women in the large member states, although it is not increasing faster than that of the large member states, due to the decline in the activity rates in the last couple of years.

This may indicate that small states are more easily affected by the dynamics of the international global markets than other groups of countries. Moreover, the results show that a higher education level is related to a higher participation rate of women in both small and large states. Additionally, the small states were found to have a higher labour market participation of women with a tertiary level of education when compared to the large states, which further indicates the positive trends in the labour market of the small states.

The educational level is evid-ently another determining factor on the participation of women in the labour market. The highest participation rate is among women who attained a tertiary level of education. By contrast, the particip-ation of women with a lower secondary level of education is very low. This may be a self-selection effect. Women with a low level of education and poor income prospects show a lesser tendency to join or rejoin the gainful employment sector.

The level of education of women of working age, from 15 to 64, has a significant effect on the female labour force of each small state. Estonia, Cyprus, Slovenia and Luxembourg have higher percentages of women of working age who attained a higher level of educ-ation, which appears to be related to their higher female participation rates. By contrast, Malta has a high percentage of women of working age with low educational level attainment that also appears to be related to the low participation rate of women in the labour market.

Given the large number of women of working age with a low level of education, especially in Malta, it implies the need for stronger policy measures to address early school-leaving to boost school completion. A higher level of education increases employability and labour success.

Measures to increase the share of young women holding upper secondary and tertiary education qualifications could lead to a more competitive female labour force.

This article is a summary of the findings of Ms Said’s dissertation for an MA (Islands and Small States Studies) from the University of Malta.

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