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Gender equality and Sweden - Dennis Avorin

As was highlighted in this newspaper (November 4), Malta has a long way to go in order to advance women’s careers on the island. I know the situation very well, as I grew up in one of the EU Member States on the other side of the scale, Sweden.

Although Sweden in many cases is doing an extraordinary job in advancing women’s careers, there are also some pitfalls to look out for. If Malta manages to balance its policy approach accordingly, there are many gains to be made for men and women alike.

When it comes to Sweden, first of all, one needs to keep in mind that the gender outcome on the labour market is not only due to the welfare state.

All Nordic countries are doing well in gender equality, and have always done so, long before the welfare state. When Sweden adopted its famous parental leave system in 1974, the female labour force participation rate was already 50 per cent, a rate that Malta has just recently climbed above.

Malta has done well in introducing public childcare. This is by far the most important policy measure to put in place in order to increase the female labour force participation rate. The Maltese policy is even more generous than the Swedish in this regard, as in Sweden parents still has to pay a monthly fee to access public childcare.

The next Maltese reform should look at introducing a paid parental leave policy beyond the four months of maternity leave. Here, Malta needs to be cautious. It is easy to think that the more generous the policy, the better. It is certainly a way to win elections.

However, most international research points to the fact that paid parental leave longer than 12 months is actually detrimental to women’s careers. The optimal length of a paid parental leave system is somewhere between nine and 12 months, whereas in Sweden it is over 15 months, which is clearly too long.

Be wise and do not try to imitate the Scandinavian system of parental leave that has proven to be too long

Studies have shown that when parental leave is too long, women are negatively affected in three ways.

First of all, they are directly affected by decreasing wages compared to men of the same age. Secondly, by losing out on work experience and thus a decrease in female human capital. This effect is especially strong for highly educated mothers.

Third, if parental leave is too long, women are indirectly affected by employers’ suspicion that women of fertile age will take up positions just to go on long parental leave, thus increasing labour market discrimination against women, even those who do not choose to bear children.

Therefore, be wise and do not try to imitate the Scandinavian system of parental leave that has proven to be too long. While introducing a parental leave system raises public spending, the increasing female labour participation rate will bring down the net cost by providing for additional tax revenues.

Other reforms that have proven pivotal for advancing women’s careers have been very thoroughly mapped out in the book The Nordic Gender Equality Paradox written by Nima Sanandaji.

Every country has its particularities when it comes to advancing women’s careers. There is no one-size-fits-all. Some additional reforms that could advance the situation in Malta include, for instance, moving further towards an individualised tax system, rather than taxing married couples together.

Additionally, one important reason for higher wages among men is that men are more likely to work in the private sector while women usually take up jobs in the less-paid public sector. Encouraging women through various forms of education incentives to join sectors, which are traditionally male, is therefore a good idea.

While Malta has among the highest gender earnings gap when adjusted for all the Maltese women who are outside of the labour force, one should also remember that the unadjusted earnings gap in Malta is among the lowest in Europe with approximately 10 per cent difference between men and women, while a country like Sweden has almost 20 per cent difference in wages between men and women.

Malta’s road forward is therefore not primarily about raising women’s salaries, but about getting more women to join the labour force.

Dennis Avorin is a Swedish-born professional policy analyst resident in Malta.

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