Financial Literacy

Pay inequality: a look at the gender pay gap in 10 countries around the world

By: Staff on March 6, 2020
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This article has been updated from a previous version.

Another International Women’s Day is upon us. 

This year’s theme? I am Generation Equality: Realizing Women’s Rights.

We can’t talk about equality without, of course, talking about money — more specifically, how much of it women are earning for doing the same jobs as men.

The thing is, there’s still an earnings gap between men and women in many countries around the world, and while there are many factors that contribute to it, the exact cause is hard to pin down. For example, it’s believed that women are less likely to negotiate their salaries, but studies show that even when they do negotiate, they’re less likely to get the raise they ask for.

One solution to closing the gender pay gap that’s gained a lot of traction in recent years is pay transparency in the workplace, which many believe would render pay inequality obsolete since it would effectively make it impossible for employers to justify paying women less than men. And as a result, they’d have little choice but to pay women equally for equal work.

Some consider that a fix. Others don’t. But one thing’s for sure: the gender wage gap is persistent. If we want to work to close it, it’s important we don’t lose sight of what we’re dealing with — not just here in Canada but globally, as well. 

Gender pay gap by country

On this International Women’s Day, we’re calling attention to the gender pay gap in 10 countries from around the world. We’ve highlighted a range of countries on this list — some have made little progress towards pay equity while others give the rest of us something to strive towards. We’ve also tried to highlight why some countries are doing better or worse than others.

It’s important to keep in mind that a country’s gender pay gap is a finicky number to try and pin down, and depending on the source, the percentage can fluctuate. We’ve done our best to collect the most recent gender wage gap statistics for each country, but these numbers could vary.

Canada: 13.3% 

In 2018, Canadian women were paid $4.13 less in hourly wages than their male counterparts, or 13.3%, according to Statistics Canada. This is a slight improvement from where women’s wages were in 1998 when they were paid $5.17 less per hour than their male counterparts. 

Another positive development in 2018 was when the Liberals, led by Prime Minister Justin Trudeau, announced a pay equity bill for federally regulated businesses “designed to ensure that women and men receive equal pay for work of equal value.” That covers about 910,000 employees working in the banking, transportation, border security, telecommunications and broadcasting industries, and more. 

At the same time, it raises questions about why Canada isn’t making more progress in closing the gender pay gap.

The gradual narrowing of the divide can be partially explained by the fact that more women than men hold university degrees — and also because highly paid unionized jobs for men have become scarcer. But not enough has changed since 1998: women are underrepresented in some industries and overrepresented in others, namely part-time work in the service industries.

Even StatCan concedes that there are “unobservable factors” factors at play, “such as any gender-related biases.” Only 39% of Canadian companies had accurate data on gender pay differences. Basically, very few organizations are making serious efforts to track it. 

How long will it take to close Canada’s pay gap? Global News obtained a shadow report produced by more than 50 non-governmental organizations that estimate it will take 164 years.

Iceland is a female powerhouse. Women make up 43% of board of directors positions; half the seats in parliament are filled by women; it was the world’s first country to elect a female president, and it also has a female prime minister

New Zealand: 9.3%

The gender pay gap in New Zealand was 9.3% in 2019, a number that has remained unchanged since 2017, according to Statistics New Zealand. 

In fact, the World Economic Forum (WEF) placed New Zealand sixth out of 153 for countries with the best overall gender parity in its 2020 Global Gender Gap Report, which measures across four sub-indexes: Economic Participation, Educational Attainment, Health and Survival and Political Empowerment. 

In 1998, when the country started tracking wages, the pay gap was 16.2%. 

Jacinda Ardern, the country’s outspoken feminist prime minister, has only one year left to meet her goal of achieving total pay equity for female public service workers by 2021, a target she set shortly after taking office in 2017. Ardern’s hope remains that tackling issues in the public sector will instigate change in the wider economy. 

Ardern has also embarked on fixing the private sector. In April of this year, New Zealand will raise the minimum wage by just over one dollar, to about C$15, an acknowledgment that one of the reasons for the pay gap is the fact that women are overrepresented in minimum-wage jobs. 

New Zealand has a long track record of being progressive on gender equality issues. In 1893, it was the first self-governing country to give women the vote. Still, even when a country’s top leader is highly motivated to create change, the pay gap remains a stubborn issue.

Iceland: 12.2%

Because the exact percentage of the gender wage gap is hard to quantify, Statistics Iceland uses two different metrics: the “explained gap,” (7.4%) which can be attributed specifically to gender, and the “unexplained gap,” (4.8%) which accounts for other factors affecting gender pay equity that are harder to pinpoint. Both of these figures represent the gap between 2008 and 2016.

According to the WEF’s 2020 Global Gender Gap Report, Iceland is “the most gender-equal country in the world.” Indeed, Iceland is a female powerhouse. Women make up 43% of board of directors positions; half the seats in Iceland’s parliament are filled by women; it was the world’s first country to elect a female president, and today, it also has a female prime minister.

The pay gap for Dutch women increases the more highly educated the employee is

In 2018, Iceland enacted legislation that requires companies with 25 or more employees to secure equal pay certification on an annual basis. This is designed to ensure that jobs of equal value are compensated equally, regardless of the gender of the person who holds them. With this, the country holds companies accountable to prove they’re paying men and women fairly, and failure to do so can mean daily fines for companies.

Iceland’s commitment to gender pay equity isn’t new. The Nordic island nation has had an equal pay act since 1961, and, on October 24, 1975, 90% of the country’s women went on strike. They refused to work — both inside the home and at their professional jobs. Men had to look after the children. Factories shut down, as did schools. Flights were cancelled, and executives had to work at bank branches. It became known in the country as the “Women’s Day Off.” Similar demonstrations have continued throughout the years, too.

Russia: 25%

Women in Russia earn about 75% of what men earn, according to the latest data from the International Labour Organization. 

While there’s not just one thing we can attribute this to, Russia is a country in which traditional gender roles are still fairly revered. Case in point: on a past International Women’s Day, the government posted a photo of male soldiers surrounded by ballerinas despite the fact that, according to the Associated Press, there are 45,000 women who serve in the country’s military. A congratulatory note from the army office accompanied the image: “The men’s power lies in women’s tenderness and love!”

Occupational segregation by gender, while Russia was still part of the Soviet Union, might be to blame for the wage gap, as women were largely concentrated in sectors like education and healthcare, whereas men were concentrated in industries like mining, engineering, and construction. Soviet Russia also used a centralized wage system, where earnings were determined largely by how productive, socially useful, and laborious people perceived a sector to be. Manufacturing, for instance, would have been seen as superior to office jobs and services, resulting in women earning less than men.

In Russia, women make up only 7% of board of directors positions. It’s also worth noting that Russia has never had a female head of state.

Netherlands: 8.8%

Unfortunately for Dutch women, the pay gap in the Netherlands is steadily increasing. According to the latest information available from the International Labour Organization, the gender pay gap is 8.8%.

“The annual difference in salary is 5000 euros on average, which means that women are working three weeks a year for free,” the Dutch Review reported last November.

Again, gender pay gap figures vary depending on the source. For instance, the Review points to a biannual study by the Intermediair National Salary Survey and Nyenrode Business University that shows women under the age of 36 are earning substantially less compared to men (6.4%) than they were two years ago. For women 36 and older, the gap is pretty much the same as it was two years ago, at 8.9%.

The gender wage gap in Pakistan sits at 34% — among the highest in the world and double the global average

“The reason 36 is the cut-off point for this comparison is that once women have children, their salary decreases even more when compared to men’s,” Ailish Lalor wrote in the Review article.

One of the more shocking findings to come out of the Intermediair study was that the pay gap for Dutch women increases the more highly educated the employee is.

In March 2019, a new bill on equal pay was introduced in the Lower House of the Netherlands government. The obligations included in the bill would make it compulsory for companies with 50 or more employees to reduce the differences in wages between men and women. The bill still needs to be debated, but it appears to be a step in the right direction when it comes to narrowing the country’s gender pay gap. 

Finland: 16%

Considering Finland is one of the world’s most gender-equal countries, coupled with a high female workforce-participation rate of 75%, according to the WEF, it comes as a surprise that the narrowing of the gender wage gap has slowed in recent years. Women were paid 84 cents for every euro paid to men in 2018, according to Statistics Finland.

A big main contributor to the gap is that the majority of occupations in Finland are gendered. In most cases, jobs that are considered for men are higher paying than those for women. Another reason is women still carry the larger burden for caring for the home and children, so men tend to put in more paid hours outside of the home than women.

When Business Insider ranked 12 Organization for Economic Cooperation and Development (OECD) member countries with the biggest gender pay gaps from best to worst (one being the worst), Mexico and Finland tied at number eight. While Finland isn’t the worst case, it’s interesting that Mexican and Finnish women fare about the same from a gender pay-gap perspective. This is notable, considering The World Bank classifies Finland as “high income” and Mexico as “upper middle income.”

When looking at other aspects of the gender gap, not just pay, Finland does very well. According to the WEF, it’s the only top-ranked Nordic nation to fully close the gender gap in educational attainment. Women also make up 47% of Finland’s parliament and 37.5% of its ministers. At the end of 2019, Sanna Marin was appointed as the country’s third female prime minister and the world’s youngest sitting head of government at age 34. 

Finland played “a pioneering role in bringing about gender equality, becoming the second country to grant women the right to vote and, in 1906, was the first to award women full political rights.”

United States: 18%

In the United States, the gender pay gap gets a lot of media attention. For example, the U.S. women’s soccer team notoriously filed a gender discrimination lawsuit against U.S. Soccer that claimed they were subjected to unequal working conditions and unequal pay. A judge granted the players class status, acknowledging there was enough evidence of discrimination. Some considered this decision a big victory because it validated their long fight for equal pay.

Over the years, America’s gender pay gap has steadily narrowed, but there’s still a lot of work to be done. For instance, 2018 data from the American Association of University Women shows that women earn 82 cents for every dollar men earn, giving us a gap of 18%.

Saudi Arabia consistently ranks near the bottom for its progress toward gender equality across a multitude of metrics

The gap widens, however, when higher education is introduced into the equation. 2019 data from the U.S. Census Bureau show that among American workers holding a bachelor’s degree, women make 74 cents for every dollar men make, for a pay gap of 26%.

And the gap gets even wider when broken down by race, with Native American, Black, and Hispanic women most adversely affected, typically earning 26% less than their white male counterparts, according to a 2019 PayScale report.

The gap in pay also varies widely based on the state someone lives in.Business Insider article pegs the gender pay gap in Louisiana at 31.2% — the biggest in the country. California, on the other hand, has the smallest pay gap at 10.9%.

Pakistan: 34%

According to the latest Global Wage Report issued for the 2018/2019 year by the International Labour Organization, the gender wage gap in Pakistan sits at 34% — among the highest in the world and double the global average. 

Of the 73 countries surveyed for the production of the report, Pakistan had the highest overall hourly average gender pay gap. Furthermore, the report finds women to account for almost 90% of the bottom 1% of wage earners in Pakistan. 

Pakistan has historically ranked low across a number of gender equity metrics, though it has seen modest improvements in recent years. A 2020 report released by the World Economic Forum that takes stock of the state of gender equality around the world ranked Pakistan 151st out of 153 countries included in the report.

While women comprise more than half of Pakistan’s population, the WEF report reveals that only 25% are part of the labour force, though they’re largely in low-pay positions with minimal legal protection. While the country still has a long way to go, some progress has been made. Pakistani women are more likely to participate in the labour force than their mothers and grandmothers were, and about one-fifth of parliamentary seats are held by women. 

Rwanda: 12%

Women in Rwanda earn $0.88 on the dollar for every dollar men earn, setting the gender pay gap at just 12%. Rwanda has made great strides towards achieving gender parity over the past several years, beating out the United States, France, Denmark, and the U.K. in the WEF’s 2020 Global Gender Gap Report.

In addition to pay equity, the country has one of the highest rates of female participation in the labour market anywhere in the world at about 85%, according to WEF’s report. For comparison’s sake, that figure sits at 67% in the United States. It’s important to note, however, that the country’s high rate of female workforce participation is partially due to necessity. After the country’s devastating genocide two decades ago, many women were forced to enter the workforce to fill the roles once occupied by men.

Finland is the only top-ranked Nordic nation to fully close the gender gap in educational attainment

WEF also notes that while many women also entered the workforce in the United States after the Second World War, Rwanda reacted differently in one key area that’s kept women in the workforce — they implemented policies to help them keep working. For example, women in Rwanda currently enjoy three months of fully paid maternity leave.

While these are great accomplishments, it’s important to keep in mind that Rwanda still has a long way to go towards achieving gender parity. Namely, it’s estimated that at least two in five (41.2%) Rwandan girls will experience physical violence by the age of 15. Women’s literacy rates in Rwanda (65%) remain lower than men’s (72%), and women remain responsible for the majority of unpaid housework and childcare.

Saudi Arabia: about 50%

While the exact percentage of the gender pay gap in Saudi Arabia remains unclear, one thing’s for sure: it’s large.

The most recent number cited by the Saudi Gazette is 56%, which it attributes to the Shura Council (sometimes spelled Shoura Council), an advisory body also known as the Consultative Assembly of Saudi Arabia that has no executive power; only the ability to recommend laws to Saudi Arabia’s king.

Arab News has also reported the 56% figure. A 2018 article quoted one councilwoman as stating that the private sector needs to conform to the pay equity standards of the public sector.

Saudi Arabia consistently ranks near the bottom for its progress toward gender equality across a multitude of metrics. In the WEF’s 2020 Global Gender Gap Report, for instance, Saudi Arabia ranked 146th out of 153 countries included. This represents a drop of more than 30 rankings (from 114th) from its 2006 position.

Saudi Arabia is historically known for its restrictive policies towards women, adequately represented by the fact that women were not legally allowed to be issued drivers’ licences in the country until 2018. In Saudi Arabia today, only 16% of the labour force is made up of women, according to the WEF report.