The Nobel Prize 2023 in Economic Sciences for having advanced understanding of women’s labour market outcomes raises some key concerns about the ongoing inequality in workplaces. Many industry veterans believe lack of adequate women in top management positions is a key reason for this.
Claudia Goldin’s Nobel Prize raises some key questions on the state of women workers across the world. One of the driving factors behind Claudia Goldin’s Nobel Prize 2023 in Economic Sciences was, ‘advancing the understanding of women’s labour market outcomes,’ as per the Nobel Committee. That highlights a very interesting and a rather worrying trend globally. Workplace equality and bridging the gender gap in most countries is still far from reality.
According to the report by the Nobel Committee, women are severely underrepresented in the global labour market: around 50 per cent of women work or actively seek work for income, compared to 80 per cent for men. The gender differences in participation are fundamentally driven by variation in women’s participation rates – men’s participation rates are broadly constant across time and countries. The participation gaps between men and women are particularly large in South Asia, the Middle East, and North Africa, where they sometimes exceed 50 percentage points.
If you look at it in the Indian context, “Sadly, gender pay gap only shows the overall inequality between men and women. Things in India are no different – an IIM study found that senior women executives earn 85 per cent of their male counterparts in the same position. Some companies are making deliberate efforts at fixing this, but this is not the norm,” points out Mahua Acharya, Carbon markets and climate professional with CQuest Capital and former CEO of CESL.
In fact according to this above mentioned IIM study, The gender pay gap can vary widely across sectors and companies. But on average, the study estimated, women in India earn only Rs 85 for Rs 100 that men in the same position earn, especially in senior managerial positions. Interestingly this gap tends to widen as the seniority grows. Lack of adequate women in top management positions is considered as one of the primary reasons for this widening gap. The IIM Study too refers to this anomaly.
According to Manu Saigal, Director – General Staffing at Adecco India, in a column written on Financial Express Online, “Ensuring women have a seat at the decision-making table is vital. Diverse leadership teams are more likely to implement policies and practices that promote gender equality. Encouraging women to take on leadership roles and participate in strategic planning fosters a more inclusive workplace.”
It is common knowledge that gender gaps in earnings and the “glass ceiling” in promotions is a concern globally but the question as rightly posed by the Nobel Committee is, “Why are labor market gender gaps so pervasive around the world today? What explains the variation in the size of these gaps over time and across countries? Is the extent of gender equality primarily a reflection of economic development? Why do gender earnings gaps remain in high-income countries, despite, for example, women being more educated and the adoption of equal pay legislation?”
Saigal offers a key perspective when she highlights how, “Many women in the workforce struggle to balance their careers and family responsibilities. Offering flexible work options, such as remote work or flexible hours, empowers women to advance their careers while managing family commitments. This approach promotes work-life balance, retains talented women, and narrows the gender pay gap.”
Experts believe reducing the gender gap in employment and improving the allocation of talent across genders could boost global GDP significantly. The question that continues to bother is how to achieve the end goal despite the awareness being much higher globally now. There is need to make role allocation in workplaces gender agnostic and based on talent and root out inefficiencies emerging from inequality based on gender.