Austria’s gender pay gap is among the worst in Europe
The forthcoming Austrian Income Transparency Act, which will enter into effect by 2026, is expected to bring significant improvements.
Austria’s parliamentary elections, slated for the fall of 2024, are starting to cast their shadow, as the country’s political parties are ramping up their campaigning. For example, gender equality is back as a contentious topic in the political debate. According to the Duden dictionary, considered one of the foremost authorities on the German language, there is a wealth of possibilities for using gender-fair language in German. The problem is that there is no universally accepted standard, and many people reject gender-fair language. “Research in gender studies and linguistics clearly shows that language is not a neutral veil. Instead, language is performative, in the sense that it realizes the actions that are described through linguistic expressions,” explains Emanuel List, a researcher at the WU Research Institute for the Economics of Inequality. “Language plays a key role, and it’s instrumental both in perpetuating and in changing social norms and conditions. That’s why I think it’s good to use gender-inclusive language.”
However, the lack of visibility of feminine word forms in everyday language and the debate about whether gender-fair language should be abolished are only a secondary problem, given the above-average differences in income and wealth distribution between men and women that we see in Austria. According to EU Commission estimates, the Austrian gender pay gap amounts to 19 percent (well above the EU average of 12.7 percent). Even though improvements have been achieved in recent years and the gap has been reduced as a result, Austria is still one of the EU countries with the largest pay gap between women and men.
A variety of reasons
Is this because women are more likely to work part-time than men, or because of the fact that women earn less for the same job with the same qualifications in certain sectors? According to Alyssa Schneebaum, senior assistant professor at WU’s Department of Economics, both explanations are true: The gap arises because women often spend fewer hours at work. When calculating the gender pay gap, however, hourly pay is also factored in for comparison. Schneebaum says, “These figures show that women are more likely to work in low-paid jobs.”
Giving women more bargaining power
It is currently hard to find data illustrating the fact that women and men are paid differently for the same type of work. However, this is bound to change with the new Income Transparency Act, which will enter into effect in Austria by 2026. Under this new legislation, companies with more than 100 employees will be required to publish a gender pay gap report. This will make it easy for employees to find out how much women and men earn in comparable positions within their company. “This information will give women more bargaining power when it comes to negotiating their pay,” Schneebaum points out. Taken together, the low labor force participation rate of women and their relatively high rate of part-time employment also mean that the female labor income share in Austria is among the lowest in Europe, at around 35 percent.
As Emanuel List points out, companies, sectors, and industries where women represent a large part of the workforce typically pay less. In addition, it is also possible that there is outright discrimination against women which cannot be explained by factors like education or similar characteristics. “It’s also worth pointing out that the child penalty in Austria is relatively high. This means that having a child has a very negative impact on the careers and income levels of women in Austria. This can lead to poverty in old age and increase women’s financial dependence on their partners,” List explains.
Who does the unpaid work?
This is intrinsically linked to the issue of unpaid work. The question is: Who does the unpaid work, and how much of it? Alyssa Schneebaum has the answer: “It’s well known that women do two thirds of all the unpaid work. Men spend more time with their children once they’re older, for example. For them, it’s more about playing games together than staying at home when the child is sick. A study by the Austrian Chamber of Labor found that a disproportionately high number of men go on parental leave during the summer months.” Women also did much more unpaid work during the COVID-19 pandemic. They stepped out of the labor market to look after their children, for example taking care of homeschooling.
It is a balancing act for the government to try to achieve a fairer distribution of roles between the genders while at the same time avoiding to interfere too much in the private family lives of the citizens. The new Income Transparency Act mentioned above gives cause for hope. The gender pay gap has a lot to do with social norms: What roles are ascribed to women and what roles are ascribed to men? Women often take lower-paid jobs because society still sees it as their responsibility to look after their children. Men, on the other hand, spend most of their lives doing paid work because that is their traditional role. These norms are slow to change. “But this is exactly where we need to focus our efforts to bring about a change. We need more women in mathematically and technically oriented jobs, and more men should work as kindergarten teachers,” says WU researcher Alyssa Schneebaum.