UK falls down the gender equality ranking

The UK has fallen five places in an annual gender equality index of OECD countries, moving from 9th to 14th place, due to a widening gender pay gap.

According to the PwC index, the UK saw a significant widening of the gender pay gap by 2.4 percentage points to 14.4% in 2021 – four times the average increase across the OECD as a whole. Combined with a slight fall in the female labour force participation rate, the UK’s absolute index score declined by two points in 2021.

PwC says the UK’s progress towards gender pay parity has been in reverse since the pandemic and the UK female labour force participation rate fell 0.4 percentage points between 2020 and 2021.

The report also highlights childcare affordability issues for families in the UK. In 2021, childcare costs relative to average income were one of the highest across OECD countries. Net childcare costs represented almost a third of the income of a family on the average UK wage, it says. This compares to as little as 1% of income in Germany.

PwC says that, since 2015, childcare costs in the UK have risen dramatically, while income growth has slowed. Average nursery costs per week rose by more than 20% between 2015 and 2022, while average weekly earnings rose by 14% (both in nominal terms).

Larice Stielow, senior economist at PwC, says: “The motherhood penalty is now the most significant driver of the gender pay gap and, in the UK, women are being hit even harder by the rising cost of living and increasing cost of childcare.  With this and the gap in free childcare provision between ages 1 and 3, more women are being priced out of work.  For many it is more affordable to leave work than remain in employment and pay for childcare, especially for families at lower income levels.”

The report also looks at parental leave and says the UK has one of the lowest statutory paternity pay rates in Europe.  PwC’s analysis suggests that, as a result of fathers taking more paternity leave, an additional 720,000 women in the UK could remain in full-time employment (over a 20-year period). And it estimates that the incidence of postpartum depression would fall – with an estimated  230,000 mothers and 240,000 fathers no longer suffering over the analysis period, which, the report says, could save the NHS around £1.4 billion.

It adds that, as a result of fathers spending more time with their children in their early years, around 66,000 children every year (10% of births) could attain better educational outcomes –  scoring one grade higher in either Mathematics or English at GCSE once they reach high school age. This is also estimated to lead to an increase in their lifetime earnings of £330m.

When it comes to the regional breakdown on gender parity, the report finds that Northern Ireland ranks first among the countries and regions in the UK, overtaking the South West which has been the top-performing region for three years consecutively up until this year. The South West now drops into second place, while Scotland remains third (unchanged from last year).

Northern Ireland boasts the smallest gender pay gap across the countries and regions (only 5%), and a higher female full-time employment rate than most (the third best across the UK at 64%). However, it has the lowest female labour force participation rate (70%) of all countries and regions in the UK.

Wales saw the largest decrease in terms of absolute Index score as well as the largest fall in rank between 2020 and 2021. Wales fell from second place to sixth place. This was due to marginal deterioration seen across the majority of indicators.

Meanwhile, the UK government has hired a recruitment expert to improve support at work for women going through the menopause. Helen Tomlinson, head of talent at HR giant Adecco, was announced yesterday as the first Menopause Employment Champion. Her voluntary role will involve encouraging bosses to help female staff going through the menopause and so stop them leaving the workforce early.

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