Empowering women in the EU and beyond : economic and financial resources

Empowering women in the EU and beyond:

Economic and financial resources

Ensuring that women have equal access to economic and financial resources and benefit equally from economic opportunities and growth has been recognised as a vital contribution towards gender equality, poverty eradication and sustainable development. This principle is embedded in numerous international instruments, including the current UN Sustainable Development Goals (SDGs) which are binding on the EU and its Member States. The first report from a new United Nation (UN) high-level panel, created to find concrete ways of implementing the SDGs related to women’s economic empowerment, has identified a number of interconnected areas where action is needed. One priority is to ensure that women have access to and control over finances and assets, both for their economic security and for building wealth. Other priorities include: securing decent jobs and equal pay and creating an enabling environment by investing in public services and infrastructure (including child and elderly care); changing business practices and discriminatory laws; and developing gender-sensitive (macro)economic and social policies. Women’s participation in economic decision-making through leadership and collective action is also vital to allow equal opportunities to shape economic structures. Measures must therefore address factors linked to women’s experiences and to the wider structural conditions that determine them, particularly the value given to women’s unpaid work.

Global performance ranks differently, but gender gaps in income, earnings, financial inclusion, wealth, poverty and economic leadership remain evident across the EU. The index developed by the European Institute for Gender Equality (EIGE) shows that EU women’s access to financial and economic resources, measured with a ‘score’ remains lower than men’s (with a score of 68.9 out of 100 in this domain in 2005, falling to 67.8 in 2012). EIGE finds that women have less income available for spending

or saving (mean equivalised disposable income) and

that this gender gap has widened since 2005. Women’s working patterns have a negative impact on their overall earnings. At 39.9  %, the gender overall earnings gap, which reflects the fact that women in Europe are more likely to work part-time than men, is far higher than the gender pay gap of 16.7  %. Women’s wages also tend to fall when they have a child (motherhood penalty), whilst fathers’ wages rise. At 40 %, the gender pension

gap captures how inequalities in income accumulate

through the life-cycle into old age. In all Member States, a woman’s average pension income is currently lower than a man’s, leaving women aged over 65 at substantially higher risk of poverty than their male counterparts.

N/A N/A N/A ROBG LV HULT HREL PL SK PT EE CZES SI IT CY MTIE UK NLFI BE FR DE DKSE AT LU 29.2 21.5 20.8 19.9 19.9 19.6 19.3 19.1 19.1 17.3 17.3 16.5 15.1 15.0 14.9 14.4 11.3 10.1 10.1 10.0 9.9 8.8 8.1 8.1 7.9 7.7 6.7 4.2

Million Purchasing Power Standard (PPS)

Median equivalised net income (2015) Variation of gender gap 2005 vs 2015

Increase Decrease

EPRS | European Parliamentary Research Service

EUI | European University Institute

Authors: Rosamund Shreeves and Giulio Sabbati, Members’ Research Service Caterina Francesca Guidi , GlobalStat | EUI PE 599.306

This briefing is part of a series ‘Empowering women in the EU and beyond’. The others cover education and reproductive health, leadership and conflict resolution and labour market.

Briefing

March 2017

FR SE FI IT NL LV UK DE DK BE SI EU-28 HR PL AT ES BG IE SK PT LU LT HU CY RO EL CZ EE MT 5 % 8 % ₉ % 9 % 10 % 11 % 11 % 13 % 13 % 14 % 14 % 16 % 18 % 20 % 20 % 20 % 22 % 23 % 24 % 27 % 27 % 27 % 27 % 28 % 28 % 30 % 30 % ₃₆ % ₃₇ %

Manager roles

The European Commission analysed 613 of the EU’s largest publicly listed companies. Some 5 % of the women working in such companies are chief executive officers (CEOs), 7 % are presidents (the chairperson of the highest decision-making body in each company) and 23 % are board members. In the EU, women holding mangerial roles acount for 26.5 % of all managers.

0 % 50 % 100 % Board members Board chairs CEO 5 % 7 % 23 %

% of total largest publicly listed companies (2016)

Self employed persons

Without employees With employees2.3 7.5 14.2 6.4 21.7 8.7 ES PL PT LULT LV HR HUEL IT EU28SK BESI EE DE BGAT RONL UKFR FI DKIE SE CZ CY MT 16.5% 21.5% 22.8% 22.9% 23.0% 23.8% 24.8% 25.0% 25.3% 25.5% 25.5% 25.5% 25.6% 25.7% 25.9% 26.0% 26.3% 26.4% 26.5% 26.5% 27.0% 27.6% 28.8% 29.0% 29.2% 29.5% 29.6% 29.7% 29.9% 1 2 39 36 19 21 24 273 172 78 24 46 27 439 6 8 50 19 2 305 360 65 57 23 11 9 3 60 180 254 % of self-employed females in 1 000 Million persons (2015)

Self-employed women with employees

1 000 women % of self-employed with employees

In the EU, there are 21.7 million self-employed persons and 29 % of them have employees. There are 2.3 million women with their own business and employees, representing 26.5 % of the total for men and women. Females Males MTAT NLEL FR DECY PL PT LUBE HUCZ BG UKLT EU-28DK LV EE SKSI IE IT FI SE ES ROHR 47.9 %57.6 % 47.3 % 46.3 % 43.3 % 42.5 % 37.7 % 37.6 % 37.5 % 36.3 % 35.5 % 35.1 % 34.9 % 34.6 % 33.4 % 33.2 % 32.6 % 31.7 % 31.6 % 31.5 % 30.7 % 30.5 % 29.7 % 28.6 % 27.9 % 27.2 % 24.3 % 24.0 % 21.1 %

Borrowing money

Reason

% of population age 15 or over (2014)

Females

Males

Females

Males

% of population age 15 or over (2014)

To start a business For education or school fees

For old age 29.4 %

15.8 % 16.0 % 31.8 % 4.5 % 9.3 % F M

Reason

At EU level, men (62 %) tend to save more money than women (59 %). The biggest difference between the genders, measured in percentage points, is in Spain (16 p.p.), Italy (15 p.p.) and Poland (12 p.p.). Men (38 %) tend to borrow more than women (34.9 %) . In 18 Member States there are more men borrowing money than women.

EL BG RO HUCY PLLV IT PT EELT HR EU-28ES CZSI FRIE SK MTUK BE NLFI DKLU DESE AT 84.2 % 83.5 % 79.4 % 79.2 % 78.4 % 73.7 % 71.8 % 70.7 % 69.8 % 66.9 % 66.7 % 64.5 % 64.1 % 62.0 % 59.9 % 59.4 % 58.6 % 55.0 % 53.9 % 53.4 % 52.7 % 49.2 % 44.9 % 41.0 % 39.7 % 36.8 % 34.3 % 25.1 % 21.6 %

Saving money

Women holders of agricultural land

The world map shows the share of farm enterprises run by women, who may but do not necessarily own the land and resources. It captures much but not all of women’s on-farm managerial responsibilities, since women may be responsible for running aspects of family farms without being recognised officially as managers. In the EU and globally, interlinked gender differences mean that female-headed farms tend to be smaller. At the same time, having less land correlates with having less access to labour, financial services and technology, which obstructs further expansion and illustrates how constraints can impede women’s economic potential and wider improvements to well-being.

< 10 % 10 % - 20 % 19.9 % - 30 % > 30 %

The gender overall earnings gap is the difference between the average annual earnings between women and men. It measures the impact that the average hourly earnings, the monthly average of the number of hours paid and the employment rate have on the average earnings of all women of working age compared to men.

The EU average (39.7 %) means that women’s annual earnings are approximately 40 % lower than men’s. In other words, for every 100 euros earned by a man, a woman earns €60. Among the Member States, the indicators range between 19.2 % in Lithuania and 47.5 % in the Netherlands.

% of total farm enterprises

People at risk of poverty or social exclusion

The Europe 2020 target is to have at least 20 million fewer people in or at risk of poverty and social exclusion. This target refers to the EU-27, that is, all EU Member States before Croatia’s accession. It was adopted in 2010, taking 2008 as a baseline year since it was the most recent one for which data was available. In 2008, 116 million people, or 23.7 % of the EU population, were at risk of poverty and social exclusion. In 2015, the equivalent figure was 118 million (23.7 % of the population). To reach the 2020 target, the number of people at risk of poverty or social exclusion should be brought down to 96 million, or 18.9 % of the EU population. The risk of poverty for people above 65 years of age stands at 17.4 % and for younger people at 25.2 %; the gap between women and men above 65 years of age (5 percentage points) is five times bigger than between their younger counterparts. The biggest gap is in EE, while the highest risk for the female population exists in BG.

58.0 % 47.3 % 44.7 % 41.0 % 38.5 % 34.4 % 25.5 % 24.7 % 24.3 % 24.2 % 24.0 % 23.8 % 22.4 % 19.6 % 19.5 % 19.3 % 19.1 % 18.7 % 18.3 % 17.4 % 17.0 % 15.8 % 14.8 % 14.4 % 14.4 % 10.7 % 10.4 % 9.5 % 6.2 % Gender gap % of total

population 15.2 16.1 22.8 14.8 12.7 6.2 12.9 4.3 6.1 1.1 6.9 12.0 5.7 5.0 6.4 6.0 4.0 2.1 8.8 2.0 1.8 4.2 2.6 8.3 4.1 1.7 2.6 2.9 0.4 0 20 40 60 NL LUFR DKSK CZES AT BEIE FI UK DEPL HU EU28IT SE CY MTPT ELSI HR ROLT EE LV BG 0 25 50 75 100 125 2015 2014 2013 2012 2011 2010 F M < 65 > 65 Europe 2020 target: 96 million people Age 12 % 19 % 26 % > 65 years < 65 years F: 25.7 % F: 19.6 % M: 24.7 % M: 14.6 %

Million persons % of total population (2015)

Gender overall earnings gap

19.2 % 25 % 30 % 35 % 45 %47.5 %

39.7 %

GENDER OVERALL EARNINGS GAP

For every € 100 men earn, women earn € 60 (2015)

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Boosting economic equality and creating opportunities for women

Analysis shows that wealth (that is, the value of assets, such as investments, savings and property, minus debt) is now becoming more important than income as a factor in inequality and is distributed more unequally. It also shows that policies and institutions can mitigate this inequality. Research into the extent of a gender wealth

gap in Europe finds that increasing women’s pay and the amount of time they spend in paid employment

would help them to build assets to invest in theirs and their children’s future, as well as in their security against unemployment and financial emergencies. Another area where action can be effective is improving women’s access to finance, which remains one of the potential difficulties women face in starting and growing their own businesses and farms. At the highest level of economic decision-making, where women continue to be under-represented across the EU, legislative and voluntary initiatives have been shown to promote gender balance.

Global outlook

As within the EU, financial inclusion of women is crucial for reducing poverty and boosting economic growth in all societies around the world and in particular in developing countries. According to the UN Secretary-General’s 2015 report on Progress towards the SDGs, financial exclusion disproportionately affects women and the poor. As also confirmed by the abovementioned 2016 UN panel report, 57 % of women globally have a financial account, compared to 64 % of men. Although women’s account ownership has increased several percentage points since 2011, the global gender gap in this area is around 7 percentage points compared to 9 percentage points in developing sub-Saharan economies, the Middle East and North Africa. Gender gaps in savings and credits are worse for the poor, especially those living on US$2 or less a day: poor women are 28 % less likely than poor men to have a formal bank account. Furthermore, poor women are less trusted by banks and financial institutions when savings products are expensive and not suitable to their needs.

EU action

The policy priorities set out in the EU’s current Strategic engagement for gender equality 2016-2019 include increasing women’s employment and equal economic independence, reducing the gender pay, earnings and pension gaps, promoting women’s entrepreneurship and economic leadership and advancing women’s empowerment in external policy – with a specific focus on their economic rights. The European Commission is also exploring avenues for empowering women in the increasingly important tech sector.

European Parliament position

An own-initiative report from the Parliament’s Committee on Women’s Rights and Gender Equality (FEMM), due to be debated on 13 March 2017, calls for action to close the gender pay gap, help women remain in work and improve gender balance on company boards. The FEMM Committee is currently examining ways of boosting women’s economic empowerment in the public and private sectors and tackling the gender pension gap. The Parliament has already stressed the need to tackle women’s higher risk of poverty and lower access to digital resources. In its resolution for the forthcoming 61st session of the UN Commission on the Status of Women, which will focus on women’s economic empowerment, it also calls for more gender-sensitive macroeconomic policies, prioritising new investments in social care infrastructure over cuts to public services, and for action to improve access to financial services, credit, venture capital and markets for women entrepreneurs.

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Economic and financial resources

EPRS

Country codes: Belgium (BE), Bulgaria (BG), Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Ireland (IE), Greece (EL), Spain (ES), France (FR), Croatia (HR), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Romania (RO), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE), United Kingdom (UK).

Data sources: Mediam income, Gender overall earnings gap, Self employed persons and people at risl of poverty or social exclusion are from Eurostat; Saving and borrowing money are from The World Bank; Women holders of agricultural land is from FAO; Managers role is from the European Commission. Notes: GlobalStat is a project developed by the European University Institute’s Global Governance Programme (Italy) and the Francisco Manuel dos Santos Foundation (Portugal).

Disclaimer and Copyright. The content of this document is the sole responsibility of the authors and any opinions expressed therein do not necessarily represent the official position of the European Parliament and of the European University Institute. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament and GlobalStat are given prior notice and sent a copy.

© European Union & GlobalStat, 2017.

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