Equal pay

Equal pay between men and women

We have formal gender equality in the labour market in Denmark and one of the world’s highest employment rates for women. At the same time, we have a very gender-segregated labour market. It is one of the important factors for gender unequal pay.

Only facts on women and men

Data and other knowledge about wage conditions and gender segregation of the labor market are produced on the basis of civil registration numbers. And as the CPR system only operates with the categories of men and women, there are no figures for other genders.

The most widely used figure for the gender pay gap in Denmark is the gross wage gap, and according to Statistics Denmark, it was 12.7 percent in 2019. The gross wage gap is the raw difference between what men and women earn on average per hour, without taking into account their location in, for example, different job functions, industries and sectors.

On average, a man earns 12.7 percent more than a woman. Or to put it another way: Every time a man earns an average of 100 kroner, a woman earns an average of 87 kroner and 30 cents.

There are two main reasons for this. One is the so-called gender-segregated labour market. The second is the skewed valuation of labor.

Horisontal and vertical bias

The gender-segregated labour market refers to a labour market such as the Danish one, where the genders are distributed unevenly. The skew is both horisontal and vertical.

Horisontal gender segregation refers to how genders are distributed differently in relation to industries and sectors. This distribution is very explicit in Denmark. The result is, in popular terms, ‘women’s and men’s professions’.

So-called women’s professions are in care work, while so-called men’s professions are in crafts and in STEM functions (science, technology, engineering, mathematics).

As a consequence of that distribution, women make up the majority of public sector employees, with 78 percent. Men make up the majority of private sector employees, at 74 percent.

Care work less valuable since 1969

Horizontal gender segregation is part of the reason for the gender pay gap in Denmark, as female-dominated professions such as care work are relatively lower paid than male-dominated professions.

This wage hierarchy between ‘male professions’ and ‘women’s professions’ can be traced back to the Civil Service Reform of 1969. The reform ranked all public professions, and the female-dominated professions were valued lowest.

Since this ranking, there has been a wage backlog, which is still evident on the level of wages in various trades. Wages in sectors, industries and work functions with the most women are generally lower than in sectors, industries and work functions with the most men.

Particularly unequal for men

There are generally most men in management corridors and most men with high salaries.

But men are also overrepresented among those who do not get an education and who thus have the hardest time getting high wages. This is happens already in our education system, where the genders are distributed very unevenly. 40% of the population is educated in subjects where one gender is overrepresented.

Vertical: A leader is a man

The vertical gender division looks at how men and women are distributed in the job hierarchy at the individual workplaces and in industries. The picture is quite clear: men dominate in senior positions.

Even in industries where most women are employed, men are more likely to become managers than women. It is seen, for example, in day care institutions and in home care.

A study from Berlingske in 2020 shows that in the 1,000 largest Danish companies, there are 69 female directors. The number has gone back: In 2019, there were 75 female directors.

The different positions of men and women in the hierarchy also has a bearing on the gross pay gap.

Price of work

The Danish Equal Pay Act states that you must be paid equal pay for work “of the same value.” It is a central and delicate formulation that requires one to be able to determine what a piece of work is worth.

As mentioned, the Civil Service Reform from 1969 ranked care and nursing – and in general work that traditionally took place within the four walls of the home – lower than, for example, crafts.

More than 50 years after the reform, the value of work is up for discussion. In Denmark, ‘responsibility for people’ is not part of the Wages Commission’s model for comparing work areas, as is the case in Sweden, for example.

In Denmark, ‘special physical strain’ and ‘risky work’ are parameters that have an impact on the value of work.

In practice, the so-called ‘women’s professions’ such as nurse, social and healtch care assistant and educator are valued low because they deal with people, but are not considered risky or particularly physically stressful.

In 2012, the National Equal Pay Network prepared five proposals to promote gender equality in the Danish labor market. A key proposal was to renew the valuation of work functions across industries. It would supposedly change the unequal pay that is a result of the Civil Service Reform of 1969.

Overview: Gender and work

Men get new jobs faster than women. Women are more educated than men. Women and men share maternity and parental leave very unequally.

Get an overview of these and other gender differences in the labor market at the Ministry of Employment.

Legislation on equal pay

The wage differences exist despite the fact that both Danish legislation and the EU ensure that workers must have equal pay regardless of their gender. EU countries have a duty to remove the barriers that prevent men and women from receiving equal pay for equal work or work of equal value.

In Denmark, the Equal Pay Act was passed in 1976 and, like the EU directive, ensures that all genders are entitled to the same pay and pay conditions for the same work or work with the same value. This does not mean that men and women should always have the same pay. But this means that there must be no pay gap as a result in of gender differences.

The gross pay gap of 12.7 percent is a ‘raw’ figure because it does not concern whether the pay is given for exactly the same work. But even if one corrects for different jobs, there is a difference in the pay of men and women.

Equal Pay Act on gender only

The Equal Pay Act is part of the Gender Equality Act, which is intended to ensure equality between men and women. The laws deal with gender but not with other identity markers such as age, disability, ethnicity, sexual orientation or other gender identities than woman and man. These other markers can only be covered by the Act on the Prohibition of Discrimination in the Labor Market.

Explained and unexplained pay differences between men and women

While the gross wage gap does not distinguish between different industries, sectors and functions, there are two other calculations that take into account a large number of factors.

The explained pay gap is the part that can be ‘explained’ by the fact that men and women are statistically placed differently on a number of factors such as sector, education, work experience and in job hierarchy.

The unexplained pay gap is the difference that remains after sorting out the explained difference. Popularly said: The difference that one can not find the cause of in specific factors such as education.

15 percent can not be explained

The explained and unexplained wage differences were examined by VIVE – the national research and analysis center for welfare in 2020.

VIVE concludes that 85 percent of the pay gap between women and men can be explained, while 15 percent of the pay gap is ‘unexplained’.

VIVE writes about the 15 unexplained percent that they “can be due to two things: that there are conditions that the analysis does not take into account, and that women and men with ‘same’ characteristics receive different pay.”

The study emphasises that the ‘explained’ differences can be both “fair and unfair”. In other words, the explanation is not necessarily a fair or reasonable reason for the pay gap.

One explanation for the pay gap is that women have more absenteeism and less work experience than men. According to VIVE, these factors explain 11.5 per cent of the wage differences between women and men in Denmark.

Higher education does not help women

Among other things, VIVE looks at what a factor such as education means for men’s and women’s salaries, respectively.

VIVE points out, for example, that women take longer educations than men, but do not achieve a wage gain.

At the same time, however, the study shows that if women had as short an education as men, the wage gap between the two sexes would be 3.2 per cent larger.

Unpaid work

In addition to the work that counts in official statistics, most people also have tasks that do not generate pay, and which are often not described as ‘work’ at all. These are tasks such as domestic work at home and care work for the youngest and oldest in the family.

Both in Denmark and internationally, there is a discussion going on about how to value and measure this “unpaid care work and work at home”, as it is called in the Sustainable Development Goal Five on gender equality.

In large parts of the world, this unpaid work is a full-time job for mothers and other women. In Denmark, it is usually a side job, which is also unevenly distributed between the sexes. Women spend on average one hour more a day on unpaid work than men do, according to a study by the Rockwool Foundation.

The study also shows that the more time you spend in the labor market, the less you spend in the household and vice versa.

The cost of children

A large part of the unpaid work is caring for very young children during maternity and parental leave. Here, women are responsible for the vast majority of work in Denmark and globally.

But it is not only in the actual care work that it ‘costs’ to have children. For women, it also costs in terms of salary, career and pension.

Research shows that in Denmark, women’s and men’s incomes develop largely in parallel until the birth of the first child. Then women’s gross income drops nearly 30 percent. The birth of the first child does not affect men’s income.

In the years after the first child, women’s gross income rises again, but it never returns to its original level in line with men’s. Ten years after the first child, women’s gross income has stabilised at about 20 percent below the original level.

Each child costs 10 percentage points for the mother

Overall, research shows that every child a woman has costs her 10 percentage points on the salary. The wage of men is largely unaffected by whether or not they have children.

The fact that women’s wage development falls by 30 per cent right after the birth of their first child is due to the fact that it is mainly the mothers who take the majority of maternity leave and later also take on more of the unpaid work tasks in connection with children.

This means that more women work part-time and often have shorter or longer periods of absence from the labor market. This has the effect of making it more difficult to rise in the job hierarchy. You can read more about maternity and gender equality via this link.

Unequal pay and ethnicity

Issues of equal pay are not only closely linked to gender. In relation to ethnicity, there are also clear differences, both vertically and horisontally.

In the same way that there are male- and female-dominated professions, there are also professions and industries where immigrants and people with a minority ethnic background are overrepresented. This applies, among other things, to the restaurant and cleaning industries.

Compared with majority ethnic Danes, immigrants with a non-Western background in particular often work in jobs at the lower end of the job hierarchy. This division has in many ways the same effect as the overall gender division of the labor market has: lower wages and poorer employment opportunities.

At the same time, a study from the Rockwool Foundation from 2017 shows that despite the same level of education, immigrants with a non-Western background receive less in hourly wages than majority Danes.

For example, women with primary school as the highest level of education receive six percent less if they have a non-Western background. The difference is as high as 63 percent for women with a long higher education.

Read more about integration, employment and gender equality via this link.