ECONOMIC COMMISSION FOR EUROPE
60th Anniversary Session, Geneva, 25-27 April 2007
Promoting sustainable development in the ECE region: Some decisive factors
(c) The economics of gender in the European economy
Keynote Speech 27 April 2007
Gender equality: a key component of a modern growth strategy
by Kjell Erik ØIE, State Secretary, Ministry for Children and Equality, Norway
Ms Moderator, Excellencies, fellow delegates, ladies and gentlemen.
Let me first of all thank UNECE for setting gender equality as a key component of modern growth strategy on the agenda. I take the opportunity to congratulate the Commission and its members on its 60th birthday. The ECE has a proven record of great achievements in the past. By focusing on economics of gender the Commission has embarked on yet another step towards sustainable economic development.
It is a special honor for me to share with you our policy and our experiences on the economics of gender in Norway with this distinguish panel and the other participants from the region.
Modern societies need to utilize all human resources, with their personal qualities, education and skills, regardless of gender. Both women and men must be able to participate in working life, social life and family life. It is a matter of democracy, and to be honest: It should be a matter of common sense.
In the near future the majority of European countries will have labour shortages and a swelling population of people over 65. The proportion of the employed population might be too small. Europe faces two main challenges in the years ahead. Firstly; to ensure that more children are born. Secondly; to ensure that more people work and work longer. The solution to these challenges lies in viewing family and equality policy in close combination with labour market policy and thereby as part of a larger modern growth strategy for the region. We must both increase the birth rate and achieve an including working life.
The key in economics of gender is a redistribution of power, care and work. When doing so, we will meet strong resistance. People seldom let go of power voluntary. There are counter forces to such a development. These counter forces needs to be addressed. But redistribution of power, care and work is the only road ahead for sustainable development in our region.
In Norway we know it is a positive correlation between female employment and fertility. Norwegian women have one of the highest birthrates in Europe. Our total fertility rate is 1,9; the highest rate since 1991. At the same time is the labour force participation rate for Norwegian women on the top in Europe together with Iceland and Sweden, 69 per cent (age 16-74). If we just look at the mothers (at least one child below 15 years) the labour force participation numbers 81 per cent. In the Nordic countries where it is possible to combine work and family life, female employment and fertility tend to be higher than in countries where women have to choose either to work or to have children. In some countries having children is the major factor hindering female employment, having more than one child increases this. In other words; facilitating women’s labour force participation helps to boost low fertility rates!
The importance of childcare is also reflected in a Eurostat survey from 2004 (where about half of the women cite personal and family responsibilities as the main reason for not entering the workforce.)
Our experience in sharing power, care and work – has made us focus on two other interconnected matters in addition to childcare subsidies and development;
Firstly; Mechanisms for Child benefits and Parental leave
Secondly; Equality in economic decision making
Firstly; Mechanisms for Child benefits and Parental leave
In Norway good public arrangements for families with small children have been introduced precisely to make it possible to combine work with child care. These arrangements have been developed for both parents over three decades and have provided the basis for female employment. Today (as I said earlier to day) 68,7 per cent women participate in the work force.
Childcare institutions in Norway are both an educational service and a care service for small children. The Government considers this to be a key condition for high level of labourmarket participation of both parents with small children. In Norway we have increased the state subsidies to cover 80 per cent of the running costs and introduced a maxprice for attending the service. This policy has boosted the number of childcare institutions in Norway. By 2008 we will have full coverage for 1-6 years.
Norway is a pioneer in politicising fatherhood. We want to widen our understanding of men’s responsibility as fathers to include not only economic provision, but also psychological, emotional and physical care for children. When it comes to gender equality, we must create an alliance between men and women. In my opinion, both genders gain from a gender equal society!
Paid maternity leave was replaced by parental leave in the 70s, based on the idea of shared parenthood. The next step was a major (Nordic) innovation – the father’s quotas – a non-transferable part of parental leave reserved for the father. Norway was the first to introduce a father quota in 1993.
As a driver for change; fathers’ quotas are a success story. Currently a large majority of fathers - about 90 per cent of the eligible fathers now enjoy their leave. It is interesting that when you ask men about the father’s quota, they talk about it as aright they are proud to have.
At present we have 54 weeks with 80 percent paid parental leave (or 44 with 100 percent paid parental leave), where 6 weeks are obligatory for the fathers. My Government will propose to expand the father’s quota with 4 new weeks.
Secondly; Equality in economic decision making
Women and men’s access to economic resources is reflected in their participation in the workforce. When we look at Norwegian business and industry and the people in charge of substantial financial resources and technology, we find few women in senior positions.
The Government has taken a radical step to change this. We are the first and as far as I know the only country in the world to have an Act on gender representation on the boards of public limited companies (from 1 January 2006) in state owned companies and inter municipal companies (from 1 January 2004). Personally I am all for the use of quotas. Application of quotas is not about reinstating competent men with mediocre women, but to recruit skilled women to replace mediocre men. Men in leading positions have their own recruiting methods. Men engaged alike men in their boards and other leading positions – they have their own quotas system!. In a perfect (and equal) world quotation is not necessary, but to readjust mistakes politicians must - if they want to change discriminatory status quo - act and find new solutions.
It has paid off; by January 2007 – 38% of all 525 boards of public limited companies fulfill the new requirement, but 28% of them still don’t have female board members. They declare it’s impossible to find 460 women to enter these boards. I don’t believe in that! Norway is full of competent, well educated women. We know from experience; men in leading positions tend to recruit other men to similar positions. Politicians have the responsibility to break this stagnation. In the state owned companies the gender balance is now 40-60 on an average.
The absence of women in economic decision making is a problem both for business and industry, and for economic growth. Balanced participation in decision making is also a question of democracy. My Government regards the legislation on women on company boards as an important step towards equality in economic decision making, a fairer society and a more even distribution of power. We also see this as an important factor in the creation of wealth in society. The legislation will secure women's influence in decision making processes of great importance for the economy in the society. Women of today are highly educated and we need their competence in all spheres and sector in the labour market.
These interconnected facts (I Mechanisms for Child benefits and Parental leave; II Equality in economic decision making) - is something politicians must both inform about and act on; but in a different way than in the past.
So - to conclude;
When we in Europe in the near future will be lacking labourforce, it is crucial to make use of all the human resources in any country and region, not just half of it. It will also strengthen competition abilities in a global economy when all of the competence in our societies is taken into account. I strongly believe; using all available human resources will create diversity, diversity will bring about creativity, which will bring economic growth as a consequence.
It is also smart economics since it seems to be a growing consensus on when closing the gap between male and female employment, it will have huge economic implications for the global economy. To quote an article from The Economist from 21st April; (” Womenomics revisited - If more women were in paid work, the world could be much richer”) referring to (Global Economics Paper No: 154 (2007) by) Goldman Sachs (the global investment banking, securities and investment management firm), where you can read the following:
“Reducing gender inequality could play a key role in addressing the twin problems of population ageing and pension stability”
…and to quote further:
”Governments could do much more to narrow the gender employment gap:
reducing tax distortions that discourage female employment, eliminating differences in retirement policies and subsidising child care are three obvious examples”
I am glad to see that major development partners such as the World Bank, by implementing the new Gender action plan, now fully recognizes the premise that economic empowerment of women is smart economics. Not only will the society benefit from women’s participation in the four (product, financial, land and labour) markets addressed by this action plan, it is actually dependent on women’s equitable participation for sustainable economic growth and poverty eradication. I therefore urge the Bank and other donors to make sure that this action plan will be sufficiently financed so that it can be implemented in line with its intentions.
Globalisation is not just about looking outwards and understanding the changes, but also about looking inwards and understanding one’s own strengths and skills. We must do so in our region, we must learn from each other and find new solutions. Gender equality is a corner stone and basic value for a modern and fair welfare state; it is not a result of the welfare state!
Competition in the future will be increasingly about the ability to innovate and produce value-creating solutions. This will require the establishment of a strong innovation culture and the ability to use – men and women’s – own unique core skills.
Thank you for your attention.