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Swedbank: Estonia's gender pay gap caused by long parental leave

A mother on parental leave at home with her young child. Estonia has one of the most generous parental leave systems in the world.
A mother on parental leave at home with her young child. Estonia has one of the most generous parental leave systems in the world. Source: (Peeter Langovits/Postimees/Scanpix)

According to Swedbank chief economist Liis Elmik, one of the chief causes of Estonia's gender pay gap, which is the largest in Europe, is its long parental leave, which is one of the most generous in the world.

"One of the causes for a gender pay gap that stands out in Europe is Estonia's extraordinarily long parental leave," Elmik said in a press release on Monday. "By age group, the pay gap is largest between the ages of 35-44, when women are returning to the labor market after maternal leave; 64 percent of children in Estonia are born to women between the ages of 25-34."

According to Elmik, there is a labor gap in Estonia as well. "Women are more often than men inactive on the labor market, or engaged part-time," she explained. "Part-time work may hinder movement on the career ladder and therefore foster a pay gap."

Another reason beind the pay gap is that men are more likely to work in leading and technology-related positions, where the average salary is higher, the economist continued. Women are more likely than men to be the ones caring for children and other family members. Namely, the gender pay gap among parents is greater than among employees without children. On average, Estonian women did 18 percent lesspaid work and 60 percent more domestic labor per day than men.

Statistics Estonia reported on Monday that in October 2017, the average gross hourly earnings of female employees in Estonia were 20.9 percent lower than those of male employees. After three years of decline, the gender pay gap remained steady on year.

According to Swedbank, it is important for the bank that both men and women receive equal pay for equal work. "The salaries of people doing similar work are monitored so that there are no unwarranted differences," Elmik said. "The salary of those returning from parental leave will be reviewed and raised to a similar level of that of their colleagues. Thanks to these measures, Swedbank has by now reduced the unjustified gender pay gap to less than one percent."

Editor: Aili Vahtla

Source: BNS

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