PwC Women in Work Index reveals COVID reversing workforce gains

Progress for women in work could be back at 2017 levels by the end of 2021 as a result of the COVID-19 pandemic, according to analysis conducted for PwC’s annual Women in Work Index. The report, which measures female economic empowerment across 33 Organisation for Economic Cooperation and Development (OECD) countries* shows evidence emerging globally that the damage from COVID-19 and government response and recovery policies is being disproportionately felt by women.

The Women in Work Index is a weighted average of five indicators that reflect female participation in the labour market and equality in the workplace: the gender pay gap, female labour force participation, the gap between male and female labour force participation, female unemployment and female full-time employment rate.

For nine years, countries across the OECD* made consistent gains towards women’s economic empowerment. However, due to COVID-19 this trend will now be reversed, with the Index estimated to fall 2.1 points between 2019 and 2021, according to analysis undertaken for PwC’s annual Women in Work Index. The Index will not begin to recover until 2022, where it should gain back 0.8 points. 

In order to undo the damage caused by COVID-19 to women in work - even by 2030, progress towards gender equality needs to be twice as fast as its historical rate.

Emma Scott, People Leader, PwC Ireland said, “The setbacks that we are experiencing with COVID-19 in terms of the workforce tell a worrisome story. While the impacts are being felt by everyone across the globe, we are seeing women exiting the workforce at a faster rate than men. Women carry a heavier burden than men of unpaid care and domestic work. This has increased during the pandemic, and it is limiting women's time and options to contribute to the economy. In the labour market, more women work in hard-hit human contact-intensive service sectors  - such as accomodation and food services, and retail trade. With social distancing and lockdowns, these sectors have seen unprecedented job losses.”   

Between 2019 and 2020, the annual OECD unemployment rate increased by 1.7 percentage points for women (from 5.7% in 2019 to 7.4% in 2020). 

The disproportionate burden of unpaid childcare falls on women

Before COVID-19 hit, women on average spent six more hours than men on unpaid childcare every week (according to research by UN Women). During COVID-19, women have taken on an even greater share and now spend 7.7 more hours per week on unpaid childcare than men**  - this ‘second shift’ equates to 31.5 hours per week; almost as much an extra full-time job. 

This increase in unpaid labour has already reduced women’s contribution to the economy. If this extra burden lasts, it will cause more women to leave the labour market permanently, reversing progress towards gender equality and reducing productivity in the economy.

PwC Women in Work 2021 Index (performance prior to COVID-19 pandemic)

Iceland continues to hold the top spot on the Index out of OECD countries. It is a consistent strong performer in female labour force participation (84%), has a small participation rate gap (5%), and even smaller female unemployment rate (3%).

Greece saw the largest increase in terms of Index score between 2018 and 2019, driven by improvement in all labour market indicators except for the share of full-time female employees. On the contrary, Portugal experienced the largest decline in Index score between 2018 and 2019 due to a widening of its gender pay gap by 5 percentage points.

New Zealand and Slovenia both increased their rankings on the Index by one position. New Zealand saw an upward trend across all five indicators and has risen by 5 spots on the Index over the course of nine years. Government policy and a history of female representation in political institutions have helped to drive these gains. Slovenia’s improvement was driven by a fall in the participation rate gap and in female unemployment, as well as an increase in the share of full-time female employment.

If OECD countries increased their rates of female employment to match Sweden’s (consistently the top performer), the gain to GDP would be over US$6 trillion per annum. The US, with one of the highest female unemployment rates, is expected to gain the most - as much as US$1.7 trillion per annum. 

Ireland moves up the rankings but the rise in unemployment rate for women is larger than it is for men during COVID-19

PwC’s latest Women’s in Work Index ranks Ireland #14 which was the largest improvement in the ranking on the index, rising by four places from 18th place to 14th place.  Progress was mainly driven by the narrowing of the gender pay gap and a fall in the female unemployment rate.  Female Boardroom representation for Ireland is 27%. 

While it is good news that Ireland climbed in the rankings of the latest Women in Work Index, it is disappointing that the latest evidence shows that the rise in unemployment rate for women is larger than it is for men during COVID-19. For example, unemployment data released from the OECD for 2020 shows that while both the male and female unemployment rate has increased between 2019 and 2020, the percentage point increase for females is higher. The female unemployment rate increased from 4.7% in 2019 to 6.1% in 2020 (an increase of 1.4 percentage points), while the male unemployment rate increased from 5.2% in 2019 to 5.9% in 2020 (an increase of 0.7 percentage points). 

The GDP impact of increasing female employment rates to Swedish levels for Ireland would be US$54 billion or 12%.  The impact on female earnings from closing the gender pay gap for Ireland would be US$4.8 billion or 10%. 

Ger McDonough Partner in People and Organisation at PwC Ireland said, “While some women may leave the workforce temporarily due to COVID-19 with the intention of returning post-pandemic, research shows that career breaks have long-term impacts on women’s labour market prospects. For employers, the impact of attrition is likely to exacerbate skills shortages, threatening business growth, and compound challenges in meeting diversity and inclusion targets. Organisations can prevent this avoidable loss by engaging all of their people, particularly women, to understand the support they need to stay in work. Practical steps include introducing or updating flexible working arrangements, strengthening the inclusivity of their organisational culture, and considering the D&I impacts of key decisions such as restructuring. Organisations that take a longer term view will ensure that they have access to the best talent for a post-COVID-19 world.”

The Top Ten countries in PwC’s latest Women’s in Work Index

1. Iceland
2. Sweden
3. New Zealand
4. Slovenia
5. Luxemboourg
6. Norway
7. Denmark
8. Finland
9. Portugal
10. Belgium

Notes to editors

1. The Women in Work Index is calculated on a consistent basis year on year which this year is based on the movements between 2019 and 2018
2. *The five indicators that make up the PwC Women in Work Index are: the gender pay gap, female labour force participation, the gap between male and female labour force participation, female unemployment and female full-time employment rate
3. ** OECD Short-term Labour Market Statistics
4. ***Source: HMRC Coronavirus Job Retention Scheme statistics, December 2020
5. The annual Women in Work Index uses OECD data (actuals) for 2019. To assess the potential impact of COVID-19 on the Index we use OECD forecasts of the labour market size and unemployment rate to estimate the Index in 2020, 2021 and 2022. 
6. Read the full PwC Women in Work Index
7. Read the PwC’s Women Returners Study