Social europe, employment and health

• Author: Directorate-General for Parliamentary Research Services (European Parliament)
• Pages: 137-151

Europe’s two trillion euro dividend: Mapping the Cost of Non-Europe, 2019-24

137

SOCIAL EUROPE, EMPLOYMENT

AND HEALTH

26. Reducing the gender pay gap

Potential efficiency gain: €43 billion per year

Key proposition

Progress in closing the gender pay gap (GPG) has been slow, although the principle of equal pay has

been enshrined in the EU Treaties since the very beginning.592 According to the latest available data

(2016) from Eurostat593, women’s gross hourly wages were 16.2 % lower than those of men in the EU

as a whole (there has been only a small decrease since 2015, when the gap was 16.3 %). Reducing

the GPG is not only desirable in its own right, but it would also have positive effects on economic

growth in Europe. A European Added Value Assessment, prepared by the European Added Value

Unit of EPRS for the European Parliament’s Committee on Women’s Rights and Gender Equality

(FEMM) in 2013, estimated that a decrease in gender pay gap by one percentage point would

increase economic growth by 0.14 %594.

This would amount to about a €21.5 billion GDP increase in today’s money. According to this study,

a revision of the directive on the implementation of the principle of equal opportunities and equal

treatment of men and women in matters of employment and occupation (2006/54/EC) could reduce

GPG between 1 and 3 %. A more recent Cost of Non-Europe Report,595 undertaken by the European

Added Value Unit in 2018, identifies an additional net benefit of about €13 billion per year deriving

from improved access to different forms of leave and of flexible working arrangements596. Assuming

that the combined effect of these two measures could reduce GPG by 2 percentage points, this

would mean a GDP increase of €43 billion per year.

592 Article 119 of the Treaty of Rome. Currently the principle of equal pay is recognised in Article 157 of the Treaty on the

Functioning of the European Union (TFEU).

593 Difference between average gross hourly wage between men and women. Eurostat, Gender gap in unadjusted form.

594 M Del Monte, Application of the principle of equal pay for men and women for equal work of equal value, European

Added Value Unit, European Parliament, July 2013.

595 W van Ballegooij and J Moxom, Cost of Non-Europe Report on Equality and the Fight against Racism and Xenophobia,

European Added Value Unit, European Parliament, March 2018. The expected benefits identified are between 7 and

19 billion per year.

596 Based on European Commission Staff Working Document, SWD(2017)2 02.