A new study reveals that women in the EU face significant challenges when it comes to achieving financial independence, largely due to gender inequalities that persist throughout their lives. The study shows that women have fewer financial resources, including earnings, income, and wealth, compared to men. Gender inequality is particularly prominent among older individuals, with a 48% income gap between men and women in the EU when economically inactive for family-related reasons. This gap decreases to 34% in retirement and further narrows to 10% when women are employed. Factors such as unpaid care and domestic work, labour market segregation, gender pension gap, and economic violence contribute to this imbalance.
According to Madeline Nightingale, one of the authors of the study, issues such as one’s situation within the labour market and financial literacy can impact their ability to accrue wealth, make decisions, and have influence within the household. The interconnected nature of these factors can lead to the reinforcement of inequalities over one’s lifetime. Women in the EU are more likely than men to participate in everyday financial decisions such as daily shopping and managing children’s expenses. However, they are less likely to be involved in making larger, more strategic financial decisions, which Nightingale believes is linked to historical roots and the fact that women generally earn less and have fewer resources and decision-making powers.
The study also highlights the gender pay gap in the EU, which currently stands at 12.7% on average. This means that for every euro a man earns, a woman earns only 87 cents, resulting in a difference equivalent to about one and a half months’ salary per year. Nine out of 10 Europeans find it unacceptable that women are paid less than men for the same work or work of equal value. The EU has implemented extensive legislation on gender equality, the labour market, and anti-discrimination in pay, with recent developments such as the pay transparency directive aimed at addressing these issues. Hofman believes that these policies have had a positive impact, although it is challenging to estimate their exact effectiveness in the absence of such measures.
Overall, the study highlights the persistence of gender inequalities throughout women’s lives in the EU, particularly regarding financial independence and decision-making. Factors such as unpaid care and domestic work, labour market segregation, gender pension gap, and economic violence contribute to the income gap between men and women, which is more pronounced among older individuals. Despite progress in legislation and policies addressing gender pay inequality, there is still work to be done to achieve true gender equality in financial matters. The study emphasizes the importance of addressing these interconnected issues to reduce inequalities and empower women to make informed financial decisions and achieve greater financial independence.
