The Netherlands
Indicators
▶ Index
0,736
▶ Rank
38
Introduction
Bridging the gender gap in the Dutch labour market brings significant opportunities both for individuals and the wider economy
Moving toward gender equality is not only a moral and social issue, it is also vital to the Dutch economy
A new Power of Parity report from the McKinsey Global Institute and McKinsey Netherlands, Capturing the potential: Advancing gender equality in the Dutch labour market, explores the economic potential of narrowing gender gaps in the Dutch labour market. Here’s a look at some of the main findings of our research:
The Netherlands scores well on several indicators of gender equality in society, such as legal protection and digital and financial inclusion of women. Women are also well represented in education, particularly those under 45 who tend to have higher vocational or academic qualifications than men. Nevertheless, there is also significant inequality on nine of the 15 gender parity indicators we examined, six of which relate to the labour market. On four, the Netherlands scores the lowest in Western Europe: number of paid working hours, average monthly income, representation in management positions, and students in STEM education. Women’s potential on the labour market remains significantly untapped; yet despite numerous initiatives from multiple agencies, recent progress has been limited.
Although the female share of participation in the Dutch labour market (46 per cent) is in line with Western Europe (47 per cent), women’s contribution to GDP is considerably lower (33 per cent in the Netherlands versus 38 per cent for Western Europe). This is mainly due to the lower number of hours worked by Dutch women—on average 27 hours per week, compared to 37 for men, and 31 for Western European women on average.
A self-perpetuating system underpins the specific Dutch context on gender equality. This has three dimensions that not only individually affect gender equality, but also seem to reinforce each other: 1) an uneven gender spread across sectors, with women in the majority in sectors with a large share of part-time jobs and a relatively low contribution to GDP per FTE;
2) unequal division of paid work and unpaid care between men and women, with a suboptimal support structure for combining work and care that disproportionally affects women; and
3) deeply embedded social norms that influence women and men’s choices in education, in the labour market, and about care.Yet a stronger position for women in the Dutch labour market could bring significant opportunities for individuals, specific business sectors, and the wider economy. It could strengthen the economic independence of women. Our analysis shows that 230,000 women could become economically independent if they were to work five more hours a week on average. Equally, expanding women’s contribution could be the key to solving growing labour shortages in the healthcare, education, and technology sectors—for instance, if women currently working part-time in healthcare and education would work just one extra hour a week, this could theoretically eliminate current shortages in those sectors. The same holds for shortages in technical sectors if the share of women rose by 2 percentage points. More generally, if women participated in the Dutch labour force at the rate of the country’s best-performing peers, this would add more than €100 billion to GDP. Realizing this potential requires substantial adjustment (and investments) in the labour market, education, and unpaid care.
There is no silver bullet for this complex, systemic problem—a breakthrough requires an integrated approach to tackle multiple dimensions simultaneously, with cooperation between government, employers and unions, businesses, social organizations, and academics. Six solution areas are identified that could help to achieve real progress. First, prioritize specific areas for attention and formulate ambitious, concrete objectives. Second, bring the supporting infrastructure for combining work and care up to the level of other Western European countries. Third, make it (financially) more appealing for women to work longer hours. Fourth, from primary school age onwards, provide high-quality information to boys and girls regarding study and career choices and their implications. Fifth, create a more positive image around themes such as working mothers, caregiving fathers and childcare, using inspirational role models. Sixth, alongside flexible working for both men and women, apply a lifecycle approach to allow both up-and downscaling hours over the course of a career, according to a person’s specific needs.
Download the full report in English (PDF-13MB)
Download the full report in Dutch (PDF-13MB)
ABOUT THE AUTHOR(S)
Wieteke Graven is a partner in McKinsey’s Amsterdam office, and Mekala Krishnan is a senior fellow of the McKinsey Global Institute.
“ If women participated in the Dutch labour force at the rate of the country’s best-performing peers in Western
Europe, this would add more than €100 billion to GDP. Realizing this potential requires substantial adjustment (and investments) in the labour market, education, and with regard to unpaid care.”
Background
Untapped Potential of Women in the Dutch Labour Market
From a social and economic perspective, the Netherlands tends to be seen as a progressive country, recognized for its innovative economy, digital performance, and for having the happiest children in the world.
However, one area where the Netherlands does not perform quite so well is in relation to women’s position in the labour market. While Dutch women perform well in education and female participation levels are relatively high, on average women work considerably fewer hours than men and their contribution to gross domestic product (GDP) is much lower than men’s. Women’s equality in society does not translate into the labour market. This lack of parity becomes even clearer when we compare the Dutch situation with the rest of Western Europe. Despite a variety of initiatives and extensive Dutch media attention on this issue, limited progress has been made. Our analysis points to a system that explains the inequality in the Dutch labour market.
This system consists of three dimensions:
- First, men and women tend to participate in different sectors of the economy with women in the majority in sectors with a large share of part-time jobs and relatively low contribution per FTE to GDP.
- Second, there is an unequal distribution of paid work and unpaid care tasks between men and women, with women still taking on the lion’s share of unpaid care tasks and with a suboptimal infrastructure around unpaid care tasks that disproportionally affects women.
- Third, there are deeply embedded social norms and views in the Netherlands that influence women’s and men’s choices in education, in the labour market, and also in relation to care.
Moving towards gender parity is not only a moral and social issue, but greater parity is also vital for the Dutch economy: for individuals, for companies and within sectors, and for the country as a whole.
Greater participation in the economy will help women to become and remain economically independent. Moreover, expanding women’s contribution to the labour market can be the key to solving the current, growing labour shortages in sectors such as healthcare, education, and technology. As the population ages, we are seeing the size of the available workforce shrink, while technological advances such as digitization and automation increase demand for specific technical skills, especially in digital skills.2 Better employment of qualified female talent will help to deal with these changes in the labour market. Finally, if women participated in the Dutch labour force at the rate of the country’s best-performing peers, this would add more than €100 billion to GDP. In short, increasing parity offers huge opportunities and benefits for the Netherlands, but will require major changes in the way education, labour, and care are being organized. This study builds on existing research, including the global Power of Parity report published by McKinsey Global Institute (MGI) in 2015.3 It aims to provide a fact-based perspective on the value of greater gender parity in the Dutch labour market. This study is not a call for women to work full-time. The choice of whether to work longer or even not at all is a personal one to be taken by individual women. Moreover, that choice may be dependent on each individual’s circumstances and aspirations. Our analysis shows the value of greater gender parity—the emphasis is on creating an environment in which women are able to make the choices they want to make.
Analysis
GENDER EQUALITY IN SOCIETY DOES NOT TRANSLATE TO LABOR MARKET
This study uses, as in MGI’s global Power of Parity research, 15 indicators to assess gender equality on a holistic basis across society and work.5 At the same time, we also take the Western European context into account.6 The Netherlands shows high or extremely high inequality on nine of 15 gender equality indicators, of which six relate to the labour market.
The Netherlands scores well on several indicators of gender equality in society, such as legal protection and digital and financial inclusion of women.
However, the Netherlands scores point to a high or even extremely high degree of gender inequality on nine out of 15 indicators (Exhibit 1): of these, three relate to society in general (political representation, violence against women, and students in STEM education) while the majority apply to the labour market (entrepreneurship, unpaid care work, perceived wage gap for similar work, paid working hours, average monthly income, representation in management positions). Thus, while the Netherlands seems to have a solid foundation of gender equality in society, this is not reflected in the labour market, where women’s potential remains significantly untapped.
Strategy
The Netherlands scores lowest on four indicators compared to other Western European countries
For the nine indicators that point to a high or extremely high degree of inequality, the Dutch scores for five of those indicators are in line with those of many other Western European countries, which almost all have low scores. However, on four indicators the Netherlands scores the lowest amongst this group of countries:
Number of paid working hours—the average number of paid hours worked by women is 71 per cent of the number for men, while the average in Western Europe is 79 percent.7
Average monthly income—women’s average monthly income is 61 per cent of that of men, while the average in Western Europe is 68 per cent.8
Representation in management positions—on average, for every 100 men in management positions, there are 34 women (that is, the share of women is 25 per cent of all management positions); in Western Europe, the average is 48 women for every 100 men (32 per cent).9
Students in STEM education—for every 100 men in STEM education, there are 30 women (that is, the share of women is 23 per cent); in Western Europe, the average is 44 women for every 100 men (31 per cent).10
Among these four indicators, we have focused our research, especially on the difference in paid working hours between men and women. Growing the number of hours worked by women is an important driver of economic potential, which we discuss further in Chapter 3. The second indicator, the gap in monthly income between men and women, is strongly driven by the number of hours worked and to a lesser extent by differences in pay for equal work.11 The last two indicators, representation of women in management positions and students in STEM education, are discussed in Box 1, “Women at the top” and Box 2, “Women in STEM education and careers,” respectively
Female share of workforce is in line with Western Europe, but women’s contribution to GDP is considerably lower, mainly driven by number of paid working hours
Our research focus on the number of hours worked by women and its impact on economic potential raises some significant issues. In 2016, Dutch women represented 46 percent of the overall workforce, in line with the Western European average of 47 percent, but they contributed only 33 percent to Dutch GDP, which is considerably lower than the Western European average of 38 percent.22 The difference between the female labor force participation and GDP contribution is largely explained by the relatively low number of paid hours worked by women and their disproportionate concentration in sectors with a relatively low contribution to GDP per full-time equivalent (FTE).23
The Dutch part-time model is a double-edged sword
In the Netherlands, both men and women work much more frequently in part-time jobs than other Western Europeans.24 Almost half of the Dutch workforce works fewer than 35 hours per week—among working women, this percentage reaches 74 per cent.25 This applies to both “small” and “bigger” part-time jobs: 26 per cent of working women are in a job that involves fewer than 20 hours per week, 25 per cent work 20–28 hours per week, and 23 per cent work 28–35 hours per week.26 On average in the Netherlands, women work 27 hours per week, ten hours fewer than men, and four hours fewer than the Western European average for women, who work 31 hours.27 The Dutch government has sought to stimulate part-time work to increase the labour force participation of women.28 Working part-time is nowadays more or less the norm for women in the Netherlands where only 26 per cent of the female workforce works full-time.29 On the one hand, working part-time undoubtedly offers many advantages—for example, because it enables people to combine work with care. On the other hand, the downside of this large share of (“small”) part-time jobs is that there is substantial untapped potential in relation to women in the labour market. This becomes all the more significant when we consider that women in the Netherlands tend to have such a high degree of parity in education.
WOMEN’S SUCCESS IN EDUCATION CONTRASTS WITH THEIR POSITION IN THE LABOR MARKET
Education provides an important basis for success in the labour market. Women make up around 56 per cent of recent graduates in academic and higher vocational education (Exhibit 2).30 Yet, women’s success in education is not reflected in the labour market: there are differences across all age ranges and at all levels. This is further exacerbated in the case of STEM careers; as discussed above, this is an area with a lack of parity even in education, which then translates into lack of parity in the labour market. The incongruence already shows at the beginning of careers: 65 per cent of women younger than 30 with a vocational degree work part-time, versus 31 per cent of men.31 The same pattern is visible across all age ranges. In the 35–45 age group, the share of highly educated men and women are relatively close: 39 per cent for men and 42 per cent for women.32 But in terms of a number of paid working hours, the situation is very different. In the same age range, 46 per cent of women work less than 28 hours per week, versus only 5 per cent of men.33 Younger generations of women do seem to work slightly more: in the age range of 25–35 years, 33 percent of women work fewer than 28 hours, in 2007 this was still 38 per cent.34 Differences are visible across all levels in the labour market: women make up 46 per cent of the labour force, while only 25 per cent of management positions are filled by women, and representation of women in executive team positions of listed companies is only 6 per cent. In short, the potential of women’s achievements in education is only partly tapped into in the labor market.
DESPITE NUMEROUS INITIATIVES, THERE HAS BEEN LIMITED PROGRESS TOWARDS PARITY
In recent years, the government, employers and employees, and other stakeholders have launched numerous initiatives to improve the position of women in the Dutch labour market. The government has, for example, implemented tax measures to increase net salaries for (female) employees with low incomes. Since 2015, the government has simplified and improved arrangements related to formal childcare, to offer more income support for mothers (for instance, via the Algemene Kinderbijslagwet). Also, there have been measures to increase female labour force participation (for instance, allowances for formal childcare). Additionally, more flexible measures have been introduced for both maternity and partner leave, and the government is currently exploring options to extend partner leave from 2020 onwards.
Implementation
The benefits of Improved Parity in The Netherlands
A stronger position for women in the labour market offers many opportunities for individuals, for companies and sectors, and for the entire economy. It could enhance the economic independence of women, help to resolve shortages in the labour market, and contribute toward additional GDP.
A MORE EQUAL POSITION OF WOMEN IN THE LABOR MARKET STRENGTHENS THE ECONOMIC INDEPENDENCE OF WOMEN
A more equal position in the labour market, and specifically a higher average number of paid hours worked, could bolster women’s financial position in several ways. For example, it could reduce the existing pension gap between men and women, which was still at 46 per cent in the Netherlands in 2014.56 Further, a stronger position in the labour market will help reduce deterioration in women’s financial situation in the wake of a divorce or the passing of their partner. This deterioration in financial position is often much greater for women than for men: in 2014, women lost around 25 per cent of their purchasing power in the first few years after a divorce, versus 0.2 per cent for men.57 In the Netherlands, there are 1.9 million women who do not have economic independence (compared to 1.0 million men).58 Of these, around 660,000 women are in a paid job but are still economically dependent on a partner.59 Typically, they may work in a “small” part-time job—almost 70 per cent of this group of women work less than 20 hours per week. Our analysis shows, however, that more than 230,000 of these women (around 35 per cent of this group) could become economically independent if they were to work five hours a week more on average.60 A
HIGHER NUMBER OF PAID HOURS WORKED BY WOMEN CAN BE THE KEY TO SOLVE GROWING LABOR SHORTAGES IN CRUCIAL SECTORS
Greater labour market participation, especially in terms of paid hours worked, can help to solve current and anticipated labour shortages in important sectors of the economy, such as healthcare (28,400 vacancies in the final quarter of 2017), education (5,300 vacancies), and information and communication, transport and storage, manufacturing, and construction (in total 56,600 vacancies).61 It is anticipated that the number of vacancies in these sectors will only increase. Because of, among other things, an ageing population, the anticipated number of new jobs in the healthcare sector will increase by 124,000 over the next six years; in the education sector, the number of new jobs is anticipated to increase by 11,000.62
Advancement
Target Gender Equality Programme The Netherlands Edition 2021
Target Gender Equality is a gender equality accelerator programme for participating companies of the UN Global Compact. Through facilitated performance analysis, capacity building workshops, peer-to-peer learning and multi-stakeholder dialogue at the country-level, Target Gender Equality will support companies engaged with the UN Global Compact in setting and reaching ambitious corporate targets for women’s representation and leadership, starting with the Board and Executive Management levels.
Companies participating in Target Gender Equality have the opportunity to deepen implementation of the Women’s Empowerment Principles and strengthen their contribution to Sustainable Development Goal 5.5, which calls for equal women representation, participation and leadership in business globally. Companies will be equipped with the latest data and research supporting the business case for gender equality and gain insights from UN partners and experts on how to accelerate progress on gender equality.
Programme Benefits:
Confidently set ambitious and realistic corporate targets for gender equality demonstrating commitment and action to your employees, investors and other stakeholders
Understand your current gender equality performance through the facilitated use of the Women’s Empowerment Principles Gender Gap Analysis Tool
Engage in accelerated learning opportunities specific to your country context
Build a network of peers, UN partners and experts to support your gender equality strategy and work collectively to tackle persistent barriers to gender equality.
Showcase women in your company who are driving business success, sustainability and contributions to the Sustainable Development Goals (SDGs)
