A comparative study of gender pay gaps in nordic countries and eastern european countries

Under the compressed wage structure and generous family policies, Nordic countries have been regarded as leaders of gender equality in terms of low gender pay gaps and high rates of female labor force participation; after the fundamental restructuring of the economic system in Eastern European countries, women have experienced a remarkable change with respect to the labor market positions and economic status facing the increased wage inequality and significant declines in labor force participation rates. The cross-country comparison of gender pay gaps is investigated using ESS2 (European Social Survey second round) data sets and econometric techniques for the selected Nordic countries and Eastern European countries. The results indicate the different characteristics in terms of the gender pay gaps and labor market situations in these countries. Some significant difference in gender pay gaps between countries has been found; however, the systematic pattern of significant difference in gender pay gaps between the two groups of countries does not exist. Besides, the negative correlation between gender wage gaps and female employment rates cannot be strongly supported by the evidence in this study and the positive relation between the wage distributions and the gender wage gaps can only be applied to the adjusted wage gaps between single men and women. The gender pay gaps in Nordic countries remain low level, but the negative effects of family-friendly policies and over-crowded public sector may have led to the relatively high family wage gaps in these countries. On the other hand, modest increases in wage inequality and the improved rewards to skills in the competitive markets which favor women employed in the labor markets perhaps keep the gender pay gaps modest level in the selected Eastern European countries. In addition, unexplained factors still account for a non-negligible proportion in gender pay gaps, which raises the consideration about the discrimination against women in the labor market among all the selected countries