Wales has risen to fifth place in PwC’s annual Women in Work Index, which assesses progress made towards achieving gender equality at work. The OECD Index assesses the performance of 33 OECD countries including the UK as a whole, while the UK regional Index assesses the performance of the UK’s nations and regions.

First launched in 2011, the Index is a weighted average of five indicators:female participation rates, participation rate gap, female unemployment rate, female full-time employment rate, and gender pay gap that reflect women’s labour market outcomes.

Wales’ improvement in the rankings is due to improvements across three of the five key metrics: the gap between male and female labour force participation fell by 1.1% pts to 6.4%; female unemployment fell by 1.3% pts to 2.6%; the gender pay gap narrowed by 0.7% pts to 10.9%. Although there was a decline in the rate of female labour force participation, it was a marginal drop (from 72.5% to 72.4%) and women in full-time employment fell from 60.7% to 58.5%.

Wendy Edwards, People Director at PwC, said: 

“It’s positive to see an uplift in Wales’ ranking and an overall improvement in gender equality in the workplace here, but it’s vital that organisations don’t lose their focus on continuing to narrow the gap.

“Alongside shorter-term levers like shared parental leave and flexibility around working hours and locations, along with a transparent approach to gender pay reporting, it’s vital that we attract and support women into high-paid sectors where they are currently underrepresented.

“Our approach to this starts early; in Wales, we run TechSheCan sessions in primary schools to encourage and empower more girls to pursue careers in technology, creating more space for women in these workplaces.”

The Index: how the UK is faring

The Index shows the UK has slipped from 13th to 17th in the OECD Index ranking – the largest annual fall in rankings experienced by any OECD country this year. The UK’s gender pay gap increased from 14.3% in 2021 to 14.5% in 2022 and is higher than the OECD average of 13.5%, Despite an increase in the UK’s OECD Index score by 1.1 points, reflecting small improvements on most indicators, its rank fell from 13th place to 17th place, demonstrating that the UK is being outperformed by other countries in terms of pace of progress made towards achieving gender equality at work.

Despite the fall in its ranking, the UK remains the top performing G7 country. However, Canada is closing the gap and is now only one place behind. While the other G7 nations have remained fairly consistent in their ranking, nations such as Australia have seen dramatic improvements. Indeed, Australia recorded the biggest annual improvement in its rank of any OECD country, rising from 17th place in 2021 to 10th place in 2022.

The ‘gender pay penalty’ in the UK

The report finds that, even after accounting for a range of pay-determining factors, the pay disparity between women and men in the UK still persists with women earning almost a tenth less than men on average.

This ‘gender pay penalty’ worsens with age, with women between the ages of 46 and 65 experiencing more than twice the gender pay penalty than that of women between 16 and 30 years. Indeed, while a woman entering the workforce faces a pay penalty of around 5.2% on average, this widens to nearly 13% as her career unfolds. The report highlights the ‘motherhood penalty’, with women taking on an unequal share of childcare responsibilities, as a key driver. This is compounded by men often having more time available to perform so-called ‘greedy jobs’, which demand unpredictable and longer hours and tend to be more highly paid. In addition, women between 46 and 65 are also likely to be impacted by health conditions and the menopause, which may require them to take more time off work, potentially affecting their career progression and compensation.

Strikingly, married women and those in higher income brackets also face a hit to their earnings when compared with men with similar personal and professional backgrounds – for example, people living in the same area and working in the same industry.

Addressing the gender pay penalty could unlock significant economic gains for the UK economy. If women no longer faced a gender pay penalty, the total increase in women’s earnings in the UK could be up to £55bn every year. Moreover, it could also encourage more women to join or rejoin the workforce – a 5% increase in the total number of women in employment could boost UK GDP by up to £125bn every year.