Gendered career differences in the industrial sector of Finland

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Today, we discuss gendered career differences in the industrial sector in Finland. We pay particular attention to the connection these differences have with salaries and the gender pay gap. We based this discussion on a recent report by the Ministry of Social Affairs and Health. 

In the report, Antti Kauhanen of ETLA takes us through previous research on this topic in the field of economics. Pekka Laine of Statistics Finland, in turn, reports on the results of the actual analysis.

This report is the first of two related to the Ministry’s research project Työurat ja ammattisegregaatio sukupuolten palkkaeron taustalla [Careers and job segregation behind the gender pay gap].  This project tries to understand what kind of effects career progression and chances in occupational structure have on the gender pay gap. The aim is to provide information with which to develop careers and occupational structures in a more equal way. 

The first part of the project looks at the gendered career differences in the industrial section of Finland. In particular, it looks at the career and salary development of men and women in the Finnish industrial sector between 2002 and 2020. 

The second part looks at changes in occupational structure and gender segregation, and their effects on the gender pay gap in private, municipal, and government sectors in Finland. The second part of the study will come out later. 

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Background to the study

This study looks at women and men who got their first full-time job in the industrial sector in Finland between 2002 and 2020. It tracks their career progression during that time and examines the associated developments in their monthly salary. 

The data include almost all of the private industrial sector employees in Finland who worked in a company employing more than 5 employees and who earned a monthly salary.

Depending on the year and the particular field of industry, information on 55-75 % of all industrial sector employees employed during the fourth quarter of each study year is included in this study. Thus the results of the study describe the whole Finnish industrial sector between 2002 and 2020.

The researchers have information on the jobs these employees had, the salaries they made, and their demographic characteristics such as age and educational background. 

The researchers grouped occupations into 4 hierarchical groups with group 4 being the highest hierarchical level: 

OccupationHierarchical level
Technicians and associated professionals3
Clerical support workers2
Service and sales workers2
Crafts and related trade workers2
Plant and machine operators, and assemblers2
Elementary occupations1
A modified version of Table 1. of the report (see p. 23)

This grouping becomes relevant in our later discussion. 

The study begins with the examination of the start of the working careers of men and women in the industrial sector in Finland. The aim was to discover whether there are clear gendered differences in the types and level of jobs with which women and men start their careers. They also wanted to know to what extent such differences contribute towards a pay gap between women and men already at this stage. We’ll go into this discussion next. 

Gendered career differences in the industrial sector of Finland at the beginning of their careers

They discovered that women and men start off their careers at different hierarchical levels. Women are more likely to start their careers at lower hierarchical levels than men. Women’s chances of starting their career at the lowest hierarchical level is 2.9 percentage points higher than men’s. They are also 3.1 percentage points more likely than men to start their career at the second lowest hierarchical level. 

Men, on the other hand, are 3.8 percentage points more likely to start their career at level 3. At the fourth level, men have an advantage of 2.2 percentage points over women. 

These differences were statistically significant differences. They do, however, disappear when the researchers factored in men’s and women’s educational backgrounds.

Gendered educational choices of men and women influence the kind of jobs they are able to obtain. Men’s educational choices make them more eligible for jobs higher up in the occupational hierarchy. 

Thus, gendered differences in women’s and men’s careers do not start with their first permanent job. They appear much earlier in the educational choices women and men make. 

We don’t go deeper into this discussion here. We only want to point out that there’s been quite a lot of research into the gendered nature of educational choices, what influences those choices, and what should be done about them. This, for example, is one Finnish language source on the matter. 

Early career pay differences 

Examining the starting salaries of women and men in the Finnish industrial sector reveals that men’s monthly salary is 22.6 % higher than women’s already at this point. 

However, as we discussed above, men and women have different educational backgrounds. Because of this, they tend to start off with different kinds of jobs. Factoring in these differences shrinks the pay gap by 11.6 percentage points. 

Thus, just over half of the early career pay difference between men and women can be explained by educational differences and the resulting differences in first jobs. The impact of gendered educational choices is thus huge in terms of salary. And this effect continues in retirement with women’s smaller pensions

Factoring in differences in employer companies shrinks this pay gap by further 4 percentage points. In their final analysis model, the researchers controlled additional variables and reduced the gap by 3.6 percentage points further. They were left with a 3.9 percentage point difference between men’s and women’s monthly salaries they could not account for. 

Thus, the unexplained pay gap between men’s and women’s monthly salaries is 3.9 % in the Finnish industrial sector. 

Gendered career differences in the industrial sector of Finland later on in men’s and women’s careers

In this part of the study, the researchers analyzed the career progression probabilities of men and women in the industrial sector in Finland. They controlled as many variables as possible thus comparing women and men similar to each other in terms of, for example, educational backgrounds.

Their analysis shows that advancing in the occupational hierarchy is less probable for women than men. Women’s promotion probability was higher than men’s only when looking at the hierarchical level 1. But then this difference, however, was not statistically significant. 

The difference in the probability of gaining a promotion between women and men was largest when moving from level 2 to level 3. Then, men’s probability of gaining promotion is 3 percentage points higher than women’s. Advancing from level 3 to level 4 was, however, only 1.6 percentage points more probable for men than for women.

Advancement from level 2 to level 3 professions thus seems particularly hard for women. The researchers show that although women are proportionally more likely to work in professions belonging to level 2, men are overrepresented in those moving from then to the 3rd level. 

Even in occupations where women have the highest probability for advancement (such as clerical workers), men are still more likely to advance in those as well. For example, 76.6 % of accounting and bookkeeping clerks are women. However, only 67.4. % of accounting and bookkeeping clerks gaining a promotion are. 

The researchers have thus located the proverbial glass ceiling between level 2 and 3 jobs. This means women hit the glass ceiling when they try to advance from such jobs as clerical support or service and sales workers to technicians and associated professionals. 

Salary effects of moving from one hierarchical level to another

In examining gendered career differences in Finland, the researchers also looked at the effects of career transitions on the salaries of men and women. They looked at both upward and downward career moves. Again, they compared comparable women and men to each other. 

In general, moving up in the occupational hierarchy brings with it an increase in salary. Conversely, going down means a decrease. However, the size of the increase or decrease varies depending on the gender of the person. 

Whereas men can expect their salaries to increase by 5.3 % when they move up, women can only expect an increase of 4.4 %. Thus, when men are moving up their salaries rise by 0.9 percentage points more than women’s. This is the case when they stay with the same employer. 

Both can expect a larger increase in salary if they also change employers. In this situation, men can expect a 6.9 % increase and women a 6.2 % increase. Thus, men’s salaries increase 0.7 percentage points more than women’s in this situation. 

They also found that women are penalized more than men when they move to a lower hierarchical occupational position. Women’s salaries decrease 1.7 percentage points more than men’s if the employer stays the same. If they change to a lower occupational position and also their employer, women’s salaries decrease 3 percentage points more than men’s. 

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