The final frontier: why are women further from labour parity in some non-metropolitan areas ?

OECD countries have made big strides in closing gender gaps in recent years. The gender wage gap has been closing and women’s employment is improving and recovered strongly, despite being initially hit hard by COVID-19. Women tend to have better reading performance at schools and there is a higher share of women than men among recent graduates.  Can place-based policies help us take the next step towards gender equality across regions? Is place the final frontier for gender disparities?

Gender parity is still far, far away

Despite recent progress and better educational outcomes, only two-thirds of working age women are active in OECD labour markets. They also suffer lower employment rates and wages than men. In all OECD countries, except for Switzerland, women have a lower share of self-employment. When women do start a business, their firms are less likely to receive investment. And women are still underrepresented in public leadership roles. In 2023, only around a third of parliamentarians and ministers were women, and only 5% of mayors.

The geography of gender gaps

There is also a distinct geography to the gender divide, and – perhaps surprisingly – for once it isn’t the big cities leading the way. In OECD countries, women are closer to achieving labour-force parity in the most remote regions. In those regions, the gap in workforce participation is half the OECD average. At the other end of the spectrum, there are 3 times as many women missing from the labour force in non-metropolitan areas close to small cities.

The gender gap in labour force participation is lowest in remote rural areas

Gender Difference in Labour Force Participation Rate

Note: Data in countries with a few missing years were extrapolated. Data was extrapolated for Switzerland in 2018-2020, Germany for 2020, Estonia for 2018-2020, the United Kingdom for 2010-11, Ireland for 2010-2011, Norway for 2020, New Zealand for 2020, Sweden for 2010-2012. Hungary and Denmark were dropped because they had less than half of the years of observation. Labour force participation rates refer to the number of individuals employed between 15-64 years old, as a share of total population between 15-64 years old. The female labour force participation rate refers to the number of women actively employed between the ages of 15-64, as a share of total female population between the ages of 15-64. The male labour force participation rate refers to the number of men actively employed between the ages of 15-64, as a share of the total male population between the ages of 15-64. The gender difference in the labour force participation rate is the difference between male and female shares (male minus female). The % change from 2010 statistic refers to the annual percentage change of the difference in the labour force participation rate of men and females, from 2010 (first year), to the referenced year.

Source: Author’s calculations based on OECD Regional Indicators.

This partly reflects demography – with the unique advantage of proximity to jobs, the natural amenities, and larger homes, suburban locations are particularly attractive to larger young families. For these young families the gender gap in participation yawns particularly wide.

While globally women aged 25-54 living alone have a high labour force participation rate of 82%, living with a male partner brings down women’s participation rate, and having kids brings it down further to just 48%. The opposite is true for men who have a participation rate of 97% when living with a partner and kids, and 90% of they are living alone.

Unpaid care work is still the main driver for women remaining absent from the labour-force with women remaining primarily responsible for child caring duties.

Women contribute more than 60% of the time devoted to housework and care, irrespective of their employment status, income or education levels. In European/North American Countries the labour force participation of women is reduced by 10 percentage points when they have a partner and kids.

Forthcoming work from the OECD on access to childcare facilities highlights the gap in accessing services to support work-life balance in non-metropolitan regions. While unpaid care work can be a choice, labour market features or lack of public services, infrastructure, family-friendly policies and cultural norms matter just as much.

Using the (labour) force

Local policies can boost female labour force participation where it is needed most. First, there needs to be a greater focus on investing in child-care provision in the suburbs. This can be challenging, as in less dense areas, demand can be spread wide across geographic location – and in the absence of scale, such services can be unprofitable.

One option is to develop a “shared-service” model for service delivery where a range of suburban services co-locate to reduce administrative and capital costs. In Wales, UK, Community Focussed Schools provide a range of services and activities, often beyond the school day, to help meet the needs of its pupils, their families and the wider community.

Second, suburban areas can boost efforts to support female entrepreneurship, which can provide a more flexible form of work for young mothers. The policies implemented include mentoring and entrepreneurship training programs for women who are interested in starting a business, as well as efforts to promote role models and peer networks. An example of this can be found in the South of Scotland Enterprise’s women entrepreneurship programme, and the Swiss Regional Innovation System’s new focus on women’s entrepreneurship.

Third, remote and flexible work arrangements should be encouraged to enable space for families (women and men) to better balance childcare responsibilities at home. The OECD found that many occupations that are amenable to remote working are also occupations with higher shares of women. In some countries, like the Netherlands, the right to remote work is now enshrined in law.

For remote work to work for women and families, access to reliable (and fast) internet connections is critical. Yet access to reliable and fast internet connections are still lacking in too many places, creating a loss of opportunities, in particular for women. More needs to be done to extend connectivity beyond city cores in many counties, to support women’s access to flexible and good quality jobs.

The final frontier?

There has been strong progress on national frameworks to promote gender equality in recent years. But to take us to the next level, and to truly level up, place may be the final frontier.

Efforts that are more targeted – particularly in meeting the needs of young mothers in the suburbs – could be particularly powerful in boosting the participation and unlocking the talent of the next generation of talented, educated women.

While we understand some challenges, there is still much room to further investigate how policies can address differences in opportunities for women across metropolitan and non-metropolitan regions .

Read more on the OECD work on the Rural Development.

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Michelle Marshalian is an Economist at the Regional Development and Multi-level Governance division of the Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) where she manages the OECD project on Enhancing Innovation in Rural Regions. She uses microdata for firm and labour analysis and develops partnerships for access to timely, and granular resources to fill the gap of information in data poor regions. In addition, she manages an advisory committee on rural innovation consisting of academics and industry representatives. Michelle previously taught advanced econometrics and impact evaluation for public policy making at Paris 1, Panthéon-Sorbonne, worked for the World Bank conducting Jobs Diagnostic reviews, managed government relations at the Business and Industry Advisory Committee to the OECD and held research positions at other research institutes in the US, UK and France prior to joining the OECD.  She holds a PhD in Economics from Paris-Dauphine (France), a dual Masters from the London School of Economics and Sciences Po, Paris, and a dual Bachelors of Arts and Sciences in Economics and International Area studies from UCLA.

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Lisanne RADERSCHALL is a Policy Analyst in Regional Development and Multi-level Governance Division - Regional and Rural Policy Unit of the Centre for Entrepreneurship SMEs, Regions and Cities of the OECD. Since joining the OECD in 2016, Lisanne has prepared advice to national and sub-national governments on rural and regional policies. She has conducted several reviews on multi-level governance systems for place-based policy making, covering topics such as Indigenous economic development, Island economies, mining  and climate change related challenges and opportunities in rural areas. She is currently leading the work on the OECD’s Rural Agenda for Climate Action and has also worked on the rural innovation project for Switzerland. Before joining the OECD Lisanne was set-up a social economy start-up in Berlin, which functions as a platform for migrant entrepreneurs, she also worked as a researcher at the Freie Universität Berlin (Germany) and with the private sector companies. Lisanne holds a Master’s degree from Freie Universität Berlin (Germany) and a Bachelor’s from the University of Maastricht (Netherlands) as well as the University of Sydney (Australia) in the fields of Sociology, Political Sciences and Foresight.