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Charmaine Cozier
Welcome to the inquiry from the BBC World Service. Hi, I'm Charmaine cosier. Each week, one question, four expert witnesses, and an answer June 2023 Belgium from its headquarters in Brussels, European Union member states adopt a legally binding objective, the EU Pay Transparency Directive. It aims to narrow the difference in average pay earnings between men and women. That measurement is known as the gender pay gap. Member states get to decide how to achieve that objective. The directive also has to be incorporated into their national laws. The deadline for that to happen is June 2026. The EU Pay Transparency Directive is ambitious and wide ranging. It's also reliant on openness, employer accountability and tackling ingrained causes. So this week we're asking, can Brussels crack the gender pay gap?
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Bridging the gap
Emma Duchini
the gender pay gap could be defined in different way, but the traditional way to define that is the difference in median pay between men and women in institution, let's say a firm. But it could be actually across worker in a certain occupation or across workers in a certain industry.
Charmaine Cozier
Emma Duchini is an assistant professor in the economics department at the University of Essex in the uk. Before we dive deeper into the gender pay gap, it's important to be very clear about what it isn't. It's not the same as equal pay.
Emma Duchini
Yes, it is a different thing because when we talk about equal pay, we really refer to considering two workers in a specific firm doing exactly the same job and comparing their salary in that specific job. The gender pay gap. We are considering many more workers. We are not considering exactly the same task. There is no requirement for that. There might be a gender pay gap, let's say, in a firm, but that may be driven by the fact that men and women are doing different jobs and not necessarily by the fact that men and women in exactly the same job are paid Differently.
Charmaine Cozier
So the gender pay gap is a much broader measure. According to the European Union's own Eurostat data for 2024, the gender pay gap for the was 11%, meaning women on average earned 11% less an hour than men. The Pay Transparency Directive aims to reduce that gap. It also applies to non EU country employers with workers in the region.
Emma Duchini
The first requirement is for all firms of any size to publish either starting wages or a salary ban in jobed. Second requirement is salary history band, which means that firms in a job interview cannot ask about previous salaries to employees. Third requirement, firms above a certain size in terms of employee number, so 250 every year, 100 every three years. They will have to publish information on the gender pay gap, both median and average, as well as the gender gap in who get bonuses.
Charmaine Cozier
The hope is that increasing employee compliance and accountability will accelerate narrowing the gender pay gap. But questions remain about whether the EU Directive can deliver on expectations.
Emma Duchini
There are other countries that over time have introduced other types of transparency. Denmark, France, Spain, Italy and Austria. In different ways, the effects have been different across countries precisely because of the details of this policy, whether firms compliance was checked. The case of Italy firms compliance was never checked. And so very little evidence that this policy has led to anything. Which suggests again that the public availability of this information may help magnify firms accountability. And so it's actually a good sign that the EU directive imposes publication of the gender pay gap statistics. The firms have to make them publicly available.
Charmaine Cozier
In 2011, Austria passed a law for all employers to include minimum salary details in job ads. Slovakia has had a similar law in place since 2018.
Emma Duchini
The paper that studied this policy shows that the policy leads to a 3% increase in salaries of new hired employees, but no reduction in the gender pay gap. And this effect of salary increase seems to come from an increasing competition across firms because some firms get more attention and so other firms may try to compete with them by increasing entry supply. This is the evidence that comes from Slovakia. I wouldn't expect huge effect in terms of reducing the gender pay gap from this part.
Charmaine Cozier
There are also concerns that pay transparency might have an unintended consequence slowing down wage growth for men.
Emma Duchini
And this seems to be due to the fact that under paid transparency employer may actually go during a salary negotiation with high paid employees which tend to be men. They might say look, I cannot increase your salary because if I do so that information is publicly available, I will have to do the same for women or for lower paid employees. So these sort of policies tend to give more bargaining power to firms, even if that is not actually in the initial intention of the legislature. It is not clear that providing information on salary in job ads will help in any way to reduce the gender pay gap. So I'm not very optimistic about the effect of this policy and I think that all of these effects have to be stressed all the time.
Charmaine Cozier
Our next expert witness can tell us about the causes of the problem that Brussels is trying to crack.
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Part 2 A woman's work what the
Marianne Bertrand
data reveals is that if you look at higher status occupations in the economy, so think about lawyers, think about bankers, think about doctors, you tend to find larger pay gaps in those occupations than in lower paying occupations.
Charmaine Cozier
Marianne Bertrand is a professor of economics at the Booth School of Business at the University of Chicago in the U.S. her expertise includes labour markets.
Marianne Bertrand
The nature of compensation in these occupations first often go with high rewards for being willing to work long hours. And men tend to be able, I would say, to work long hours more than women. And women, for reasons have to do with obligations that they have outside of the workplace, often definitely take time off at a higher rate than men. And these two factors explain a big part of the gender gap in these higher status occupations.
Charmaine Cozier
One of the hardest pay gap elements to crack is gender norms, those cultural and social expectations of how men and women should behave like male leaders or female primary caregivers. So maternity impacts all pay levels.
Marianne Bertrand
It affects it tremendously. I can take the example of a country where one of the first studies of this type took place, which was Denmark. What they did in this work though is essentially documenting that you could account for essentially all, all of the gender pay gap in Denmark by taking this motherhood penalty into account. So essentially what you find is that when a woman becomes a mother, her earnings drop. Women change occupations, move from the private sector to the public sector, move into part time work that explains a big drop in the earnings. Nothing happens to men when they become fathers.
Charmaine Cozier
Limiting or excluding women from education used to be a major gender pay gap expander.
Marianne Bertrand
But throughout the developed world, and really like nearly now throughout the world, women are completing more years of education than
Charmaine Cozier
men and the gender pay gap persists. So what's going on there, where they
Marianne Bertrand
are still kind of very different for men is on the choices of education tracks that they pick. So there's a massive underrepresentation of women in the STEM fields.
Charmaine Cozier
STEM is science, technology, engineering and maths.
Marianne Bertrand
We know that they are doing as well as men on kind of math tests. So my kind of preferred explanation has got to do with, you know, with stereotypes. I think we have this view that all of the mass geniuses are men and maybe women have internalized those stereotypes and are staying away from those fields. But this is, I think, one area on the education front where we need much, much more progress.
Charmaine Cozier
But as the way we work continues to evolve, what might that mean for employees currently on the wrong side of the gender pay gap?
Marianne Bertrand
There's so much uncertainty about the future and what the jobs of the future are going to be. So I think that's going to be interesting to see how it plays out. So I mean, the rise of AI may make a set of jobs that have been some of the highest paying jobs much less kind of rewarding going forward. So think about all these STEM careers, for example, that should be hurting men more than would hurt women. I'm not sure that's a good thing, but I'm just trying to think about what this would mean for the gender pay gap. I would try to think about the places where the machines and the robots and the artificial intelligence is going to be less able to replace human. And that would be, I think, in occupations that are really based on human interactions. So think about nurses and aspects of healthcare, for example, which are areas where women tend to be more represented. So I would think that that could be good for women.
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Charmaine Cozier
You're listening to the Inquiry from the BBC World Service. Just before we get an African country's perspective on the complexity of narrowing the gender pay gap. If you want to check out our past episodes including why is Poland's economy booming? Or is it time to copyright your face, search for them in the Inquiry feed wherever you get your podcasts. Thank you. Now let's Hear from our third expert
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witness, Part 3 the full story I
Adamnish Begale
think it's really important when we talk about Namibia not to oversimplify the story.
Charmaine Cozier
Adamnish Begale is head of Gender at the African Centre for Economic Transformation, a Pan African policy institute.
Adamnish Begale
Namibia ranks among the top countries in the continent and even globally on gender equality, and we assume that means inequality has disappeared. And that's not just really the whole story. Namibia has made big progress over the last decade or so too. That's a major achievement and definitely, certainly it reflects real gains in women's political representation, education and parity, and participation in public Life.
Charmaine Cozier
Back in 2002, the ruling SWAPO party introduced a system that required equal gender representation across government.
Adamnish Begale
What Namibia does have is a broader legal and policy framework around equality and non discrimination generally, including labor protections and affirmative action legislation, particularly through the Affirmative Action act they had, which is a little bit old, but it's still functioning, which were originally designed to address historical inequalities in employment and representation. So I believe that the foundation for thinking about workplace inequality already exists.
Charmaine Cozier
The Affirmative Action Employment act has been in place since 1998. It covers equal opportunities relating to gender, race and disabilities.
Adamnish Begale
But when we see the gender pay gap, we see that it still exists. And data also shows that Namibia still has a big pay gap, mainly around 13% of GAAP hourly and 18% of GAAP monthly. Which tells us that the labor market inequality still remains persistent even while the headline indicators improve. But the monthly gap is the most important for us to understand what really is going on, because here the data shows us that it's higher more because of less working hours, interruptions within employment and care work. So even if obviously wage discrimination declines, the pay gap can remain because the labor market itself is gendered, right.
Charmaine Cozier
Namibia isn't alone there.
Adamnish Begale
But if I can take Ethiopia, maybe because I'm based in Ethiopia. Ethiopia is actually a really interesting comparison because like Namibia, it shows both visible progress and deep structural challenges existing at the same time. The country had a reform in 2018 similar to Namibia and drew a lot of international attention because women suddenly became much more visible at highest levels of the state. Our last president was a woman. Women become chief of justice and women hold key ministerial posts. Representation matters because it changes expectations, it changes culture, and it changes who is involved in decision making.
Charmaine Cozier
But political representation doesn't mean economic benefits for women will follow.
Adamnish Begale
Ethiopia still has major gender inequalities economically, especially around informal work, unpaid care, burdens, ownership of assets. And this is where the gender pay gap conversation becomes important. It doesn't always have the same level of wage gap reporting data you see in some advanced economies, but the broader labor market patterns are very clear and
Charmaine Cozier
so is the impact on a country's finances.
Adamnish Begale
I think sometimes people hear gender pay gap and assume that it's only about fairness, but it's actually, actually deeply connected to economic performance. Right? When women are underpaid, excluded from higher productivity sectors, or concentrated in vulnerable work, insecure work, economies are essentially under using a huge share of their talent and labor force. That affects productivity, that affects innovation, it also affects tax revenue and long term growth. So for me, this is not just about fairness. It's also about how economies use and reward human capabilities. And I think Namibia is considering that as a big question because the gender pay gap is like a signal tells whether economic transformation is being shared broadly or whether growth is still reproducing older inequalities.
Charmaine Cozier
Underneath a lot of that inequality is rooted in a large unregulated labor force.
Adamnish Begale
We're talking about small farming, domestic work particularly. And that matters because many labor protections are designed for formal jobs, right? Jobs with contracts, payroll systems, employers that can be monitored. But for many women, work simply doesn't look like that. So the issue is often bigger than wages alone. It's also about job quality, stability, time protection. To be honest, this is why the gender pay gap conversation in Africa has to be broader than simply asking whether men and women receive the same salary. It's much, much deeper than that. In many cases, the deeper question should be whether women are able to move into more secure, productive and better paying parts of the economy in the first place.
Charmaine Cozier
In March 2025, President Nande Ndaitwa was sworn in as Namibia's first female President. Her vice president and the speaker of the national assembly are also women.
Adamnish Begale
For me, I think Namibia is well positioned for that conversation because the country already has relatively strong discussions around equality compared to many countries in the region. But I don't think that it has reached the point where we can confidently say that the pay transparency is working well. I do believe that the next step is really moving from these broad equality commitments towards more detailed labour market accountability and reporting systems, which then can be able to address the pay transparency issue.
Charmaine Cozier
Time to head back to the European Union where member states are not united when it comes to narrowing the gender pay gap.
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Part 4 EU issues well, Estonia do
Marina Trodostup
have statistically the largest gender pay gap in European Union yet. I would want to mention that the Eurostat number is around 18% in the year 2024, but that is not way too far from the other countries of the second and third place because the gap has narrowed dramatically in the last decade.
Charmaine Cozier
Marina Trodostup is a Labour economist at Austin, Austria's Vienna Institute for International Economic Studies and a country expert for Estonia. Just behind Estonia's 18.8% on the Eurostat gender pay gap ranking of the Czech Republic on 18.5% and Austria with 17.6. Remember, the EU average is 11%. The gender pay gap can be calculated in different ways which will produce different results.
Marina Trodostup
Some of the key sectors are filtered out. Mainly the public sectors are not included. So that explains a lot because the gap is largely concentrated in some sectors and those are mainly private sectors, high tech technologies. This is where we do see the highest gender pickup in the country.
Charmaine Cozier
Estonian government statistics revealed its lowest ever gender pay gap of around 12% for 2025. Increasing minimum wage and a flexible parental leave system. Are some structural changes driving that? Could you explain for us Estonia's position on implementing the EU Pay Transparency Directive?
Marina Trodostup
Well, this is a fairly complex position because everyone is aware about this backslash from the government, from the ruling coalition, because it was all around the media.
Charmaine Cozier
Member states which missed the June deadline for moving the Pay Transparency Directive into their national law can be fined by the eu. The backlash involved Estonia's Minister for Economic affairs and Industry saying his country would prefer to pay that to spare businesses and entrepreneurs from spending more time and money on complying with the new measures.
Marina Trodostup
The directive is largely viewed as a huge bureaucratical obstacle for the businesses because while we know that it will put a lot of pressure on the employees on disclosing the gender pay parity or this parity, it also puts a lot of pressure in terms of the Job classifications, a very detailed description of the job profiles of the tasks, which is not very easy to achieve for small and medium enterprises. And Estonia is the country with a fairly large share of small and medium enterprises. Estonia is one of the least bureaucratic countries in the EU and well, maybe worldwide as well. And this directive adds layers of bureaucracy.
Charmaine Cozier
Critics of bureaucracy say it slows down getting things done for officials and citizens who need to connect with government departments. Estonia disagrees with the EU Pay Transparency Directive, but not all of it.
Marina Trodostup
The disclosure of information about the average wage across men and women, for instance. So this sort of on increasing transparency, those steps are or they are in the process to be implemented as soon, as soon as possible. So I wouldn't say that the government is 100% against the direct believers, largely is against some of the points which are heavily administrative and they require more of the bureaucratic procedures which other EU
Charmaine Cozier
member states are resisting applying the EU Pay Transparency Directive.
Marina Trodostup
Oh, this is a very interesting case because another country which heavily against that is Sweden. And surprisingly we do have a very interesting picture here because on one hand we have Estonia with the highest gender pay gap in the EU and on the other hand we have Sweden which is the most gender equal country in the eu. So they are from the two completely opposite sides of the axis. It's not on the cost being non important and of any other arguments, it is purely on the implementation, especially on the parts which do require more of the bureaucratic procedures and administrative pressure on the employers. So those, I think the Estonia and Sweden, there are two currently countries which they have the most loud arguments against the directive and they are fairly different. And that makes the whole story very, very complex and very interesting.
Charmaine Cozier
If the Directive isn't fully implemented in all the states that belong to the eu, how much of a setback might that be for narrowing the gender pay gap?
Marina Trodostup
It is meant to be a universal policy for our countries, which is essentially also a little bit of an issue. There is a clear political argument why it should be universal for the Union. On the other hand, there are also good economic reasons to say why this is not necessarily good, because all countries are nonetheless different. Although they are all European countries, they are very different in their economic history. They are very different in terms of, in their labor markets and they are very different in the, in the skill shortages and the extent of those. So this is all a very valid argument to see why a universal directive is not necessarily a very good solution to trace and to narrow down the gender pay gap.
Charmaine Cozier
So back to our main Can Brussels crack the gender pay gap? Not completely. That's not to say that the directive won't be effective. With its combination of openness and more accountability for employers, including the risk of public naming and shaming, the EU gender pay gap had been improving long before the Pay Transparency Directive was adopted. None of that has been easy, but progress has been slow because structural factors like the motherhood penalty are the hardest to remove. EU member states, including ones that disagree with some of the directive, already have separate national laws in place, so it might be tricky to know whether those or the newer measure is behind future reductions. Other problems linked to the gender pay gap also need to be addressed, like gender balance, gender inequality and equal pay, so expect to see more narrowing but not full closure. Thank you for joining us on the Inquiry from the BBC World Service. If you'd like to hear another work related episode, search for why is basic income being debated in the Inquiry? Podcast feed wherever you get yours and tap subscribe for new episodes. Thank you. This episode of the Inquiry was written and presented by me, Charmaine Cozier. The producer was Evie Yabsley, researcher Amelia Cox, editor Tom Bigward and Technical producer Toby James.
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Podcast: The Inquiry
Host: BBC World Service / Charmaine Cozier
Episode Date: June 16, 2026
Main Theme:
This episode explores whether the European Union's ambitious Pay Transparency Directive can meaningfully narrow the gender pay gap across member states. Through four expert witnesses from Europe, Africa, and the US, the show delves into what the gender pay gap really is, why it persists, the challenges of enforcing transparency, and the limitations of both law and policy.
“The gender pay gap… is the difference in median pay between men and women in an institution… across workers in a certain occupation or industry.”
— Emma Duchini [01:57]
“These sorts of policies tend to give more bargaining power to firms, even if that is not the initial intention of the legislature.”
— Emma Duchini [05:58]
“If you look at higher status occupations… you tend to find larger pay gaps in those occupations than in lower paying occupations.”
— Marianne Bertrand [06:57]
“When a woman becomes a mother, her earnings drop… Nothing happens to men when they become fathers.”
— Marianne Bertrand [08:01]
“It’s bigger than wages alone… The deeper question should be whether women are able to move into more secure, productive and better paying parts of the economy in the first place.”
— Adamnish Begale [17:19]
“When women are underpaid… economies are essentially underusing a huge share of their talent…”
— Adamnish Begale [16:15]
“There are also good economic reasons… all countries are nonetheless different… their economic history, their labor markets, and their skill shortages…”
— Marina Trodostup [23:38]
Broad EU ambitions face fractured realities, as the gender pay gap’s roots run deep in social norms, economic structures, and persistent motherhood penalties. While pay transparency and legal measures can help, their effectiveness is ultimately limited by how they are enforced, what they actually require, and the structural changes left unaddressed. True closure of the gender pay gap will involve more than transparency; it will demand cultural change, better data, and proactive support for women’s full participation, especially in high-reward sectors and throughout the career lifecycle.
Final Thought:
Expect gradual progress, not instant transformation—transparency is necessary, but not sufficient, for closing the gender pay gap across Europe and beyond.