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CLOSING THE GENDER PAY GAP: NOVATORE ACTION PLAN

The gender pay gap remains a pressing issue in Latvia where women earn significantly less than men-17.1%. According to, Makro Ekonomika, on average women earn less than men across all sectors, education levels, and job categories. Despite high levels of education and workforce participation among women, societal stereotypes and structural biases continue to hinder gender equality in pay. Addressing this issue is not just a matter of fairness; it is crucial for enhancing economic well-being, promoting sustainable economic growth, and ensuring competitiveness in the business sector. To combat this disparity, the Novatore working group has developed ten key recommendations aimed at reducing the gender pay gap in Latvia.


 


10 Recommendations to bridge the wage gap


The implementation of the recommendations lies in the purview of state, business, and individual levels.


State


1. Regularly publish information on the pay gap between female and male workers in every public and private sector company with at least 50 employees.


2. Regular inclusion and review of gender and pay discrimination issues in the National Human Capital Council's strategy, with a developed action plan.


3. Implement gender quotas in legislation for councils and boards.


4. Allow women to work until their child is 1.5 years old, receiving both the allowance and salary if they choose to work as well.


5. Ensure affordable access to kindergartens from 1.5 years of age.


Businesses


6. Gender balance assessment in companies


7. Track gender equality in pay


8. Promote Shared Childcare Responsibilities.


9. Transparent Salary Review Principles.


Individuals


10. The implementation is a collective effort that involves contributions from governmental, corporate, and individual stakeholders.


The Situation in Latvia


In Latvia, the gender pay gap is particularly pronounced. In 2022, women’s average hourly earnings were 17.1% lower than men’s, compared to an EU average of 12.7%.


Gender pay gap unadjusted


This disparity exists across all educational levels, sectors, and job categories. Despite women constituting, according to Oficiālās Statistikas Portāls, 54% of Latvia’s population and 64% of university graduates in 2023 they remain underrepresented in high-paying sectors and leadership positions. For instance, Eurostat found that only 24% of women are on the boards of large companies and 32% are in legislative roles.


Latvia's labour market is heavily segregated by gender. A low proportion of women work in higher-paid fields like information and communication technology.


The societal stereotypes that contribute to this pay gap start early. Despite girls performing equally well as boys in school subjects like mathematics and science, fewer girls pursue careers in these fields due to entrenched gender norms. Additionally, the unequal burden of unpaid care work further hampers women’s career progression. Women are more likely to take career breaks for childcare, which impacts their long-term earnings and career advancement opportunities.


The importance of equal pay and financial independence for women


According to the Organisation for Economic Cooperation and Development (OECD), gender equality in the workplace has been shown to positively impact economic growth. When women participate equally in the labour market, the talent pool expands, leading to increased productivity and innovation. According to a study by McKinsey and others, companies with higher gender diversity, especially at leadership levels, tend to perform better financially. This performance boost stems from diverse perspectives, which enhance decision-making and problem-solving.


Equal pay is a matter of social justice and equity. It recognizes the equal value of work done by women and men and addresses the systemic biases that have historically undervalued women's contributions. Achieving pay equity helps dismantle stereotypes and promotes a workplace culture of fairness and respect.

When women achieve financial independence, the benefits extend beyond the individual to families and communities. Financially independent women can invest more in their children's education and well-being, breaking the cycle of poverty and contributing to a more educated and skilled workforce in the future. Additionally, when both parents share financial responsibilities, it leads to more balanced and healthy family dynamics, where caregiving and professional aspirations are equally valued.


Closing the gender pay gap is a multifaceted challenge that requires concerted efforts from the state, businesses, and families. By adopting these ten recommendations, Latvia can move towards greater gender equality, enhancing the economic and social well-being of all its citizens.


 

Novatore is a strong advocate for gender equality, and women's economic empowerment actively working to address this issue through various initiatives. To support these efforts, a pay gap volunteer task force has been created within our community. 


Additionally, Novatore, in collaboration with Norstat, conducted research on stereotypes that influence the gender pay gap Novatore Gender Equality Barometer:


 

Writing credit: Krista Kalnberzina, Head of the Monetary Policy Analysis Department at The Central Bank of Latvia. 


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