MGI Research

The power of parity: Advancing gender equality in the Dutch labor market

Moving toward gender equality is not only a moral and social issue, it is also vital to the Dutch economy. A new Power of Parity report from the McKinsey Global Institute and McKinsey Netherlands, Capturing the potential: Advancing gender equality in the Dutch labor market, explores the economic potential of narrowing gender gaps in the Dutch labor market. Here’s a look at some of the main findings of our research:

  • The Netherlands scores well on several indicators of gender equality in society, such as legal protection and digital and financial inclusion of women. Women are also well represented in education, particularly those under 45 who tend to have higher vocational or academic qualifications than men. Nevertheless, there is also significant inequality on nine of the 15 gender parity indicators we examined, six of which relate to the labor market. On four, the Netherlands scores the lowest in Western Europe: number of paid working hours, average monthly income, representation in management positions, and students in STEM education. Women’s potential on the labor market remains significantly untapped; yet despite numerous initiatives from multiple agencies, recent progress has been limited.
  • Although the female share of participation in the Dutch labor market (46 percent) is in line with Western Europe (47 percent), women’s contribution to GDP is considerably lower (33 percent in the Netherlands versus 38 percent for Western Europe). This is mainly due to the lower number of hours worked by Dutch women—on average 27 hours per week, compared to 37 for men, and 31 for Western European women on average.
  • A self-perpetuating system underpins the specific Dutch context on gender equality. This has three dimensions that not only individually affect gender equality, but also seem to reinforce each other: 1) an uneven gender spread across sectors, with women in the majority in sectors with a large share of part-time jobs and a relatively low contribution to GDP per FTE; 2) unequal division of paid work and unpaid care between men and women, with a suboptimal support structure for combining work and care that disproportionally affects women; and 3) deeply embedded social norms that influence women and men’s choices in education, in the labor market, and in relation to care.
  • Yet a stronger position for women in the Dutch labor market could bring significant opportunities for individuals, specific business sectors, and the wider economy. It could strengthen the economic independence of women. Our analysis shows that 230,000 women could become economically independent if they were to work five more hours a week on average. Equally, expanding women’s contribution could be the key to solving growing labor shortages in the healthcare, education, and technology sectors—for instance, if women currently working part-time in healthcare and education would work just one extra hour a week, this could theoretically eliminate current shortages in those sectors. The same holds for shortages in technical sectors if the share of women rose by 2 percentage points. More generally, if women participated in the Dutch labor force at the rate of the country’s best-performing peers, this would add more than €100 billion to GDP. Realizing this potential requires substantial adjustment (and investments) in the labor market, education, and with regard to unpaid care.
  • There is no silver bullet for this complex, systemic problem—a breakthrough requires an integrated approach to tackle multiple dimensions simultaneously, with cooperation between government, employers and unions, businesses, social organizations, and academics. Six solution areas are identified that could help to achieve real progress. First, prioritize specific areas for attention and formulate ambitious, concrete objectives. Second, bring the supporting infrastructure for combining work and care up to the level of other Western European countries. Third, make it (financially) more appealing for women to work longer hours. Fourth, from primary school age onwards, provide high-quality information to boys and girls regarding study and career choices and their implications. Fifth, create a more positive image around themes such as working mothers, caregiving fathers and childcare, using inspirational role models. Sixth, alongside flexible working for both men and women, apply a lifecycle approach to allow both up- and downscaling hours over the course of a career, according to a person’s specific needs.
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