Three years ago, PKF carried out a scientific study to find out why Malta has a low rate of female participation in the workforce compared to the EU average. It hoped to remove misconceptions on female roles in the economy among financial commentators. To do this it asked a number of stakeholders for their opinion after conducting one-to-one surveys and carrying out regression analysis based on data available in the public domain.
It is good to know that in most countries of the European Union, female employment rates have almost doubled in the past five decades. This may be the result of the Europe 2020 strategy, which aimed at achieving a 75 per cent overall employment rates for the 20-64 age group. In Malta, the trend is improving due to schemes launched by both political parties, not to mention millions spent in the provision of free national education for all.
In 2017, female activity rate edged up to 55.1 per cent compared to the EU average of 66.5 per cent. It is understood that when evaluating female participation in the workforce and parenthood, it is sensible to consider both part-time and full-time employment. Records show that in 2014, female part-time employees in Malta (aged 16 and over) were 28.1 per cent, as registered by Eurostat. To put this in context, the lowest number of female part-timers was registered in Bulgaria, being 2.8 per cent in 2014 with the highest rate of 72.2 per cent reached in The Netherlands, so our rate is comparatively low.
However, why is the female activity rate low when there are more females graduating from university each year? The answers can be wide and varied. In a study by Alakeson (2012), it was established that high part-time employment rates could be a result of strong economic pressure and lack of affordable childcare centres. The latter barrier has been ameliorated due to more free childcare centres opening in towns and villages. Booth and Van Ours (2010) succeeded in establishing that women with young children, aged between 0 and 4 prefer to work reduced hours, while mothers with children aged between 4 and 12 generally prefer to work normal hours. However, Buddelmeyer et al. (2005) had pointed out that it is generally difficult to return to full-time employment once individuals have been working part-time for some time. Furthermore, as shown in Blackwell (2001), when mothers return to the labour market, more specifically for a part-time job, they usually have to accept the fact that they will end up with a job which requires less skill than their former full-time job, and hence will not be using their full potential. In fact, the European Institution for Gender Equality (EIGE) plans to assist European institutions and European Union member states to introduce more gender equality at the workplace, stating that 'Equality between women and men is a fundamental value of the European Union'.
When compared to other EU countries, we always had a high gender employment gap, which is somewhat worrying. Indeed, although this gap has narrowed from year to year, being 44.9 percentage points in 2005 and slowly but surely decreasing to 28.4 percentage points in 2014, the latter figure is still high. That said, the gender gap registered for Italy was 19.4 per cent; considerably smaller than Malta's. The trophy goes to Finland, which registered the smallest gender employment gap in 2014 with 1.9 percentage points. Having achieved a low rate of unemployment, we need to increase both labour-force participation and raise the employment rate of women. This policy once attained will help us mitigate the social and financial risks of population ageing, which will reduce pressure on labour supply, with negative implications for material living standards and public finances.
The provision of paid maternity/parental leave helps to boost female labour force participation by enabling women to reconcile work and family life. Evidence also shows that effective protections against dismissal for pregnant workers or workers returning from leave can be important for retention in the labour market. A study by the European Central Bank showed that "a significantly higher proportion of female workers in Europe prefer inactivity and a significantly lower percentage prefer full-time over part-time employment" (Buddelmeyer, Mourre, & Ward-Warmedinger, 2005, p.4). The study also discovered that inactive females were more likely to remain inactive or take up a part-time job rather than engage in a transition from inactivity into a full-time job.
The PKF study interviewed a number of stakeholder institutions to get their views on the subject. At this juncture, one cannot but praise GRTU for sending questionnaires to members, and again Jobplus (ETC) helped us to collect data by providing a list of all the employment incentives currently in place for women. It is worth mentioning the novel idea of the Breakfast Club. It was recently introduced to help parents keep up with their working hours as it basically gives them the opportunity to leave their children at school one hour before school opens. Another incentive is the 'Klabb 3-16' which is an after-school hours care service provided to all children at subsidized rates.
Recently, a new benefit called 'Maternity Leave Benefit' encourages mothers to continue working. It is a scheme that has defined benefits for working women who recently gave birth. With this measure, women are entitled to paid maternity leave by their employer. This measure will continue to improve the maternal duties of women by establishing a 'Maternity Leave Trust Fund'. This will be set up so that all private enterprises will contribute according to the number of employees they have. This fund will help finance maternity leave, and the maternity leave benefit in the private sector will be paid through this fund.
It is no exaggeration to say that a lot of ingenuity has been employed to place a variety of incentives such as the 'In-Work Benefit' payable to eligible parents earning between €10,000 and €20,400 p.a. These parents are entitled to receive a maximum amount of €100 per child annually. In addition, any woman who is 40 or over and who has been inactive for more than five years can benefit if she starts working, as she qualifies for a reduction in income tax. Furthermore, any single parent who chooses to start working will be eligible to maintain 65 per cent of their unemployment benefits in their first year, 45 per cent in their second year and 25 per cent in their third year. As part of its corporate social responsibility, PKF intends to conduct another study to update findings revealed in its first report.
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Mr Mangion is a partner in PKF, an audit and business advisory firm.