April 12, 2016 Print

Those who advocate egalitarian public policies often point to the expansive welfare states of countries in the Nordic region, which have a wide array of government-funded social services for residents of all socioeconomic classes and walks of life. An extensive social safety net can sound alluring, but a new book from Sweden-based Atlas Network partner Timbro, titled The Nordic Gender Equality Paradox, explains how these policies can have surprising unintended consequences — including hindering career prospects for women.

“The Nordic countries have for generations been admired for their gender-equal societies,” said the author of The Nordic Gender Equality Paradox, Dr. Nima Sanandaji. “Yet, it is not here, but rather in countries such Latvia, the United States, and New Zealand that women have the greatest opportunity to reach the top. The Nordic gender equality paradox has a simple answer: Large welfare states, originally thought to encourage women’s careers, are (un)intentionally holding them back. The Nordic Gender Equality Paradox convincingly shows that low taxes, small governments and free markets enable women to reach the top, whilst affirmative action policies fail to create meaningful change.”

Sanandaji, who has written two books and numerous papers on women’s career progress and entrepreneurship, cites many examples of policies common to Nordic countries that, despite their intentions, have the additional consequences of holding back women from success in business environments. These include:

  • High tax wedges make it costly to purchase services that alleviate household work, limiting women’s potential to combine full-time work with responsibility for household and family.
  • Generous benefit systems combined with high taxes reduce economic incentives for both parents to work full-time. The result is that many women work part-time. The Nordic welfare states correspondingly have many women working half-time at home and half-time at work.
  • The Nordic parental policies, based on generous payments for staying home with children, are another explanation for the difference in time invested in careers. Working fewer hours often removes the chances of reaching a top position for the individual.
  • Public sector monopolies/oligopolies in female-dominated sectors such as health care, education, and elderly care reduce women’s opportunities as both employees and entrepreneurs. Public sector monopolies and labor union wage-setting combine to create a situation where individual hard work and investments in education is given limited reward.
  • The social security insurance part of the welfare contract in the Nordics benefits employees at the expense of employers. This reduces the incentives for individuals to become business owners. In particular women, who on average are more reliant on the benefits provided by these insurances, are discouraged from transitioning to business ownership.

“In short, a survey of the current research literature teaches us that the Nordic gender equality paradox can be logically explained by the interaction of policies and culture,” Sanandaji concludes. “The Nordic countries should be admired for their egalitarian values and their long history of women succeeding in politics and academia. When it comes to the business world however, the policies in these countries effectively prevent women from reaching the top. It makes perfect sense that other parts of the world, with different policies, have greater success in this regard. It is certainly a shame that the long tradition of gender equality in the Nordics, stretching back to the time of the Vikings, is not allowed to blossom in full.”

Timbro has arranged for think tanks to purchase The Nordic Gender Equality Paradox at a discounted rate for bulk orders. For more information, contact Martina Stenström, publishing assistant for Timbro.