Investigating the gender pay gap in the Maltese financial and insurance sector: a macro and micro approach

• Date: 22 August 2023
• Pages: 93-113
• DOI: https://doi.org/10.1108/EDI-02-2022-0038
• Published date: 22 August 2023
• Author: Maria Farrugia,Anna Borg,Anne Marie Thake

Investigating the gender pay gap

in the Maltese financial

and insurance sector: a macro

and micro approach

Maria Farrugia

Department of Public Policy, University of Malta, Msida, Malta

Anna Borg

Centre for Labour Studies, University of Malta, Msida, Malta, and

Anne Marie Thake

Department of Public Policy, University of Malta, Msida, Malta

Abstract

Purpose –Although women have advanced in the economic sphere, the gender pay gap (GPG) remains a

persisting problem for gender equality. Using Acker’s theory of gendered organisations, this study strives to

gain a better understandingfrom a macro and micro approach, how family and work-related policies, especially

family-friendly measures (FFMs), and their uptake, contribute and maintain the GPG in Malta and specifically

within the Financial and Insurance sector.

Design/methodology/approach –Two research instruments were used. National policy documents were

analysed through the gender lens, followed by structured interviews with HR managerial participants within

this sector.

Findings –Findings suggest that at a macro level, family and work-related policies could be divided into two

broad categories: A set of family-friendly policies that contribute to the GPG because of their gendered nature,

or because the uptake is mostly taken by women. These include make-work pay policies, which initially appear

to be gender neutral, but which attracted lower educated inactive women to the Maltese labour market at low

pay, contributing to an increase in the GPG.Second, a set of policies that take on a gender-neutral approach and

help reduce the GPG. These include policies like the free childcare and after school care scheme that allow

mothers to have a better adherence to the labour market. At the micro level within organisations, pay

discrepancies between women and men were largely negated and awareness about the issue was low. Here,

“ideal worker”values based on masculine norms seemed to lead to covert biases towards mothers who shoulder

heavier care responsibilities in the families and make a bigger use of FFMs. Because men are better able to

conform to these gendered values and norms, the GPG persists through vertical segregation and glass ceilings,

among others.

Research limitations/implications –Since not all the companies in the Eurostat NACE code list

participated in this research, results could not be generalised but were indicative to future large-scale studies..

Practical implications –At the macro and policy level, some FFMs take on a clear gendered approach. For

example, the disparity in length between maternity (18 weeks) and paternity leave (1 day) reinforces gender

roles and stereotypes, which contribute to the GPG in the long run. While some FFMs like parental leave, career

breaks, urgent family leave, telework, flexible and reduced hours seem to take on a more gender-neutral

approach, the uptake of FFMs (except childcare) seems to generate discriminatory behaviour that may affect

the GPG. When considering the make-work pay policies such as the “in-work benefit”and the “tapering of

benefits”, this study showedthat these policies attracted lower educated and low-skilled women into the labour

market, which in turn may have further contributed to the increasing GPGs. On the other hand, the childcare

and after school policies relieve working mothers from caregiving duties, minimising career interruptions,

discriminatory behaviour and overall GPGs.

Social implications –This study confirmed that organisations within the Financial and Insurance sector are

gendered and give value to full-time commitment and long working hours, especially in managerial roles.

Managerial positions remain associated with men because mothers tend to make more use of FFMs such as

parental leave, reduced, flexible hours and teleworking. Mothers are indirectly penalised for doing so, because

in gendered organisations, the uptake of FFMs conflict with the demands of work and ideal worker values

(Acker, 1990). This maintains the vertical segregation and widensthe GPG within the Financial and Insurance

sector.

Gender

pay gap

93

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/2040-7149.htm

Received 12 February 2022

Revised 28 May 2023

Accepted 20 July 2023

Equality, Diversity and Inclusion:

An International Journal

Vol. 43 No. 1, 2024

pp. 93-113

© Emerald Publishing Limited

2040-7149

DOI 10.1108/EDI-02-2022-0038

Originality/value –By using the gender lens and taking a wider and more holistic approach from the macro

and micro level, this study highlights how interlinking factors lead to and sustain the GPG in the Financial and

Insurance sector in Malta.

Keywords Gender, Pay gap, Gendered roles, Work-related policies, Family-friendly measures,

Financial and insurance sector, Malta

Paper type Research paper

Introduction

Despite significant advancements in women’s economic status in recent decades, gender

disparities in the workforce continue to exist (Ponthieux and Meurs, 2015). OECD studies

have found gender disparities in wages, participation in the workforce and representation in

managerial occupations in both the private and the public sectors (Downes et al., 2017).

Overall, females still earn a lower pay when compared to males. Such disparities tend to echo

societal and traditional inequalities within cultural roles and assumptions of males and

females (Downes et al., 2017) which impact earnings.

Gender pay gaps (GPGs) are defined as the difference in wages amongst females and

males (Stats NZ, 2018). The European Union (EU) uses the “unadjusted GPG,”which

measures the discrepancy between the average hourly income of males and females

(European Commission, 2017), to formulate appropriate policies. The GPG is calculated by

using the following equation (see Figure 1,European Commission, 2017).

According to Eurostat (2017), men’s gross hourly pay was on average 12.7% higher than

those of women across the EU. In 2021, Malta’s GPG was below the EU average at 10.5%

(Eurostat, 2023). The Financial and Insurance sector in Malta had the GPG of 24.1%

(Eurostat, 2023).

Several theoretical explanations have attempted to figure out the cause of the wage

disparity amongst males and females (Anderson et al., 2001). The GPG varies at different

ages, levels of educational attainment and occupation (Miller and Vagins, 2018). An NSO

study (2018) carried out in Malta which utilised 2014 data found that the GPG continues to

increase as people get older, and women between the ages of 35 and 44 years experienced the

biggest GPG of 14.1%. For those with tertiary education the GPG stood at 18.7%, compared

to the GPG at basic education level (10.3%). Several empirical studies suggest that mothers

experience a higher GPG when compared to females with no children as well as males (Benard

and Correll, 2010). This is the motherhood pay penalty, and evidence of this inequality has

been confirmed across several countries (Blau and Kahn, 2017). The disproportionate divide

of childcare and household responsibilities on mothers contributes to the economic outcomes

of males and females, especially in wages. Such inequalities are generally entrenched at the

starting point of policy making (Downes et al., 2017).

Pay discrepancies affect financial income, standard of living and overall well-being

(Daczo, 2012). They also influence females in their working life. Employers use women’s

previous wage history to establish their salaries in new jobs, often transmitting

discrimination from one job to the next (Miller and Vagins, 2018). The GPG also affects

women once they retire (Pham et al., 2018). Women over the age of 65 years earned retirement

pensions, which were on average 30% less when compared to men’s pensions in 2018

(European Parliament, 2020). Malta had the second largest gender pension gap, which stood

at 42% (Eurostat, 2020). These statistics are concerning, particularly considering women’s

Figure 1.

The unadjusted GPG

EDI

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