This chapter examines the opportunities and challenges for achieving gender equality in Austria and discusses the socio‑economic benefits of a more gender balanced labour market. It also provides an assessment of how foreign direct investment (FDI) contributes to gender equality, with a focus on employment, wages, skills development, career progression and entrepreneurship.
FDI Qualities Review of Austria
Closing Gender Gaps and Empowering Women
Abstract
Foreign direct investment (FDI) provides the technological and financial resources needed to stimulate productivity and innovation, support global value chains (GVCs) integration, create employment and encourage the low-carbon transition, as illustrated in Chapter 1. FDI can also advance gender equality in the marketplace of host countries by creating new and better jobs for women, and by supporting their career progression and participation in entrepreneurship. However, FDI is not always directed where it is most needed and its impact on gender equality is not automatically positive. Shedding light on these impacts is important to identify areas where the positive contribution of FDI on gender equality can be strengthened through targeted policy action. This chapter offers an assessment of gender equality in the labour market of Austria, focusing on opportunities and remaining challenges. Using data and indicators developed within the FDI Qualities Initiative (see Chapter 1, Box 1.1), it also provides a detailed analysis of the role that FDI and foreign firms play in promoting Sustainable Development Goal (SDG) 5 on gender equality and the empowerment of women and girls. Key findings include that in Austria:
Women participate less in the labour market, work fewer hours and take on most of the unpaid work. The percentage of women participating in the labour force is lower than that of men (in 2021, 72.6% for women compared to 81.9% for men), although higher than the OECD average (64.8%). The difference between the percentages of women and men working part-time is also considerable: in 2021, 35.6% of women had part-time jobs compared with 8.5% of men. The percentage of women with part-time jobs is among the highest in the OECD area (lower only than the Netherlands, Switzerland, Japan and Germany). Gender imbalances also persist in unpaid work, with women bearing a disproportionate share of domestic work and the care of children and the elderly.
Women who participate in the labour market do so under worse conditions than men. Women are paid less than men in all sectors (in 2020, the hourly wage gap was 20%, one of the highest in the OECD area) and, they are more likely to have non-standard employment contracts and to occupy unskilled positions. Like in other OECD countries, they are over-represented in services and under-represented in manufacturing and construction. Furthermore, the career prospects of men and women are uneven, as evidenced by the low percentage of women in management positions (35.5% of managers were women in 2021, a slightly higher share than the OECD average of 33.7%). Few women also choose to become entrepreneurs (in 2020, only 2.4% of women were entrepreneurs with employees, compared to 6.4% of men).
Patterns of gender inequality in the labour market originate in the education system. Although participation levels in education are similar or even in favour of women, there are marked differences between women and men in academic achievement and choice of fields of study. According to the latest OECD PISA results for 2018, girls’ reading skills exceed those of boys, but boys perform better in mathematics. Men tend to prefer scientific and technology fields, while women choose business, law, education, and health.
FDI contributes to the development of sectors with a good gender balance in terms of labour force participation, but with high gender wage gaps. FDI is concentrated in services, particularly professional services, finance, trade and real estate, and manufacturing. Apart from manufacturing, these sectors employ an equal share of women and men or slightly higher share of women. Sectors that attract a significant amount of FDI, including those with a good gender balance in employment, are characterised by high gender wage gaps.
Greenfield FDI is concentrated and has a larger employment impact in sectors that employ relatively more men than women. Greenfield FDI is prevalent and has a larger employment impact in sectors with a higher share of men, namely construction, motor vehicles, electronics, machinery and equipment, transport, and information and communication. These sectors are also characterised by particularly low levels of female labour force participation, indicating that the job opportunities created by greenfield foreign investors are likely to benefit men more than women.
Foreign firms employ on average a lower proportion of women than domestic firms. Especially in plastics and rubber, food, computer activities and construction, foreign firms have on average a lower percentage of women in their workforce than domestic firms. These sectors are characterised by particularly low levels of female labour force participation (below 30%), which can make it difficult for foreign firms to recruit and retain female talent. Both foreign and domestic companies have significantly higher shares of women in the hospitality, paper and chemical sectors.
Foreign firms pay on average higher wages than domestic firms. Foreign firms have a wage premium in almost all sectors. While it is not known how such wage premia are distributed between men and women within the company, existing evidence indicates that women tend to be paid less in all companies, regardless of whether they are domestic or large foreign multinationals.
Foreign firms are not more skill-intensive than domestic firms, but on average they have a higher share of workers who have received training. Foreign firms and domestic firms have similar shares of skilled workers, but foreign firms have higher shares of workers who received training. The results suggest that foreign firms can make a crucial contribution for skill development of local workers, including women.
The proportion of foreign firms with female top managers and women in ownership is lower than that of domestic firms. The results vary widely across industries and other OECD countries, suggesting that several factors are at play. This is in line with recent evidence showing that the nationality of the parent company, i.e. whether they come from more gender-equal countries, plays an important role in explaining gender patterns in firms, including career progression (Kodama, Javorcik and Abe, 2018[14]; Tang, 2017[15]).
Continue policy reforms to eliminate gender inequality and promote women’s empowerment in society and economy. Over the past decade, Austria has undertaken important policy reforms to eliminate gender inequalities in society and the economy, following the 2013 OECD Recommendation of the Council on Gender Equality in Education, Employment and Entrepreneurship (OECD, 2017[14]) and the recommendations provided in the OECD Economic Survey of Austria 2015 (OECD, 2015[15]). These policies include measures to increase the availability of childcare facilities, reforms of child benefits and parental leave schemes to make them less gender discriminatory, and efforts to streamline family policies across regions and levels of government. The continuation of this reform agenda will be key to creating the conditions necessary for women to fully participate in the labour market and take advantage of the benefits brought by FDI.
Improve the participation of women in sectors receiving substantial amounts of FDI or where Austria wants to attract more FDI. A significant share of FDI, particularly new establishments, is directed toward male‑dominated activities, namely manufacturing and construction. These sectors are also those where FDI has the greatest impact on employment. Furthermore, Austria’s FDI attraction strategy focuses on sectors that employ low shares of women (e.g. green tech, artificial intelligence). Increasing female labour force participation in these sectors is a prerequisite for ensuring that the job opportunities created by FDI are equally accessible to men and women. This requires action in several policy areas, including the expansion of female talent, particularly in technical and scientific fields.
Promote gender inclusive business practices by leveraging on existing investment incentive programmes. Austria offers various economic and tax incentives to businesses (e.g. tax relief, state loans, provision of guarantees). Some of these programmes contribute to achieving the SDGs (e.g. use of renewable energy, R&D/innovation). Linking some of these incentive schemes to gender equality objectives could help support the spread of more gender inclusive business practices. It is important that such schemes are designed in a transparent way and that their costs and benefits are regularly evaluated.
Integrate the gender dimension into the policies and programmes of investment institutions and promote their co‑ordination with institutions in charge of gender issues. The Federal Ministry for Labour and the Economy and the Austria Business Agency (ABA) can play an important role in strengthening the positive contribution of FDI on gender. They can incorporate gender considerations and objectives into Austria’s strategy for attracting and facilitating FDI, in line with national gender equality objectives; promote policies to make workplaces more gender inclusive; and collect gender-disaggregated data at the firm level that can be used to monitor the impact of FDI on gender equality. Co‑ordination between institutions responsible for investment and gender policies is crucial for aligning policy objectives and improving policy design and implementation.
Wide gender imbalances persist in paid and unpaid work
The family model prevailing in Austria is based on distinct and asymmetrical gender roles, in which men mainly perform breadwinner activities and women provide extensive ‘in-house’ services, in particular domestic work, childcare and care of the elderly. This model is reinforced by persistent gender stereotypes and social norms about the role of women in society and the economy, which are more pronounced than in several comparator countries. The 2017 Eurobarometer on gender equality, for example, shows that respondents in Austria have higher tendencies to hold gender stereotypes, both generally and about women in politics, compared to France, Sweden, Denmark, the Netherlands and Luxembourg. They are also less likely to be supportive of men’s contribution to gender equality and to say that there is a problem in the way women are portrayed in the media and advertisements (European Commission, 2017[16]).
This family model underlies deep gender imbalances in unpaid and paid work, careers and incomes (Gönenç, 2015[17]). In Austria, as in all OECD countries, the participation of women in the labour force is lower than that of men. In 2021, women’s labour force participation was 72.6% in Austria, compared to 81.9% for men (Figure 2.1, Panel A). The labour force participation is even lower among immigrant women from non-EU countries (around 60% in 2019), while it is similar among immigrant men (81%) (Heilemann, 2021[18]). Women’s labour force participation is higher than in the OECD (64.8%), but lower than in several comparator countries, including those with similar traditional family models, such as Germany (74.6%) and Switzerland (79.7%). The gender gap in labour force participation in Austria is among the highest in the group of comparator countries.
The type of work performed by women and men differs widely, starting with the number of hours worked. In Austria, women tend to dedicate fewer hours to paid work compared to men: around 35.6% of women have part-time jobs compared to 8.5% of men (Figure 2.1, Panel B). The percentage of women with part-time jobs is among the highest in the OECD area (lower only than the Netherlands, Switzerland, Japan and Germany). At the same time, the proportion of men with part-time jobs is lower than the OECD average and that of other comparator countries. In Austria, as in most OECD countries, the segregation of gender roles in the labour market emerges after the birth of the first child. Labour force participation decreases dramatically for mothers of young children, but not for fathers. Mothers often take long periods of parental leave followed by a long period of part-time work, usually until their youngest child completes compulsory schooling.
Note: The labour force participation rates is calculated as the labour force divided by the total working-age population. Part-time employment refers to persons who usually work less than 30 hours per week in their main job.
Source: OECD (2022[19]), Gender Portal, https://www.oecd.org/gender/data/.
The separation of roles determines different employment patterns in couples with children. The male breadwinner model and the 1½ model (where the man works full-time and the woman part-time) dominate the employment structure of Austrian couples with children under 15 (62% of couples) (Figure 2.2). In Austria, the share of households following the breadwinner and 1½ models is higher than the OECD average (43%) and lower only than in the Netherlands and Switzerland (in both countries around 66%).
Distribution (%) of employment patterns in couples with at least one child aged 0-14, 2019
Source: OECD (2019[20]), OECD Family Database, https://www.oecd.org/els/family/database.htm .
The birth of the first child also leads to a separation of roles in unpaid work. Surveys show that in up to 70% of Austrian families with children, housework (cleaning, cooking, childcare, and care of the elderly) is predominantly performed by mothers (Gönenç, 2015[17]). This separation of roles between mothers and fathers is independent of socio‑economic conditions and educational background and tends to continue until the youngest child completes secondary school. Although this pattern is observed in other OECD countries, it seems to be particularly pronounced in Austria. In Austria, women spend an average of 269 minutes per day on unpaid work, 134 minutes more than men. This gap is higher than the OECD average (126 minutes) and several comparator countries (92 minutes in Germany, 79 minutes in the Netherlands and 56 minutes in Denmark) (OECD, 2022[21]). Data based on the OECD Risks That Matter 2020 survey reveal that women in Austria sacrificed more time in unpaid work than men during COVID‑19. The results show that mothers were almost three times as likely as fathers to report taking on most or all of the additional unpaid care work caused by the closure of schools and childcare facilities. This is the third highest value among the OECD countries surveyed, after Turkey and Germany (OECD, 2021[22]).
Women tend to have non-standard contracts, work mainly in services, and are paid less
The types of employment between women and men differ considerably. Disparities can be observed in contract types, sector of activity, and pay. These inequalities accumulate over time and are likely to result in a gender pension gap and a higher incidence of old age poverty among women (OECD, 2017[23]). Most women have part-time or non-standard employment contracts, while most men have standard full-time employment contracts (Figure 2.3, Panel A). Women are also over-represented in services activities, particularly in health and social care, trade, hospitality, and education, while men dominate traditional manufacturing and construction activities. Moreover, a higher proportion of women is employed in unskilled activities than men (11% women compared to 8% of men) (Statistik Austria, 2021[24]).
In all OECD countries, women are on average paid less than men for the same or similar job, even when taking into account the education level. The gender wage gap has two main sources: differences in number of hours worked and gaps in hourly wages. In Austria, the gender wage gap amounted to 12.4% for full time employees and to 20% for hourly wages in 2021 (Figure 2.3, Panel B). The gender wage gap for full-time employees was lower than in several comparator countries, such as the Netherlands, Switzerland, Germany and Finland. On the other hand, Austria’s gender wage gap for hourly wages is the highest in the group of comparator countries. The incidence of part-time work for women contributes significantly to the wage gap between women and men in Austria, not only because women work fewer hours, but also because hourly wages tend to be lower in part-time jobs than in full-time jobs. In addition, recent evidence shows that the bulk of the gender gap in Austria is concentrated within firms: about three‑quarters of the gender wage gap between men and women who have similar skills reflect differences in tasks and responsibilities rather than differences in pay for work of equal value. The remaining one‑quarter of the gender wage gap results from differences between firms, namely the concentration of women in low-wage firms and industries (OECD, 2021[25]).
Note: The gender wage gap for full time employees is calculated as the difference between median earnings of men and women relative to median earnings of men; the hourly gender wage gap is calculated as the difference between average gross hourly earnings of male and female employees, as percentage of male gross earnings.
Source: Panel A: Statistik Austria (2021[26]), Share of employees by employment status and sex, https://www.statistik.at/en; Panel B: OECD (2022[19]), OECD Gender Portal, https://www.oecd.org/gender/data/; Eurostat (2020[27]), Gender pay gap statistics, https://ec.europa.eu/eurostat/databrowser/view/sdg_05_20/default/table?lang=en.
Few women have management positions or become entrepreneurs
In Austria, as well as globally, women’s and men’s prospects in terms of career development are uneven. These gaps are not explained by differences in educational attainments and performance. Women tend to be underrepresented in intermediary management levels: only 35.5% of managers were women in 2021 in Austria (Figure 2.4). This share is higher than the OECD average and like that of comparator countries. At senior management levels, the representation of women is even lower. According to a report published by the Austrian Chamber of Labour (2022[28]), among the largest 200 firms in Austria, the proportion of women on management boards is less than 9%, and less than 25% of supervisory board members are women.
Women are also underrepresented among entrepreneurs in Austria. In 2020, only 2.4% of women were entrepreneurs with employees, compared to 6.4% of men (Figure 2.5, Panel A). The share of women entrepreneurs without employees (own-account workers) was at 5.5%, but still lower than that of men at 6.3% (Panel B). Both shares were similar or higher than those of comparator countries. The profile of women entrepreneurs differs from that of men. Women entrepreneurs in Austria work more part-time than men – 33% of women compared to 9% of men, according to a report of the European Commission (2014[29]). This suggests a preference for more flexible jobs and non-standard working hours, explained by their need to reconcile work and family responsibilities. They are also disproportionately concentrated in service activities and largely absent from the manufacturing sector (OECD, 2022[19]).
Female intermediary-level managers (%), 2021
Source: OECD (2022[19]), OECD Gender Portal, https://www.oecd.org/gender/data/.
Source: OECD (2022[19]), OECD Gender Portal, https://www.oecd.org/gender/data/.
Despite improvements in educational attainments, gender imbalances remain in terms of skills and areas of study
For a long time, Austrian men had higher educational attainments than women. This advantage, however, has slowly disappeared in recent decades. In 2020, an equal share of men and women completed secondary education and more women than men completed tertiary education (approximately 47% of women had tertiary education, compared to 34% of men) (Figure 2.6). The reduction of gender gaps in education has not yet translated into more equal outcomes in the labour market. Furthermore, Austria still has a large gender gap in social mobility in educational achievements. An OECD study shows that 33% and 25% of men and women, respectively, achieved higher levels of education than their parents, compared to an OECD average of 40% and 38% (Gönenç, 2015[17]).
Note: Tertiary education attainment is the share of population with tertiary education by sex. Tertiary education includes both theoretical programmes leading to advanced research or high skill professions such as medicine and more vocational programmes leading to the labour market.
Source: OECD (2022[19]), OECD Gender Portal, https://www.oecd.org/gender/data/.
Despite convergence in enrolment, significant gender differences persist in terms of academic results. The OECD PISA tests show that girls’ reading skills now exceed those of boys in Austria, as well as in all OECD countries (Figure 2.7). However, boys perform better in mathematics and the gap with girls is among the highest in the OECD (the difference in reading is, however, much greater than the one in math). Studies show that girls and boys in Austria have different interests and inclinations already in primary school, which indicates a strong emphasis on gender roles from early childhood imposed by the society and family (Eder, 2014[30]; Lassnigg, Kulhanek and Wejwar, 2014[31]). Moreover, these differences seem to persist in secondary and tertiary education (Freisinger, Palienko and Straner, 2014[32]).
Girls and boys also differ in their preferences towards areas of study at all levels of education. In apprenticeships, which are one of the main educational paths in Austria, women tend to choose professions such as office clerk, retailer and cook, while most men go into technical fields like construction, installation and repair of buildings, and motor vehicles (Statistiks Austria, 2020[33]). Regarding tertiary education, young women tend to choose the fields of business, law, education, and health, while young men choose scientific and technology fields, such as engineering, natural sciences, mathematics, statistics, and information and communication technology (ICT) (Figure 2.8). These divergences seem to reflect expected gender roles: men prefer sectors with higher and more secure incomes, while women choose occupations compatible with career breaks and part-time work.
Difference in PISA score points (boys’ scores minus girls’ scores), 2018
Source: OECD (2018[34]), PISA Database, https://www.oecd.org/pisa/data/2018database/.
Share of graduates by field (%), 2020
Source: OECD (2022[35]), OECD Education at a Glance, https://doi.org/10.1787/3197152b-en.
Achieving gender equality can lead to significant socio‑economic benefits
Achieving gender equality is an important goal in itself, but it can also bring benefits in several economic and welfare dimensions. It can improve the health of both women and men by relieving women of caring duties and reducing their risk of mental stress and illness, as well as by decreasing the number of hours men spend at work and increasing the time they spend with their families. A better work-life balance for both parents can also have a positive impact on the well-being of children. Improving gender equality in education and skills is key to unlocking female talent and improving the diversity and availability of skills in all sectors. Gender equality in education is also a precondition for intergenerational social mobility, i.e. the possibility for children to achieve a better socio‑economic status as adults than their parents.
Creating conditions that allow women to work full-time, without interruptions due to extended periods of parental leave and part-time work, and eliminate the gender pay gap can bring important economic benefits. Employers can benefit from a larger pool of female and male talent, both equally committed to remaining in the workforce. This also increases employers’ incentives to invest equally in the skills and career advancement of male and female workers, not only resulting in more and better quality human capital, but also contributing to creating a more inclusive and diverse work environment and reduce tensions at work.
A macroeconomic simulation of an OECD growth model shows that greater equality between men and women in the organisation of work and private life in Austria could lead to significant gains in productivity and GDP growth (OECD, 2021[1]; Ziemann, 2015[36]).The model assumes a convergence of part-time employment and labour force participation patterns between men and women in Austria by 2025. Specifically, it assumes an increase in the female labour force participation rate from 71% to 75%, a reduction in the incidence of female part-time employment from 33% to 21%, and a reduction in the hours worked per week for men working full-time from 43.5 to 41.8. Based on these parameters, the model predicts that trend productivity will increase by almost 10% until 2060, of which 3.5% will come from labour efficiency gains and over 6% from human capital gains. Under this scenario of greater gender equality, potential GDP is projected to increase by 13% and GDP per capita by 8% by 2060 (Figure 2.9).
Percentage point increase from the baseline scenario to the more gender-equal scenario
Source: OECD elaboration based on OECD’s long-term growth model Ziemann (2015[36]), “Towards more gender equality in Austria”, https://doi.org/10.1787/5jrp2s4pfbnp-en.
FDI is prevalent in sectors with a good gender balance in employment, but with higher gender wage gaps
FDI can influence gender equality in the labour market of host countries, as it affects the development of sectors in which many women work or are more likely to work. In Austria, FDI is concentrated in services, particularly in professional services, finance, trade and real estate activities (Figure 2.10). These sectors employ an equal share of men and women. A significant share of FDI is also found in manufacturing, in particular pharmaceuticals, motor vehicles, basic metals and electronics. These industries have higher proportions of men than women (around 70% of employees are men), with the exception of pharmaceuticals, which has a more gender-balanced workforce. Hence, apart from manufacturing, FDI in Austria has contributed to the development of sectors with a good gender balance in terms of workforce participation.
The gender pay gap is another important indicator of gender equality in the labour market. As shown in the first part of this chapter, women are on average paid less than men for the same job in Austria and globally, even after controlling for education levels. Gender pay gaps characterise the Austrian labour market in all sectors. They tend to be higher in services, including those with a good gender employment balance, which receive a significant amount of FDI, i.e. finance, professional services and trade. At the same time, the average wage levels of men and women are higher in these sectors. A relatively high gender wage gap is also found in the manufacturing sector, which receives a significant amount of FDI and has relatively lower shares of women.
FDI inward positions by sector (2020) and female employment by sector (2020)
Note: The dashed line at 50% indicates gender balance in employment.
Source: OECD elaboration based on OECD (2022[7]), OECD FDI Statistics, https://stats.oecd.org/; ILOSTAT (2021[37]), Employment by sex and economic activity, https://ilostat.ilo.org/data/.
Average monthly earnings of full-time employees by sex and economic activity (local currency, 2019)
Source: OECD elaboration based on ILOSTAT (2019[38]), Average monthly earnings of employees by sex and economic activity, https://ilostat.ilo.org/data/.
Greenfield FDI favours male‑dominated sectors and is likely to create more jobs for men
Data on greenfield FDI provide further insights into the link between the foreign activities of MNEs and gender equality in Austria. Greenfield FDI is a type of investment in which a company opens a subsidiary in another country, building its operations from scratch. This type of investment can have a significant employment impact in the host country. Greenfield FDI in Austria is prevalent in sectors that employ more men than women (Figure 2.12). These are construction, motor vehicles, electronics, machinery and equipment, transport and information and communication. There are, however, several exceptions, such as the pharmaceutical, financial, hotel and tourism sectors, which receive significant amounts of greenfield investment and employ relatively more women than men. Overall, it appears that greenfield FDI in Austria has supported the development of sectors with relatively higher shares of men than women.
Greenfield FDI by sector (cumulated between 2003 and 2020) and female employment by sector (2020)
Note: The dashed line at 50% indicates gender balance in employment.
Source: OECD elaboration based on fDi markets (2022[39]), Database of crossborder greenfield investments, https://www.fdimarkets.com/; ILOSTAT (2021[37]), Employment by sex and economic activity, https://ilostat.ilo.org/data/.
The employment impact of greenfield FDI varies significantly across sectors. The largest number of jobs is created in machinery and equipment, where five jobs are created for every USD million invested (Figure 2.13). Greenfield FDI also has a considerable employment impact in construction (where about 3.5 jobs are created for every million greenfield FDI invested), motor vehicles (about three jobs) and transport (about two jobs). The sectors where greenfield investments create the most jobs are also those with particularly low levels of female participation in employment. For example, women account for less than 20% of employment in the machinery and equipment sector, while in construction they represent about 13%. These results suggest that women are less likely than men to benefit from the job opportunities generated by greenfield investments.
Greenfield FDI (cumulated between 2003 and 2020) and female employment (2020)
Note: The dashed line at 50% indicates gender balance in employment.
Source: OECD elaboration based on fDi markets (2022[39]), Database of crossborder greenfield investments, https://www.fdimarkets.com/; ILOSTAT (2021[37]), Employment by sex and economic activity, https://ilostat.ilo.org/data/.
Foreign firms employ lower shares of women than domestic firms…
Multinational enterprises (MNEs) can promote gender equality in host countries through the employment activities and practices of their foreign affiliates (hereafter referred to as foreign firms). Their impact, however, can vary considerably depending on factors such as the sector, the nationality of the parent company and the policy and regulatory environment of the host country (OECD, 2019[6]; OECD, 2021[9]). Data from the World Bank Enterprise Survey (WBES) show that foreign firms in Austria employ on average a lower share of women than domestic firms. Conversely, in most OECD countries covered by the WBES, foreign companies have higher or similar shares of women than domestic companies. Moreover, the share of women employed by foreign firms in Austria is among the lowest in the group of OECD countries (30% in Austria compared to 36% in the OECD on average).
The gap between the share of women employed in foreign and domestic firms is largest in plastics and rubber, food, computer activities and construction. Plastics and rubber and construction are sectors characterised by a very low female participation (less than 30%), which can make it more difficult to recruit and retain female talent. The greater propensity of women to leave the labour market, especially when they become mothers, may also discourage the hiring of women in jobs that require an initial investment in training (e.g. computer activities). In other sectors, however, the share of women hired by foreign and domestic firms is very similar, including those with a strong presence of foreign firms (hospitality, trade and fabricated metals). The data also indicate significant differences in the proportion of women employed between sectors. For example, both domestic and foreign firms operating in the hospitality, paper and chemical sectors tend to employ a higher share of women than firms in other sectors.
Share of female workers by firm ownership and country, 2021
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
Share of female workers by firm ownership and sector in Austria, 2021
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
…but pay higher salaries on average in most sectors
The quality of job opportunities created by foreign firms is determined, among other factors, by the wages associated with these jobs. The WBES provides data on wages by company ownership, but not by gender. Although the data cannot be directly linked to gender practices, they can still be used to shed light on wage differences between foreign and domestic firms. The results show that foreign firms in Austria and almost all OECD countries covered by the WBES pay on average higher wages than domestic firms. This foreign wage premium can partly be explained by the fact that foreign firms are on average more productive (see Chapter 1), which in turn is due to their access to better technology and knowledge than the parent company.
A foreign wage premium is found in all sectors except construction, basic metals, fabricated metals and hospitality, where wages of foreign and domestic firms are similar, and in precision instruments where wages of domestic firms are higher. Wage gaps between foreign and domestic firms are particularly high in computer activities, transport, retail trade and the food and transport machines industries. For example, in computer activities, the salary paid by an average foreign company is more than twice that paid by an average domestic firm. Although it is not possible to determine how these foreign wage premia are distributed between men and women, some studies seem to indicate that women in Austria tend to receive lower wages than men for the same job, regardless of whether they are employed by domestic or large foreign multinationals (Boheim and Gust, 2021[40]).
Relative wage difference between foreign and domestic firms, 2018‑21
Note: The indicator measures the difference between average wages of foreign and domestic firms, relative to wages of domestic firms. Positive values indicate that foreign firms pay on average higher wages than domestic firms. Note: The reference year varies from country to country and ranges from 2018 to 2021. Data for Austria refer to 2020‑21. Wages are calculated as total annual labour cost (includes wages, salaries, bonus, etc.) divided by the sum of full-time permanent and temporary employees.
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
Average annual wage per employee by firm ownership and sector, 2020‑21
Note: Wages are calculated as total annual labour cost (includes wages, salaries, bonus, etc.) divided by the sum of full-time permanent and temporary employees.
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
Foreign firms contribute significantly to skills development
Foreign firms tend to have access to more advanced technologies and therefore may be in greater need of skilled workers capable of using these technologies. At the same time, the technological and skill intensity of firms varies greatly across sectors. Jobs requiring higher skill levels are generally better paid and may offer better career prospects. Ensuring women equal access to skilled jobs is therefore an important way to improve gender equality. The WBES data allow to assess differences in the share of skilled workers between foreign and domestic firms, but without distinguishing between female and male employees. In Austria, both domestic and foreign firms have similar shares of skilled workers (Figure 2.18). These shares are among the highest observed in the group of OECD countries for which data are available. The results vary widely from country to country, although the share of skilled workers is higher in domestic than in foreign firms in the OECD on average (79% in domestic compared to 73% in foreign firms). These averages, however, conceal important differences between sectors. Foreign firms have higher shares of skilled workers than Austrian firms in chemicals, plastics and rubber, basic metals, food and machinery and equipment, while Austrian firms have higher shares of skills in the sectors of electronics, transport machines and non-metallic minerals.
Foreign firms can play an important role in the creation of human capital. They can invest in the training and skills development of their employees, for instance to enable them to use new technologies. They can thus help women acquire new skills and competences, which are crucial for career progression. In Austria, foreign firms have a higher share of employees who have received training than domestic firms (60% in foreign firms compared to 41% in domestic firms) (Figure 2.19). This may be due to the greater resources available to foreign firms (which are on average more productive than domestic ones, see Chapter 1). The data do not say how many of workers receiving training are women, however. Similar results are also observed in most OECD countries, suggesting that training is a widespread practice of foreign firms abroad.
Share of skilled workers by firm ownership and country, 2018‑21
Note: The reference year varies from country to country and ranges from 2018 to 2021.
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
Share of trained workers by firm ownership and country, 2018‑21
Note: The reference year varies from country to country and ranges from 2018 to 2021.
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
A lower share of foreign firms has female top managers and owners
The analysis presented in the first part of the chapter shows that in Austria, as globally, few women reach top management positions in companies due to the so-called ‘glass ceiling’, an invisible barrier explained by demographic characteristics (e.g. gender, race) rather than by skills or performance. According to the WBES, the share of foreign firms with a women top manager is lower than the share of domestic firms (1% of foreign firms compared to 20% of domestic firms) (Figure 2.20). Higher gaps between foreign and domestic firms are observed in plastics and rubber, hospitality, retail trade, paper and construction. This indicator, however, does not say how many women within each group of firms reach top managerial positions. The results vary widely between countries although on average in the OECD the share of domestic firms with women top managers is slightly higher. These large variations between countries suggest that several factors are at play. Recent studies show that corporate culture and the nationality of the investing company are important in explaining corporate performance in relation to gender equality, including career progression. In particular, foreign companies from more gender-equal countries tend to have a higher proportion of women, including in the high levels of management, and to offer more family-friendly working arrangements (Kodama, Javorcik and Abe, 2018[41]; Tang, 2017[42]).
Women also tend to be under-represented among business owners. In Austria, the share of foreign firms with female representation in ownership is on average lower than the share of domestic firms (22% of foreign firms compared to 39% of domestic firms) (Figure 2.21). Results vary across sectors, however. The share of foreign firms with female owners is lower in services (except for hospitality, where the share is the same) and construction, while it is similar to or higher than that of domestic firms in manufacturing. Moreover, the share of foreign firms with women in ownership in Austria is considerably lower than the OECD average, equal to 40%. The lower share of foreign women-owned businesses can be explained by the barriers women entrepreneurs face when trying to scale‑up and enter international markets, compared to men business owners. For example, evidence shows that women-led businesses face a number of obstacles, including lower access to finance and high barriers to trade, particularly in services (Korinek, Moïsé and Tange, 2021[43]).
Share of firms with female top managers by firm ownership and country, 2018‑21
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
Share of firms with female participation in ownership by firm ownership and country, 2021
Source: OECD elaboration based on World Bank (2021[11]), World Bank Enterprise Survey: Austria (2021), https://www.enterprisesurveys.org/en/data/exploreeconomies/2021/austria.
Despite important steps forward, Austria’s economy and society remain characterised by deep gender imbalances. Further efforts are needed to achieve the SDG 5 on gender equality and women empowerment by 2030. FDI can play an important role to help Austria achieve its gender equality targets. The assessment shows that FDI in Austria supports the expansion of sectors with a better gender balance in labour force participation (e.g. professional services), although greenfield FDI is prevalent in male‑dominated sectors. It also shows that foreign affiliates of MNEs create jobs that are better paid and offer better prospects for skills development than those created by domestic firms. Persisting gender asymmetries in the labour market, however, indicate that job opportunities created by FDI are more likely to benefit men than women.
The promotion of gender equality must remain a key policy priority for the Austrian Government. Over the past decade, Austria has undertaken major policy reforms to eliminate gender inequalities, following the OECD Recommendation on Gender Equality in Education, Employment, and Entrepreneurship (OECD, 2017[14]) and the recommendations provided in the OECD Economic Survey of Austria 2015 (OECD, 2015[15]). These reforms include policies to strengthen the supply and quality of childcare facilities, to increase the economic and social participation of women among immigrants, and to reform the public sector, particularly the education sector. Several initiatives were also adopted to strengthen the representation of women in leadership positions and among entrepreneurs (for example, the introduction of gender quotas in the supervisory boards of companies in which the state holds over 50% of the shares, or “Female Innovators”, “Female Founders” or “Women in Business” which promote female entrepreneurship, startups, and innovators (Government of Austria, Federal Ministry of Finance, 2023[44]; Government of Austria, Federal Ministry of Labour and Economy, 2023[45]; Female Founders, 2023[46]). Nonetheless, there is room to further review existing policies and make them less gender discriminatory, for example in taxation (e.g. by removing disincentives to work in the tax system). The continuation of this reform agenda will be important to improve gender equality in all aspects of economic and social life and enable women to take full advantage of the benefits of FDI.
Targeted policies at the intersection of investment and gender policies can strengthen the positive impact of FDI on gender outcomes. Although a detailed analysis of the policy and institutional framework is beyond the scope of this study, some areas for policy action and potential follow-up work are discussed. These are identified using the framework and key questions developed in the gender chapter of the OECD FDI Qualities Policy Toolkit (OECD, 2021[9]) and include:
Increasing the participation of women in the labour market, especially in sectors where Austria attracts or aims to attract more FDI. In Austria, a significant share of FDI is directed towards male‑dominated activities (i.e. manufacturing). Furthermore, Austria’s investment promotion strategy focuses on high-tech and knowledge‑intensive sectors, which are characterised by low female participation in the workforce (e.g. green tech, artificial intelligence, robotics). Although attracting FDI in these sectors is in line with Austria’s goal of becoming an even more sustainable and knowledge‑intensive economy, it will be important to improve the participation of women to ensure a more balanced distribution of the benefits of FDI between women and men. Increasing the participation of women in the labour force requires policy action in several areas, including a gender-neutral tax and parental scheme systems and the availability of affordable and good-quality childcare. Expanding female talent particularly in technical and scientific fields will also be important. This will not only lead to greater gender equality but can also help Austria attract further investments. Austria’s large pool of highly qualified people is a key attraction factor for FDI. Expanding this talent pool can make Austria an even more attractive destination for foreign investors. The Austrian Government has taken important steps to achieve this goal. For example, the ‘MINT-Girls Challenge’ initiative aims to inspire more girls and young women to pursue careers in science, technology, engineering, or mathematics (STEM) (Government of Austria, Federal Ministry of Labour and Economy, 2023[47]). However, it will be important to give continuity to these programmes and ensure that they meet the skills needs of domestic companies and foreign multinationals in Austria.
Encouraging the use of family-friendly business practices by leveraging on existing investment incentive programmes. Making workplaces more family-friendly is key to achieving a more gender-equal workforce. The use of family-friendly work practices can be encouraged through existing incentive programmes (e.g. tax reliefs, state loans, provision of guarantees). Austria has several incentives schemes to support SDGs (e.g. use of renewable energy). Linking some of these programmes to gender equality targets could encourage the spread of more gender inclusive business practices in both domestic and foreign companies. It is important, however, that such schemes are designed in a transparent manner and that their costs and benefits are regularly evaluated, also in relation to the possibility of using alternative policies to support the same gender equality objectives. Certification or award programmes can also be used to incentivise companies to adopt gender inclusive practices. For example, the initiative ‘equalitA’ of the Austrian Federal Ministry of Labour and Economy provides with a ‘seal of gender equality’ companies that meet several gender equality criteria (e.g. representation of women in all areas of the companies and management levels; use of measure against gender discrimination) and an award to companies that provide innovative solutions for promoting gender equality (Government of Austria, Federal Ministry of Labour and Economy, 2023[48]).
Integrating the gender dimension into the policies and programmes of institutions responsible for investment policies. Institutions in charge of investment issues can play an important role in enhancing the positive contribution of FDI. They should incorporate gender considerations and objectives into their investment attraction and facilitation strategy, in line with national priorities in terms of gender equality. According to the OECD survey on IPA monitoring and evaluation and priority setting (OECD, 2021[49]), the Austria Business Agency (ABA), the agency responsible for investment attraction and facilitation in Austria, currently does not incorporate key gender performance indicators to select priority investors. According to the same survey, ABA also believes it is not its role to contribute to SDG 5 (unlike 27% of OECD IPAs). Incorporating gender equality indicators into the ABA’s FDI prioritisation strategy (like 16% of OECD IPAs) would be a concrete way for authorities to set targets for FDI to work towards gender equality goals. Both the ABA and the Federal Ministry of Labour and Economy can also play a proactive role by promoting family-friendly corporate policies, raising awareness among foreign investors about the importance of gender equality for Austria, and contributing to the collection of gender-disaggregated data at firm level, which can be used to monitor the impact of FDI on gender equality.
Ensuring co‑ordination between institutions responsible for investment and gender policies to align policy objectives and improve policy design and implementation. Co‑ordination mechanisms can take different forms, from gender focal points to inter-ministerial bodies. It is important that these mechanisms involve all relevant actors, including those responsible for investment. Furthermore, co‑ordination and rationalisation between the different levels of government (i.e. the federal government and the Länder) are crucial to ensure better allocation of responsibilities and management of public resources for the implementation of these policies.