Karin Svanborg Sjövall and Nima Sanandaji // 19.05.2016

The Swedish gender equality discussion is characterized by a remarkable paradox. While Sweden, along with the other Nordic countries, tops the international index of gender equality, we perform abysmally in terms of female entrepreneurship and top managers.

According to the Global Gender Gap Report, the five Nordic countries are the best in the world in terms of providing equal opportunities for men and women. Save the Children has stated that there is no other part of the world where mothers have equally good conditions. In many parts of Europe, a common perception is still that men have more of a right to work than women in times of scarcity. In Sweden just one in fifty share this view.

These numbers often accompany debates about how a big welfare state is a precondition for gender equality, overshadowing the fact that the truth is far more complicated. While it is correct to claim that the Swedish workforce includes more women than the European average, Swedish women actually have more difficulties in reaching top positions in business than women in more conservative countries with smaller welfare states.

It is time to turn our focus to the structures that hold back women’s careers in Sweden: a big public sector smothering business opportunities for women, the world’s highest marginal tax rates and the fact that men on average work 20 per cent more hours than women.

In the newly published book The Nordic Gender Equality Paradox (Timbro), we present international statistics on women’s chances of reaching managerial positions compared to their male colleagues.

Perhaps surprisingly, the United States, a country that lacks statutory parental leave, performed best in the comparison. As a matter of fact, it turned out that, compared to men, American women only have a 15 per cent lower chance of reaching a managerial position. One would think that the Nordic countries, known for their generous family policies, would do better. In fact, Swedish women are 48 per cent less likely than men to attain a management position. In Norway, the gap is 52 per cent, in Finland 56 per cent and in Denmark 63 per cent.

The women who reach top jobs in the Nordic region are primarily active within the public sector. In the private sector underrepresentation is even greater. Eurostat data show that every fourth top manager in the private sector in the average EU country is a woman. Besides Cyprus, Denmark and Sweden are the countries with the lowest percentage of female top managers in the private sector.

These poor results have spurred new demands for quotas on corporate boards. But once again, the Nordic experience points in a very different direction. Affirmative action legislation in Norway has failed to encourage more women to reach managerial positions. Eight years after the statutory quotas were introduced, there are no women among the heads of Norway’s 60 largest companies.

Welfare systems that encourage taking time off work – for children or leisure – and that create disincentives from risk-taking, seem to both reduce the overall stock of female entrepreneurs and prevent the quest for excellence needed to reach the top. The lack of competition in the public sector also reduces the opportunity for career advancement among employees, the vast majority of which are women. Two decades after the introduction of public sector reforms that opened up the possibility for women to run their own businesses in healthcare, education and social care, choice is still limited and imminent plans on resocialization are acutely threatening budding markets. In addition, child care, parental leave and other welfare systems are all suited to families where one parent, usually the woman, works relatively few hours.

Taxes matter, too. In other parts of the world, families purchase household services in order to buy time for both parents to work. But the high taxes in Scandinavia disincentivise extra work and paying others to perform a service. Men in the Nordic countries spend about 20 per cent more hours at work than women do, whereas the gap among our Baltic neighbors is half as big.

Politicians often point the finger at the market when issues of gender inequality are discussed in Sweden. But the glass ceiling is essentially a political product, a logical consequence of a badly designed system. Either we must dare to reform the Nordic welfare model, or accept that a country famous for its progressive policies will continue to have shamefully few women on top.

Karin Svanborg Sjövall is the CEO of Timbro. Nima Sanandaji is President of the European Centre for Entrepreneurship and Policy Reform (ECEPR) and author of The Nordic Gender Equality Paradox.