1 Introduction

The labour market allows individuals to earn a living throughout their lifetime. When it comes to gendered issues, the labour market is also an environment where different outcomes between female and male workers emerge. Differences between women and men naturally exist because of the biological characteristics related to sex differences. The possibilities of maternity and longevity are the most notable examples. Compared with men, women also have less physical power. In fact, the origin of the gender gap in the labour market goes back to the ‘male breadwinner’ model, typical of an industrial economy, in which women’s role was traditionally limited to homemaking activities (Fortin, 2005; Lewis et al., 2008).Footnote 1 Physical skills are relevant to the labour supply for an industrial economy.

Since the late 1960s, instead, the transition towards a service economy has been accompanied by an increasing demand for nonphysical skills. Thus, the rise of a service economy has sustained the increasing participation of women in the labour market. Olivetti and Petrongolo (2016) show that for the period 1850–2008, the growth of the service economy explains at least half of the overall variation in working hours among females across high-income countries over the decades. This new trend was followed by a reduction in the gender gap in the accumulation of human capital. Since the 1980s, women have surpassed men in their degrees of attainment. The cohort born between 1955 and 1965 was the first to demonstrate this feature (McDaniel, 2013). But higher women’s employment rates were not followed by men’s increasing responsibilities for domestic chores and care, a social outcome known as ‘stalled revolution’ (Hochschild & Machung, 1990; Friedman, 2015).

Since the late 1990s, the changing role of women in the labour market has then been reinforced by public interventions promoting, from one side, anti-discrimination legislation aimed at removing entry barriers in male-dominated occupations. However, family-friendly policies tried to ensure a higher work–family balance for both female and male workers. Structural changes in the labour market were subject to the instauration of a ‘flexicurity’ system characterised by the spread of part-time and temporary contracts and, not always by the introduction of income security (Wilthagen & Tros, 2004).

Despite decades of progress, gender gaps in labour market outcomes remain substantial (Petrongolo & Ronchi, 2020). This situation also concerns the developed Western world, even though it varies across countries according to the welfare regime, family and employment policies, tax and benefit system, and social norms (Kushi & McManus, 2018). The persistent gender gap has gained attention from policymakers and researchers, leading to the implementation of equal remuneration policies and employment opportunities in many countries, as advocated by international and European institutions (Kolovich, 2018; Hartlapp et al., 2021). In 1999, the Amsterdam Treaty brought new insights into gendered issues at the EU level by introducing the concept of gender mainstreaming within the community (Hurtado, 2017). See Chapter “Gender-Responsive Regional Policies: Gender Budgeting” for a discussion on gender budgeting initiatives. Public intervention becomes necessary when inefficient behaviours and market friction lead to lower activity, higher unemployment, lower wages, and gender segregation in some types of employment contracts and occupations. Private initiatives are not sufficient to reduce the gender gap observed in labour markets. Accordingly, corrective fiscal policies are justified by market failures.

To narrow the gender differences in labour market outcomes, different labour market policies have been implemented in different countries at different points in time. The experience of labour market policies across European countries, notably from Scandinavian countries, delivers two conclusions. First, since the reduction in gender gaps should be supported by cultural change, which is a slow-moving process, public intervention needs to be carried out over time to produce long-lasting effects. Of course, the effectiveness and time profile of impacts depend on the type of program and participants’ characteristics (e.g. gender, age, education, unemployment duration) as well as on the local availability of jobs (Card et al., 2018). Second, implementation at the national level of labour market policies cannot be fully effective if territorial differences are not explicitly considered or if local governors are not actively involved during the conception, implementation, and monitoring phases. Gender-responsive fiscal policies should be fully integrated into the policy agenda of subnational governments (Rönnblom, 2005). The ability of local governments to attract and manage economic resources, such as European funds, as well as the ability to promote innovation in their territories of lower economic growth, is a crucial factor in the effectiveness of the policy itself. The quality of local governments is likely to be a link in the chain between national initiatives and local firms and workers.

Gender gaps may also be the result of women’s preferences, and not solely due to differences in human capital, labour market experience, and discrimination (Altonji & Blank, 1999). Recent developments in the economic literature on gender gaps have noted the role of commuting preferences in the formulation of labour supply decisions (Petrongolo & Ronchi, 2020; Le Barbanchon et al., 2020). Empirical evidence shows that women are less willing to commute because they have a larger share of home responsibilities (Perales & Vidal, 2015; Gimenez-Nadal & Molina, 2016). Hence, they are constrained by the distance they can travel to work or look for a job. Unemployed women restrict their search to smaller areas, which is often associated with lower job opportunities. This hinders them from obtaining better jobs and higher wages in other regions. Compared with men, women living in both rural and peripheral regions are more willing to accept compensating penalties for commuting less (Fuchs et al., 2021). The labour market behaviour of single women does not seem to be characterised by spatial limitations (Nisic, 2017).

Following this line of reasoning, the differences in commuting attitudes between women and men can represent a structural factor that reduces the effectiveness of gendered policies set at the national level. An example of this clarifies this point. Suppose a labour market policy aims to reduce employment among women. To do so, a fiscal incentive was introduced for firms hiring female workers. Firms and workers are distributed throughout the national territory, albeit unevenly. Hence, there is a stable geography for jobs and skills. It is further assumed that women have a higher cost of commuting, especially if they are more involved than men in housing chores. Under these assumptions, the higher female labour demand will not be compensated for by an adequate flow of women from where they live to different regions. Women living in peripheral regions are likely to offer labour only as local employment opportunities, which has huge implications for women’s career prospects. If the assumption of perfect inter-regional mobility is violated among women, then regional labour market policies are more effective in reducing gender disparities because of their greater adaptability to the structure of the local economy. Labour market policies settled at the national level, instead, by implying a ‘one-size-fits-all’ labour market strategy, disregard construction regional specificities in terms of economic and demographic structure (Altavilla & Caroleo, 2013). Economic theory suggests that regional disparities in labour market dynamics may reflect market rigidities or frictions that hinder the adjustment process to asymmetric shocks (Blanchard et al., 1992; Pissaridēs, 2000). Given that the adjustment process could be fast or slow, regional differences in sex gaps can persist for a long time. However, in the long run, they generally disappear through migration flows and other factor mobility across regions (Niebuhr et al., 2012; Riekhoff & Järnefelt, 2017). Unfortunately, this does not seem to be the case when one deals with gendered issues (European Commission, 2022).

The topic of gender-responsive fiscal policies is gaining momentum in the European political agenda as set by the Gender Equality Strategy 2020–2025. The persistence of gender gaps in the labour market has led policymakers to implement policies aimed at realising women’s potential by reducing discrimination in the workplace and ensuring fewer family constrained career developments. Indeed, constraints often also concern the geographical mobility of women, which calls for greater attention to local labour market conditions as well as greater involvement by local institutions (Nisic, 2017).

This chapter first provides an overview of the main gender gaps observed in labour markets using a life-cycle perspective is embraced. This is justified by the consideration that age is an important variable for both sides of the labour market because it is considered by firms during their hiring and firing decisions, and by workers when they search for or change jobs. From a policy perspective, the experience collected across countries allows us to distinguish among policies that sustain young women at the onset of their careers. This is the case with policies that ease early schoolwork transition and skill formation. Instead, wage and occupational policies intervene at a later stage, focusing on the removal of gender differences in paid wages, occupational segregation, and the impact of maternity. Finally, specific labour market policies focus on older workers during their training activities for skill updating, retirement, and pension provisions. Particular attention has been paid to the role of regional governments. Politically, local decision-makers are of strategic importance because they have more accurate knowledge of the administrated territory and society than their national counterparts. Their greater proximity is an advantage to be exploited at different phases of a policy, from conception to monitoring its implementation. From an economic standpoint, labour markets are local entities, each characterised by a specific distribution of firms by sector and the size and distribution of workers by skills and age. The persistence of regional specificities in the labour market calls for local intervention tailored to the economic needs, forces, and potential of that territory. From a social point of view, acting locally allows decision-makers to adapt the general labour market policy to the demographic and cultural context of that geographic area. The adherence of a gender-responsive labour market policy to the characteristics of a specific territory is a fundamental prerequisite for the effectiveness of that policy. A labour market policy promulgated at the national level does not necessarily operate homogeneously throughout the national territory. The presence of economic, demographic, and cultural differences with respect to the national context can undermine the full implementation of a policy, reduce its effectiveness, and deliver unexpected outcomes.

2 The Gender Gap and Fiscal Policies: Collected Evidence

With the support of empirical evidence, this section describes the various forms of gender gaps observed in the labour market. The discussion is divided into three parts. The first part focuses on stylised facts characterising the gender gap at the onset of women’s working careers—that is, from the school–work transition until their first employment experiences. At this stage, the apprenticeship and vocational training policies were examined. The second part deals with gender gaps characterising the middle phase of women’s careers across employment outcomes, such as wages, contracts, occupational segregation, and mobility. Corrective policies in this case aim to prevent women’s discrimination in the workplace, increase the matching between women and jobs through active labour market policies (ALMPs), and reduce career interruptions during maternity periods. Finally, the third part focuses on gender gaps observed later in women’s careers. This life cycle includes employed workers whose human capital is depreciating and unemployed women who reduce their search intensity for a job. It also regards women as widows and women dropping out of the labour force. Women at this age are usually targeted by training policies for skill updating, or, if older, are involved in early retirement schemes. Pension policies are also considered to influence the gender gap.

2.1 Early Career

Despite women having already surpassed men in terms of tertiary educational attainment at the beginning of this century (McDaniel, 2013; De Hauw et al., 2017), divergent patterns emerge in terms of paid wages and sectorial occupations. The field of study seems to be a candidate factor explaining most of the observed gender differences in this case (Francesconi & Parey, 2018; Fuchs et al., 2021). Traditionally, female-dominated fields of study include the Arts and Humanities, including Foreign Languages. An increase in female graduates has also been observed in health-related studies such as Medicine, Pharmacy, and Nursing. In contrast, STEM disciplines (Science, Technology, Engineering, and Mathematics) tend to be male-dominated. Workers who graduate in STEM disciplines are usually needed by large firms that offer more profitable contractual arrangements, with higher wages and steeper career profiles. On the contrary, women who graduated from non-STEM disciplines were characterised by lower salaries and flatter wage profiles.

If differences in the field of study can explain much of the observed gender gaps throughout the active life cycle, an effective corrective policy should intervene before choosing the field of study. Decision-makers should incentivise young women to enrol in male-dominated disciplines if the goal is to close the gender gap in STEM disciplines. Similarly, public interventions could, in principle, incentivise the hiring of inexperienced women in traditionally male-dominated sectors by offering them training for adequate skill formation. A more equal distribution of skills between women and men operating at the beginning of the life cycle would be able to reduce employment barriers towards large firms and innovative sectors. As shown by Dilli and Westerhuis (2018), for European countries, a lower gender gap in STEM is associated with higher female entrepreneurial activity in knowledge-intensive sectors. Hence, closing the gender gap in STEM education can benefit a country by stimulating innovative economic activities. Female entrepreneurship also exerts a positive externality on post-secondary enrolment. As Casarico et al. (2016) show, in European countries, increasing the share of women in managerial occupations and self-employment affects the probability of enrolling in higher education. Moreover, the integration of women and men in the same labour field can help mitigate cultural reluctance inherited from the past male-breadwinner social model. Interventions at an early stage are likely to have a positive impact on the formation of gender-related stereotypes. Indeed, the results from a natural experiment involving Norwegian militaries show that cultural barriers are permeable (Dahl et al., 2021).Footnote 2 All of these considerations are valid at both the national and regional levels. Decision-makers should ensure smoothness in the transition from the educational system towards existing employment opportunities at the local level. The procedure of matching available employment opportunities with individual skills is of utmost importance, especially in territories where jobs are scarce or concentrated in a few economic sectors. In this scenario, it is likely that a misaligned educational system will lead to subsequent mismatches between workers and jobs from the perspective of offered and required skills at the regional level. This structural distortion, operating at the beginning of women’s careers, affects their future employment prospects. For example, Francesconi and Parey (2018) document that Germany has had smoother transitions towards employment for university degrees in male-dominated fields. By contrast, during the first years of post-graduation experience in the labour market, women experience more fragmented paths. The share of young women in secure employment trajectories is systematically lower than that of men when the comparison is restricted to the same marital status (Brzinsky-Fay & Solga, 2016; Berloffa et al., 2019a, 2019b). Overall, a higher level of educational attainment facilitates the entry phase of women into the labour market, but it does not ensure a smooth transition towards secure employment positions.

From a policy perspective, measures such as Employment Protection Legislation (EPL) play a relevant role in the distribution of the risk of an initial mismatch between jobs and workers. The gender gap in the secure employment trajectory is found to be larger in countries where EPL is stricter, that is, in countries where firing workers is more costly (Berloffa et al., 2020). A more stringent regulation on the dismissal of regular employment is likely to be reduced by congestion and the probability of reaching permanent employment. On the contrary, a relaxation of rules governing the protection of jobs may help to facilitate firing, and through this channel, a higher churning rate increases the matching quality between young women and entry-level jobs. Women are likely to benefit from gender-specific EPL, especially at the beginning of their careers, when the probability of leaving for maternity is still low. On this side, the flexibility of contractual arrangements may induce employers to offer contracts of limited duration as an initial screening device for more stable positions (Faccini, 2014). Of course, temporary contracts can also represent dead-ends for women trapped in repeated mismatches (Booth et al., 2002), which would lead to frequent career interruptions and the accumulation of non-employment spells.

The geographical dispersion of firms and jobs has implications for the dynamics of the gender gap in training policies. Training policies are expected to be beneficial at this stage because they are instrumental in career progression and catch-up after employment interruptions. Acquiring new skills, or complementing those already acquired, may prevent women from falling directly into a precarious employment trap or intermittent careers just after their school-work transition (Brzinsky-Fay & Solga, 2016). Since training activities are often offered by large and innovative firms, the territorial distribution of these firms influences the effectiveness of the training policy in that region. Regions characterised by a higher rate of firms offering training and a higher female participation rate are likely to produce positive effects (Nisic, 2017). In contrast, the gender training gap is expected to be higher in regions characterised by a higher presence of small and medium firms. Another critical aspect of gendered training policies is the content of programmes. If intended to be beneficial, it should allow women to acquire stable employment, focusing on the acquisition of skills required by the local economic system in which they reside. Neglecting the local nature of labour demand is likely to reduce the scope of the training policy itself, that is, improve women’s employability, at least in the short run.

Unfortunately, empirical evidence shows that, despite being beneficial for prolonging careers, participation in training is far lower among female employees than among their male counterparts (Fitzenberger & Muehler, 2015; Lössbroek & Radl, 2019; Fuchs et al., 2021). Like men, women receive less training during their early careers, which in turn undermines the professional basis for future career development. Additionally, empirical findings reveal that the distribution of the gender training gap by age is inverted-U-shaped. The seminal work of Fitzenberger and Muehler (2015) shows that the gender training gap is close to zero at the age of 25, increases thereafter, peaks at the age of 35, and finally reduces at the age of 50. There is no catch-up in the gender gap after childbirth. Divergences in training participation can be mainly attributed to differences in employees’ characteristics, such as wages, working time, and position within the firm. Investment in training is also based on the expected time workers spend within the provider firm. Accordingly, marginal workers, such as part-time and temporary workers, would be less involved in training activities because the shorter the expected residual employment duration of women, the less inclined firms will be in providing them with training (Lössbroek & Radl, 2019). Such penalisations affect women’s productivity and, thus, their future career prospects.

2.2 Middle-Aged Careers

Gender differences in labour market outcomes do not exhaust in the early phase of workers’ careers but continue to be observed under different forms throughout the entire life cycle. Gender gaps became more pronounced in the middle phase of the life cycle. The middle-aged group includes women who already had their first job experience and those who participated in training courses for general and firm-specific skill formation. It also concerns long-term unemployed women and inactive women. More importantly, this age group includes women in their maternity years.

A few years after college completion, women experience more unsecure employment trajectories characterised by longer unemployment spells, lower wage profiles, and accumulated experience (Berloffa et al., 2020). Women also experience lower wage returns to occupational mobility, which reduces the steepness of their wage profile as well as their occupational prospects due to job changes (Reshid, 2019). Differences in human capital endowments do not exhaustively explain the differences observed in the labour market between women and men. Compared to men, middle-aged women exhibit stronger geographical restrictions in their job search (Eriksson & Lagerström, 2012; Petrongolo & Ronchi, 2020), thus do not apply to employment positions offering higher wages and better occupational prospects than those at the local level (Fuchs et al., 2021). The gender gap in commuting distance was particularly pronounced among mothers. Their greater share in family responsibility makes them reluctant to accept or look for a job that is far located, even at the cost of lower wages. The effects of a restricted job search area are likely to result in lower wages and longer unemployment spells, especially for women living in the peripheral regions. This exacerbates the gender pay and employment gaps among middle-aged workers.

The wage differential is the most studied outcome through which to look at gender differences in the labour market. The gender-based pay gap varies across countries, regions, sectors, and wages. Different countries are characterised by different economic institutions, national legislation, and sociodemographic and cultural factors that affect the labour income received by employed women. Different childcare provisions and wage-setting institutions are likely to account for variations by country (Arulampalam et al., 2007; Francesconi & Parey, 2018; Kuitto et al., 2019). Moreover, the general gaps in labour earnings are wider in countries where part-time and temporary jobs are more widespread (Berloffa et al., 2020). The fact that women are more often employed under these types of contracts increases the gender pay gap at the bottom of the wage distribution, the so-called sticky floor effect. The gender pay gap also increases at the other extreme of wage support, the so-called glass-ceiling effect. This is explained by the lower intra-firm mobility among female workers, resulting in fewer supervisory and top positions offering greater remuneration (Fuchs et al., 2021). Women are less inclined to negotiate aggressively (Casarico & Lattanzio, 2023). Differences in return to mobility also explain the divergent pattern at the end of the gender-based pay distribution. Del Bono and Vuri (2011) provide evidence of Italian workers during the first 10 years of labour market experience. The estimated returns of job mobility account for 30% and 8% of the wage growth for men and women, respectively.

One dimension of the gender pay gap that has received little attention is territorial dispersion. Fuchs et al. (2021) showed that wage differences by gender vary considerably for Germany at the NUTS-3 level, ranging from negative values to beyond 40%. Focusing on the determinants of the gender pay gap across regions, the findings reveal that job characteristics and the presence of large firms are relevant for regions with a high gender pay gap. Individual characteristics are more important in areas with a low gender-based pay gap. Differences were also observed between urban and rural areas in the same region. Estimates for full-time workers in Germany reveal that the gender pay gap in rural areas is around 10% and has remained stable for over three decades (Hirsch et al., 2013). A similar conclusion is reached with reference to Spanish regions, which show substantial heterogeneity in the size of the gender gap, roughly comparable to cross-country differences in Europe (Murillo Huertas et al., 2017). The geographical distribution of industries, interacting with the lower mobility of women constrained by family-related reasons, substantially contributes to the persistence of regional dispersion of the gender pay gap (Iammarino et al., 2019).

Another relevant dimension on which gender differences have been studied is labour supply. Estimates of different labour supply elasticities and, more recently, of reservation wages confirm that women and men behave differently in the labour market. Job preferences are shown to be relevant in explaining gender differences in employed wages, not only at the top of the wage distribution (Casarico & Lattanzio, 2023; Redmond & McGuinness, 2019). According to the empirical literature, women have higher labour supply elasticity than men (Bergemann & Den Berg, 2008; Evers et al., 2008). A simple explanation relies on the ‘Le Chatelier principle’: individuals with more options have a more elastic supply function (Bergemann & Den Berg, 2008). In fact, in the labour market, family and house management represent an exit strategy for women’s decision-making problems. Additionally, Alesina et al. (2011) show that higher bargaining power for the family, higher wages, and lower home productivity are sufficient conditions to reproduce gender differences in labour supply elasticities. Males are often family members committed to a career with longer working hours and fewer home duties. Indeed, what matters in the household is the economic organisation as primary and secondary earners within the partnership. On this point, the recent work of Bartels and Shupe (2022) shows, for the first time, that gender differences in the extensive margin responses of labour supply dissipate among individuals with the same earner’s role, that is, within primary and secondary, within the household. The results also show a high degree of heterogeneity across countries in the EU, with Italy, Germany, and Spain among the countries with the highest labour supply elasticity of secondary earners.

Regarding the extensive margin of labour supply, reservation wage (a monetary measure for job preferences) is a crucial factor in explaining gender differences in labour market outcomes (Brown et al., 2011). Interestingly, Caliendo et al., (2017) found that in Germany, controlling for reservation wages in an otherwise standard Blinder–Oaxaca decomposition halves the magnitude of the gender gap in realised wage. Women have lower reservation wages than men because of both personal (e.g. age and labour experience) and job characteristics (e.g. wage and geographical location). Preferences for nonwage job characteristics may affect the reservation wage gap between females and males. The presence of children, particularly pre-age schoolchildren, is relevant in explaining the gender gap in reservation wages (Brown et al., 2011). Focusing on Italy, Brown et al. (2022) further estimated the gender reservation wage gap along the entire support of the reservation wage distribution and across regions. Women and men have similar reservation wages at the bottom of the distribution, but they differ for larger values. From a geographical perspective, the gender reservation wage gap is higher in the south than in the more industrialised north of Italy. Remarkable differences at the regional level once again highlight the role of policy differentiation in reducing gender gaps in the labour market. The same policy intervention implemented across different regions is likely to produce heterogeneous effects because the responsiveness of women to policy incentives is different.

Having children has the greatest impact on women’s labour careers. Repeated spells of non-employment, that is, unemployment and inactivity, are often related to periods of childbearing and/or housing chores which reduce the possibility of successfully re-entering the labour market. In this respect, women are more penalised than men. Empirical evidence from more than two decades shows that career quality never returns to a level prior to non-employment spells (Manzoni & Mooi-Reci, 2020). Of course, the effect of maternity on female employment outcomes depends on country-specific and historically dependent economic, political, and cultural factors (Alesina et al., 2013). In most European countries, where the male breadwinner social model is still culturally vigorous (e.g. Southern European countries), the gender gaps in employment and wages are larger than in countries where anti-egalitarian views are weaker (e.g. Scandinavian countries) (Fortin, 2005). Episodes of motherhood are known to penalise women also compared to childless women, i.e. the so-called motherhood gap (Budig & England, 2001). Compared to childless women, mothers are likely to earn less because being engaged in childcare leads to losing job experience, being less productive at work, and trading-off higher wages for mother-friendly jobs located closer to the area where they live. According to a survey by Cukrowska-Torzewska and Lovasz (2020), several mechanisms are in place. While the gap associated with one child is driven by the mother’s preference for jobs that pay less, the gap for mothers with at least two children is mainly due to human capital depreciation. The motherhood gap is small in Nordic countries, Belgium, and France, where public policies actively support gender equality. In contrast, Central and Eastern European countries have the largest motherhood gap. The motherhood gap in Southern European countries is small, mainly due to low female employment rates.

The reconciliation of work and family is fundamental in this sense, as it ensures equal treatment between women and men in the division of housing chores and, consequently, in the labour market. Cross-country empirical literature on the use of time confirms that women employ more time in housing chores than men. Kuitto et al. (2019) show that, in Finland, the duration of parental leave for women is more than ten times greater than that of men. Similarly, Anxo et al. (2011) and Gimenez-Nadal and Alberto (2022) found that women in Europe spend more time on unpaid work and childcare. Greater responsibility for housing chores and childcare also affects women’s attitudes towards commuting. In the Netherlands, the effect of homemaking on commuting is twice as difficult for women as compared to men, whereas childcare time only affects women’s commuting time (Gimenez-Nadal & Molina, 2016). Commuting entails monetary and non-monetary costs, such as the cost (time, physical) of travelling and the cost of delegating childcare activities to third parties (e.g. nannies or parents) or institutions (nursery, kindergarten, school). Accordingly, the distance from employment opportunities and the cost of reaching them affects the cost opportunity to work. This result can be associated with the fact that women are employed more in sectors such as service, teaching, and personal care which are less geographically concentrated compared to other economic sectors.

The weak spatial mobility of productive factors hinders not only the process of regional convergence but also the closing of the gender gap at the national level. Indeed, as expected from neoclassical economic theory (Blanchard et al., 1992), geographical labour mobility acts as an adjustment mechanism to macroeconomic shocks and territorial imbalances. This argument is also supported at the empirical level, for example, Niebuhr et al. (2012) for Germany 1995–2005. Unfortunately, the national labour markets of most European countries are still characterised by persistent regional disparities. The peripheral regions (e.g. southern Italy and Spain) have continued to be more exposed to a long-term decline in employment and competitiveness. However, the core areas of some metropolitan regions (e.g. northern Italy, southern Germany, Benelux, and Austria) have attracted a higher share of high-job and innovative employment initiatives. The function of market forces has not led to regional convergence in economic performance, but rather to the concentration of income and employment in high-growth regions. Economic and financial crises in the last two decades, as well as the COVID-19 experience, have weakened the convergence power, typically of a period of prosperity (Iammarino et al., 2019). Policy interventions are thus necessary to restore economic growth in depressed areas and to sustain improvements in terms of gender equity.

Women continue to experience different treatment in the labour market in the middle of their life cycle. Initial differences in the field of study, as summarised by the substantial gender gap in STEM disciplines, can only partially explain the segregation of women into part-time and temporary jobs in the service sector. Additional factors, both from the supply and demand sides, enter into play when women transition to the intermediate phase of their active life. Women of these ages show lower labour market attachment than young female workers, mainly because of the experience of motherhood. Family ties also impose restrictions on geographical preferences in job search. The overall situation in the labour market for middle-aged women, compared to men, is of larger amplitude. Longer nonemployment spells and human capital depreciation hinder the possibility of closing gender differences in employed wages and occupations. Furthermore, the presence of children constrains mothers’ ability to find or maintain employment within a reduced search radius, since the commuting attitude reaches a minimum during motherhood. This ties the development of women’s employment to local economic dynamics.

Gender wage, occupational, and mobility gaps in middle-aged workers’ careers were more pronounced than in the extreme part of the life cycle. Different policies should intervene at different points in the wage distribution to close the gender pay gap in labour earnings. Minimum wage policies reduce wage inequality at the bottom of the wage distribution. The same effect is exerted on the distribution of the gender pay gap by increasing the remuneration level of workers employed at less than the minimum wage. Since a large proportion of women is employed at the bottom part of the wage distribution, often associated with non-standard contractual arrangements, raising the lower boundary of the employed wage reduces the gender difference in the employed wage at the national level. Regional studies also confirmed the beneficial impact of raising the minimum wage. Robinson (2005) documents for the United Kingdom that the largest beneficial effect is expected in low-wage regions; that is, in those regions where the share of low-paid female workers is the highest. Bargain et al. (2019) document that the implementation of minimum wage policies in 1999 can close the gender gap at the bottom of the wage distribution. See Caliendo and Wittbrodt (2022) for a recent contribution to German data. In the upper part of the distribution, gender employment quotas on company boards and other top positions may contribute to reducing the wage distance between males and females. Bertrand et al. (2018) studied the effect of a reform in Norway by introducing a gender quota of 40% on the boards of publicly limited companies. The reform was successful in reducing the occupational gap, especially for top positions, and the wage gap, particularly for higher values of support.

Different other policies have been adopted to counteract the negative effects of labour market forces on women’s labour market outcomes. Bergemann and Den Berg (2008) were seminal in surveying the literature on ALMPs. Focusing on European women aged 25+, which are often the target of ALMPs policies, it emerges that the employment effect of training is positive, especially in those territories where women’s participation is lower. More recently, Card et al. (2018) reviewed approximately 200 articles on ALMPs and confirmed that training policies are beneficial for women’s employability. In general, programmes that favour human capital accumulation are associated with the largest gains for women. The findings also reveal that the programme becomes effective only for a couple of years after completion of the programme. By contrast, the effects are almost nil in the short run, whereas women find fewer opportunities through job search assistance programmes, such as job consulting and interviews. Of course, the success of ALMPs depends on the local labour market conditions. As shown by Altavilla and Caroleo (2013), ALMPs are more effective in Italian regions with high employment and vacancy rates. In contrast, they are less effective in regions characterised by high unemployment rates, lower vacancy rates, and lower wages. It also results that the richer North uses more training programmes compared to the South, where employment incentives are preferred as ALMP instead. Regarding training policies, evidence across European countries confirms that middle-aged women participate less. Focusing on German workers aged 25–50, Fitzenberger and Muehler (2015) provided the first estimates of the gender training gap. Under these conditions, it is likely that gendered fiscal policies target low-skilled individuals, secondary earners, and other workers with weak labour market attachment. Another successful ALPM experience is the introduction of a hiring incentive through a reduction in the payroll tax rate. Under this gender-differentiated regime (Alesina et al., 2011), firms are expected to hire cheaper female workers. Rubolino (2022) analyses the change in the female payroll tax rate introduced in Italy in 2013. The tax cut generated long-lasting growth in female employment and reduced the time spent under income assistance programmes. Taxing women less because of their higher labour supply elasticity is theoretically optimal (Alesina et al., 2011). Gender-differentiated taxation allows the realisation of large welfare gains, since the aggregate social loss from distortionary gender-neutral labour income tax is reduced. See also OECD (2022) for consideration of the role of gendered taxation. Additionally, start-up subsidy programmes, as an alternative form of incentive for female employability, may be effective in reducing gender gaps. The case of a start-up subsidy programme for Swedish job-seekers, as documented by Månsson and Delander (2011), reveals that women participating in the program had higher success in running a business than non-participating individuals, but lower success rates than participating men.

Another possible policy channel through which to reduce gender gaps in the labour market is to increase the geographical mobility of employed women (Le Barbanchon et al., 2020). This could also be beneficial from the perspective of reducing gender wage and occupational gaps. In this sense, gender-responsive policies in the labour market are extended to the sphere of urban planning and transportation. These interventions may reduce the time and monetary costs of reaching core areas from the peripheral regions. A successful policy experience in this sense is that of Germany, as examined by Caliendo, Künn, and Mahlstedt (2017). In this case, the results reveal that jobseekers participating in the subsidy programme and moving to a distant region received higher wages and found more stable jobs compared to non-participants. The availability of benefits successfully increased the quality of job matches by increasing the geographical mobility of female job-seekers, as predicted by economic theory (Blanchard et al., 1992).

The role of maternity remains predominant in determining the different wages and employment patterns between women and men. Women, when they come to mothers, start to prioritise family affairs over their own labour careers, which are strictly influenced by local economic and employment dynamics. The success of a given ALMP strictly depends on the local labour market conditions; therefore, nationwide labour market programmes may not guarantee to produce improvements homogeneously across all regions. Certainly, if not effective, corrective policies may exacerbate gender differences in the labour market in older age groups. In contrast, if risk factors for wage and occupational differences are correctly targeted, then the initial gender-related disparities may not accumulate in the middle phase of women’s life–work cycle.

2.3 Late Careers

Thus, analysing gender gaps in the late phase of a working career becomes a politically relevant issue. In fact, the share of older workers in the labour market is increasing in the context of population aging and increasing women’s participation. If one also considers that the mortality patterns of women are lower than those of men, then a higher number of women are expected. When workers approach the end of their life cycles, gender disparities are likely to widen. Women continue to be discriminated against as compared to men because of their aging. See Duncan and Loretto (2004) and, more recently, Lössbroek and Radl (2019) for a discussion of gendered ageism. Indeed, in terms of perceived discrimination, age places before gender and ethnic discrimination in the workplace. See Ayalon (2014) for a study on European countries using the European Social Survey.

Women in their late careers behave differently from women in their middle ages. Older women are likely to have experienced episodes of motherhood, being long-term unemployed or inactive, working under non-standard contractual arrangements, and being stuck in flat career profiles (Fuchs et al., 2021). The employment conditions of older female workers are expected to increase the gender pay gap at both extremes of wage support. Women with low labour market experience, often employed in marginal jobs, and women with low work intensity, employed in part-time contracts, would increase the gender differences at the bottom (Robinson, 2005; Bertrand et al., 2018; Redmond & McGuinness, 2019). On the top side of wage distribution, occupational segregation in non-technological sectors and flatter career progressions contribute to increasing the wage difference between women and men (Del Bono & Vuri, 2011; Casarico & Lattanzio, 2023; Fuchs et al., 2021). The lower geographical mobility of women, which already affects the perspective of careers in the middle phase, ties further the wage and employment profiles of women to the economic dynamics of the area in which they live with their families (Gimenez-Nadal & Molina, 2014; Perales & Vidal, 2015; Gimenez-Nadal & Molina, 2016; Iammarino et al., 2019; Fuchs et al., 2021). This effect is stronger at older ages since it is less likely that women will change jobs and locations when the search effort is higher for a higher cost of commuting (Chéron et al., 2013). Search costs may also increase because of the deterioration of health conditions. Cross-country analyses of the gender gap in self-rated health and longstanding illness reveal that women report worse health conditions than men, especially in Southern Europe where female unemployment and inactivity rates are higher compared to other parts (Dahlin & Härkönen, 2013; Palència et al., 2014). Some stylised facts also operate on the labour demand side. In general, older workers experience longer spells of unemployment because of their approaching retirement age. Considering the age distance to retirement as a proxy for the residual employability of workers, employers are less likely to hire older workers. The so-called time-horizon effect (Chéron et al., 2013; Hairault et al., 2015), when related to gendered issues, further hinders the possibility of women successfully re-entering the labour market after a period of inactivity or long unemployment spells in their later careers.

In this respect, training policies can be conceived as a part of a lifelong learning strategy. Older workers, especially women, can profit from opportunities to update their skills after a period of depreciation in human capital. This step is particularly important in the era of continuous technological processes. One would expect increasing participation of women and men in training courses once obsolescence affects their working performance and reduces the possibility of prolonging their working career. Unfortunately, the empirical evidence contradicts this conclusion. As documented by Lössbroek and Radl (2019) for nine European countries in 2015–2016, participation in both educational and on-the-job training activities is far lower among employees aged 50+ than among younger workers. Moreover, women continue to participate less than men do in their training activities. On the one hand, low work intensity and accumulated experience disincentivised women from undertaking training courses. However, employers can be reluctant to offer training courses. This is the case for part-time and temporary workers and women working in small firms (Lössbroek & Radl, 2019).

Women in their late life cycle also face a higher risk of widowhood than their male counterparts (Ahn, 2005; Werding, 2008; Sánchez-Marcos & Bethencourt, 2018; Nicholas & Baum, 2020; Peña-Longobardo et al., 2021). The widowhood risk increases with age, and the mortality profiles of men are higher at 50+ years than those of females (Nicholas & Baum, 2020). Widows remain responsible for household care during widowhood (Vara, 2013). Peña-Longobardo et al. (2021) further distinguish between the short-term and long-term consequences of widowhood. In the short run, financial and mental health are mainly affected. In the long run, the rearrangement of formal and informal provision of care has been settled. In economic terms, the risk of widowhood represents a huge income shock for a household as an entity. In fact, the survivorship pension is an important redistributive policy instrument that alleviates the risk of poverty among older women (Ahn, 2005; van der Vaart et al., 2020). Depending on the generosity of the welfare system, the magnitude of the survivor pension can trigger an opposite effect on the widow’s labour supply. If an income effect prevails, widows can be drawn from the labour market; if the opportunity cost of not working shrinks, then widows enter out of inactivity or remain active in the labour market (Kim & Rizzi, 2020). Indeed, of the two, more often the first occurs since the provision of a survivor pension reduces labour supply (Werding, 2008; Sánchez-Marcos & Bethencourt, 2018).

Given the different employment patterns throughout their entire activity period, women and men do not exhibit the same retirement behaviours. Women usually retire earlier than men do for several reasons (König, 2017; Riekhoff & Järnefelt, 2017; De Luigi et al., 2021). First, retirement schemes maintain a lower retirement age among female workers. However, conformation to European directives calls for the homogenisation of retirement ages between women and men. Second, as noted by Dahlin and Härkönen (2013) and Palència et al. (2014), women may end up their careers with health-related problems more than men due to their longer employment in labour-intensive industries, such as manufacturing and personal care. Health deterioration may also be a consequence of widowhood (Peña-Longobardo et al., 2021). Third, in the role of secondary earners and care providers within the household (Bartels & Shupe, 2022), women may withdraw from the labour force as soon as the eligibility requirements are satisfied independently of the level of their pension entitlement. It has also been found that women retire later than the statutory retirement age if they are less educated (De Luigi et al., 2021) and those who need to compensate for lower lifelong earnings (Riekhoff & Järnefelt, 2017; Kim & Rizzi, 2020). In contrast, highly educated women and public employees retire earlier than their male counterparts (Riekhoff & Järnefelt, 2017; De Luigi et al., 2021). Women’s retirement choices are also somehow linked to those of the primary earner partner (Michaud et al., 2018). Finally, women’s decisions to retire also depend on the institutional setting of the public pension system–that is, on the pension formula of the pension regime. Defined-benefit types usually incentivise early retirement because pension benefits are less elastic to a few years of additional contribution if they do not alter the reference wage. In contrast, defined-contribution pension systems incentivise workers to prolong their working careers because of the direct link between pensions and accumulated contributions.

Labour market differences are the main drivers of the resulting gender gap in pension income (Lis & Lis, 2019). Bonnet et al. (2022) provide the first estimates of the gender gap along the pension distribution for France. The findings reveal that these differences are mainly due to differences in career length. Moving along the distribution, the gender pension gap increases, and the role of wages gradually becomes more important. In the upper decile, the gender pension gap is more pronounced and depends entirely on the wage differences. The gender pension gap is wider in the private sector than among civil servants since public careers are traditionally less fragmented and not characterised by long periods of inactivity.

On average, women are entitled to smaller pensions but experience a longer retirement period than men. Due to biological differences, women outlive men. The differences in total pension wealth, defined as the product of pension income and expected payment duration, are lower than the gender gap in pension income. Moreover, systematic gender differences in longevity are responsible for the implicit transfer of resources from short- to long-living pensioners (Ayuso et al., 2016). The adoption of population-wide pension parameters in the calculation of annuity triggers a transfer mechanism of public resources penalising men for living shorter but favouring women for living longer than imputed at the national level. As shown by Culotta (2021), for Italy, the implicit tax/subsidy mechanism is more intense in regions where gender gaps in the labour market are higher. Regional dispersion in implicit subsidy is higher among females than males, reflecting a higher dispersion in longevity at retirement among women.

A policy that is found to have an impact on the gender pension gap is the provision of a minimum level of pension. This mechanism is similar to increases in minimum wage (Robinson, 2005; Bargain et al., 2019; Caliendo & Wittbrodt, 2022). Aimed at reducing poverty among retirees, increases in the minimum pension reduce the gender pension gap in the lower part of support. As empirically shown by Bonnet et al. (2022), a positive effect mainly occurs in the first decile among private workers. The gender pension gap in the first decile is even larger in the absence of this safety measure. Instead, the minimum pension is insignificant for explaining the gender pension gap among retired civil servants. The relative advantages of women in the public sector would provide an additional explanation for their over-representation in public administration (Bonnet et al., 2022). Pension reforms proceed along with increases in retirement age, often automatically linked to continuous longevity gains. Shifts towards defined contribution pension regimes increase the elasticity of pension annuity to the whole career dynamics. Hence, in principle, the elasticity of the gender pension gap to variations in gender pay and employment gap increases. In general, pension policies aim to alleviate poverty among retirees, as with the institution of pension minimums, and they act as income-maintenance devices, as in the case of old-age pensions. Gender-differentiated pension policies could improve the well-being of retired women but could not close the gender gaps in the labour market. When women approach retirement, policy intervention aimed at reducing gender differences in labour market outcomes can easily vanish because of their interaction with pension policies which, instead, influence withdrawal from the labour market.

3 Gender Gaps and Fiscal Policies: A Regional Perspective

So far, we have seen that women in the labour market are generally penalised compared to men in a variety of ways throughout their life cycle. As widely documented in the empirical literature, gender gaps are almost insignificant at the time of entry into the labour market. The only relevant difference that emerges from studies focusing on the early school-work transition is the role of the field of study. Women are enrolled more in non-STEM disciplines than men, giving rise to the so-called gender STEM gap (Casarico et al., 2016; Dilli & Westerhuis, 2018; Francesconi & Parey, 2018; Fuchs et al., 2021). This gender difference then results in the self-selection of young women in economic sectors, such as healthcare, teaching, and manufacturing. In contrast, men are employed more in the industrial, technological, and innovative sectors. Compared to female-dominated jobs, male-dominated jobs offer a more stable employment career with higher wages and growth profiles. A few years after their entry into the labour market, women and men have already exhibited persistent differing dynamics in further labour market outcomes (Del Bono & Vuri, 2011; Fitzenberger & Muehler, 2015; Brzinsky-Fay & Solga, 2016; Acosta-Ballesteros et al., 2017; Berloffa et al., 2019a, 2019b; Reshid, 2019; Berloffa et al., 2020). Typically, women are associated with a lower accumulation of labour market experience, human capital, and longer spells of unemployment and inactivity. Women are also more concentrated among part-time and temporary workers (Booth et al., 2002; Faccini, 2014; Lössbroek & Radl, 2019; Berloffa et al., 2020). Lower returns in occupational mobility, together with flatter wage profiles of female-dominated sectors compared to male-dominated sectors, represent additional factors feeding the distance in labour earnings between female and male workers. The gender pay gap is persistent across the entire wage distribution, and across countries. The differences are more pronounced at the bottom (Robinson, 2005; Bargain et al., 2019; Caliendo & Wittbrodt, 2022) and top of the wage distribution (Bertrand et al., 2018; Casarico & Lattanzio, 2023; Fuchs et al., 2021).

A common factor in all of these gender gaps is the role of maternity. Becoming a mother is associated with a further wage penalty compared with childless women, that is, the so-called motherhood gap (Budig & England, 2001; Cukrowska-Torzewska & Lovasz, 2020). Episodes of maternity, often leading to long inactivity spells, substantially contribute not only to human capital depreciation but also to undermining their future career prospects (Manzoni & Mooi-Reci, 2020). Gender differences in the labour market have been linked to lower geographical mobility. Family ties restrict mothers’ job searches to local vacancies, which in turn limits their career prospects to economic dynamics at the local level (Perales & Vidal, 2015; Gimenez-Nadal & Molina, 2014, 2016; Nisic, 2017; Petrongolo & Ronchi, 2020; Fuchs et al., 2021; Le Barbanchon et al., 2020). Women select jobs paying lower salaries but are more compatible with family care. Women also invest less effort in work and are less oriented towards occupational careers (Cukrowska-Torzewska & Lovasz, 2020). These differences are more pronounced for women living in peripheral regions than for those living in more densely populated areas, such as metropolitan cities (Nisic, 2017). Gender occupational segregation is contingent on the local industrial context (Perales & Vidal, 2015). Core economic areas are more dynamic and competitive. Thus, gender-related discrimination is lower in these areas (Fuchs et al., 2021). In contrast, gender gaps are larger in regions characterised by a lack of large and innovative firms, poor-performing local labour markets, depressed economic areas, and a more aged population. As geographical mobility is expected to continue to decrease with age, the possibility of recovering maternity employment patterns at the end of the life cycle is very low. The closer one is to retirement, the higher the probability of non-employment (Chéron et al., 2013; Hairault et al., 2015). Overall, these considerations deliver two messages for policymakers who want to embrace a gendered perspective in the design of labour market policies. First, the older the targeted women, the less effective the policy because the possibility of retirement may undermine the validity of the intervention. Second, policy interventions should be addressed by local authorities since they understand the local economic reality better than national decision-makers. The resulting decentralisation calls for coordination between national and regional governance and the quality of the latter. There is a role for both national and regional economic policies in mitigating the regional dispersion of gender gaps in the labour market. In contrast, the implementation of nationwide labour market policies may generate asymmetric effects in countries characterised by a marked regional dispersion in labour market performance (Altavilla & Caroleo, 2013).

For example, training policies aim to counteract possible mismatches in the labour market and, in general, increase the employability of targeted participants. If combined with other ALMPs, such as job assistance programmes, skills assessment, and job counselling, they increase their effectiveness (Bergemann & Den Berg, 2008). However, the adoption of a nationwide perspective does not necessarily match the industrial characteristics and needs of some regions. The uneven geographical distribution of firms providing training exacerbates the regional disparities in gender gaps. Likewise, training policies targeting specific groups of women may produce negative collateral effects in the presence of uneven geographical distribution of participants. The implementation of other types of ALMPs is also affected by regional disparities in national labour markets. Employment subsidies, ranging from job creation in the public sector to hiring subsidies and start-up grants in the private sector, would be effective if not aligned with local economic and demographic conditions. ALMPs helping female job seekers should be tailored to the effective employment opportunities available in that region if the final goal is to improve the matching process between women and jobs. On this point, Wapler et al. (2018) and Wapler et al. (2022), who examine the effect of different labour market policies across German regions, stress the distinction between low and high-unemployment regions, since many effects of ALMPs could vary with respect to local labour market conditions. Wage subsidy programmes work better in low-unemployment regions, while vocational and in-firm training are more beneficial in high-unemployment regions. In addition, Altavilla and Caroleo (2013) find that northern Italy, the richest part of the country, uses more training programmes compared to the south, where employment incentives are preferred. However, what matters for the effectiveness of ALMPs across regions depends on the number (and type) of vacancies. Wapler et al. (2022) found that if there are a high number of vacancies per unemployed in low-unemployed regions, the potential for participants might be relatively high, as improvements in their employability more easily lead to employment. The opposite situation occurs in regions with high unemployment rates, where labour markets are slack and the bargaining power of firms in relation to jobseekers and public employment services is higher.

Another prominent policy for reducing the gender gap in employment is the introduction of gender quotas. The imposition of a larger share of women leads to a reduction in the gender employment gap and the wage pay gap along the entire wage distribution. In particular, Bertrand et al. (2018) document positive effects in the upper part of the wage distribution from the introduction of gender quotas on the administrative boards of public limited companies in Norway. Instead, raising the minimum wage reduces the gender pay gap at the bottom part of the wage distribution. However, when regional peculiarities are considered, the policy’s effectiveness cannot be guaranteed homogenously across all regions. For example, in the case of minimum wage policies, the effect is larger in regions where women are highly concentrated in low-paid jobs (Bargain et al., 2019; Caliendo & Wittbrodt, 2022). The effectiveness of the introduction of gender quotas on the administrative boards of private firms strictly depends on the presence of large firms in that territory. In regions where large firms are scarce or even missing, the effect of gender quotas on women’s employment and wages is likely to be lower, simply because fewer firms in that region will change their board composition. Cuts in female payroll tax can also reduce the gender pay and employment gap (Alesina et al., 2011; Rubolino, 2022). Under this programme, the lower cost of hiring women incentivises employees to balance their staff. Clearly, the level of employment incentive will drive the magnitude of the tax cut as well as the skills of women entering employment. From a regional perspective, it is likely that areas with small and medium firms will not make larger use of this subsidy compared with more developed and dynamic regions. To increase policy effectiveness in the context of persistent regional differences, it is necessary to know the causes of unemployment and inactivity among women at the local level. Demand-deficient unemployment in a region requires the creation of more jobs in that territory. Structural unemployment due to a persistent mismatch between labour supply and demand should be challenged with ad hoc interventions in terms of educational policies and mobility programmes (van Dijk & Edzes, 2016). These programmes, if aligned with the economic characteristics of a region, can reduce the mismatch both vertically, owing to the overeducation of women (Robst, 2007; Acosta-Ballesteros et al., 2017), and horizontally, as implied by different fields of study (Francesconi & Parey, 2018; Fuchs et al., 2021). Mobility programmes can counteract the lower mobility of women and, through this channel, reduce the geographical mismatch between women and job characteristics (Caliendo, Künn, & Mahlstedt, 2017).

National policies should embrace the goal of achieving development in all types of regions and should not be based on an abstract notion of convergence and redistribution. The lower geographical mobility of women compared to men, which can be assumed to increase with age, at least after maternity, imposes greater attention on the regional dimension of gender-responsive policies promulgated at the national level. A one-size-fits-all approach may be asymmetrically effective in this respect. In several countries, since the 1990s, there has been a tendency to decentralise labour market policies (van Dijk & Edzes, 2016). Since then, national policymakers have acquired greater awareness of the local dimensions of the economies in their policy formulation. Two types of decentralisation policy can be distinguished: programmes that are designed at the national level and implemented at the regional level, and those where the power to design and implement is assigned at the regional level. In the first case, space-neutral policies of the labour market assume that labour is highly mobile. In contrast, place-based theories emphasise the localness of possible labour market failures and economic institutions. Hence, gender-responsive fiscal policies should be tailored to the specificities of all regions, particularly in Europe, to increase their effectiveness at the national level. Instead, space-neutral policies can be effective in more developed regions and mask failures in others (Iammarino et al., 2019). Gender-differentiated regional labour market policies can provide better adherence to the local nature of economies and reduce the various forms of the gender gap.

Unfortunately, the implementation of gendered policies at a regional level does not seem to produce definitive results in many European countries. Scandinavian countries have a long tradition of gendered regional policies in the labour market. For example, in Norway and Sweden, gendered regional policies were already operationalised in the late 1970s with the goal of increasing female employment and entrepreneurship in rural areas (Rönnblom, 2005).Footnote 3 In the rest of Europe, the integration of the gender perspective into the content of regional policies was later conceived as a policy paradigm. Over the past two decades, cohesion policies have been successful in reducing regional disparities by bridging the gap between high- and low-income regions in the EU (Arbolino et al., 2020; European Commission, 2022). However, the effects of European cohesion policies on women’s performance in the labour market are conditional on the quality of the institutions in the respective regions (Cerciello et al., 2019; Arbolino et al., 2020). As Cerciello et al. (2019) show, for Italy over the years 2007–2013, the absorption of European funds is strongly associated with the quality of institutions. Arbolino et al. (2020) further stressed that improving the quality of regional institutions is not a short-term goal, but it implies removing those factors that impede the exploitation of the potential of employed women (Arbolino et al., 2020). Poor institutions constitute a crucial obstacle to the development of growth-promoting factors, such as competitiveness, entrepreneurship, and the capacity to innovate and create jobs (van Dijk & Edzes, 2016; Iammarino et al., 2019). Similarly, weak coordination between national and regional actors can harm the correct understanding of policy content and, to a greater extent, compliance with what was originally designed. Spain and Sweden’s experience in the management of European social funds from 2007 to 2013 is indicative in this respect. National and regional actors who were interviewed claimed that there was no organic collaboration between them (Carlsson, 2020).

Instead, more fluid coordination between national and local governors is essential to guarantee correct comprehension, implementation, and monitoring of gender-responsive labour market policy across regional decision-makers. Obviously, some regions are more capable than others of managing external funds and coordinating with other institutional actors. In these regions, it is likely that the gendered labour market policy will have a higher chance of being more effective than regions lacking a sound and qualified institutional organisation (van Dijk & Edzes, 2016; European Commission, 2022).

4 Concluding Remarks

Reducing gender differences in labour market outcomes remains one of the most pressing challenges for developed economies. One of the tasks of the Gender Equality Strategy 2020–2025 is closing gender gaps in the labour market (Rubery & Tavora, 2021). While the gender gap in education is being closed, gender gaps in employment, pay, family care, power, and pensions persist in most European countries. Differences in labour market outcomes between women and men have been increasing since the 2008 financial crisis and the subsequent turbulent periods (European Commission, 2022). They did so during these years of COVID-19 (Queisser, 2021). The impact of an economic crisis propagates along the national territory but at different intensities. Some areas recover faster than others and are supported by a more resilient economic environment. Instead, labour market dynamics in peripheral regions recover slowly. This feature also affects the effectiveness of labour market policies aimed at reducing gender-related differences across regions. The presence of persistent territorial differences within a national territory highlights the importance of cohesive policies. The European Commission has actively considered regional convergence through regional cohesion policies. EU regional policy is one of the world’s largest public policies in terms of budget size, accounting for approximately one-third of the EU’s total budget (Carlsson, 2020). It is a comprehensive macroeconomic redistribution policy aimed at reducing territorial, economic, and social disparities within the EU by promoting and financing projects. Following the contraction of national public investment owing to financial and economic crises, cohesion policies have become a more important source of public investment. European cohesion policies remain the main policy channel to reduce gender gaps at the local level and increase regional convergence in this respect.

There is a growing consensus in the literature about the importance of acting locally to reduce gender gaps at the national level. Regional characteristics, including the quality of local institutions, become important strategic variables when considering the implementation of a given policy along the national territory. Failures in understanding the sources of regional imbalances as well as policy content are likely to weaken the potential effects of the implemented policy. Likewise, coordination between central and local decision-makers is crucial in determining the adherence of a policy to local regions. Unlike in developed regions, labour market forces operating in developing regions are not sufficient to increase employment opportunities for women. Furthermore, the lower geographical mobility of women stresses the role of local decision-makers from conception to the monitoring of gender-responsive policies in labour markets. Actions tailored to the specific economic and sociodemographic conditions of the territory are instrumental for inclusive growth (European Commission, 2022).

The 2030 Sustainable Development Goals set by the European Commission explicitly consider gender equality as one of the most urgent issues for future sustainability-oriented policies. The possibility of reducing gender gaps is known to boost economic growth by increasing employment and competitiveness, and reducing poverty (Morais Maceira, 2017). Apart from concrete measures, changes in gendered values and the social role of women substantially contribute to the equalisation of labour market conditions between women and men (Fuchs et al., 2021). Of course, if effectiveness is also desired at the cultural level, gender-responsive policies in the labour markets should be prolonged to reduce barriers between female- and male-dominated sectors and occupations (Dahl et al., 2021). The distinctive historical and institutional characteristics of each (local) economic system are influenced by strong cultural underpinnings (Kushi & McManus, 2018). The duration of the intervention is thus expected to last longer, particularly in developing regions, than in more developed subnational areas. Skill endowments are still unevenly distributed and concentrated in more developed regions, especially the capital regions. Entrepreneurship, which is critical for economic growth, tends to be concentrated in large cities. Large and dynamic firms create jobs in low-growth regions. Investments in technological infrastructure, skills, innovation, and governance will drive regional convergence in the coming years. Smart specialisation strategies, introduced in Cohesion Policies 2014–2020, can help address this divide, but they need to focus on regional potential. The removal of barriers will increase the ability of women to exploit new opportunities driven by green and digital transitions. The goal of making Europe the world’s leading innovation economy is to go through a more inclusive role for women in productive processes. Thus, a gender-differentiated design of labour market policies at the regional level is necessary to achieve satisfactory outcomes when discussing women’s conditions in the labour market. Benefits also arise from an efficiency viewpoint, especially when compared to gender- and space-neutral policies (Alesina et al., 2011; Iammarino et al., 2019). It is a long way to close gender gaps in the labour market, but the direction is at least clear. Empirical evidence on regional disparities is still emerging, and is mainly constrained by data availability. The development of spatial regression methodologies and greater data availability will permit a deeper geographical analysis of the effect of fiscal policies on gender gaps. Further research should explore the multiple intersections between geography and gender gaps in the labour market.