What does population density mean for gender equality at work?

Posted March 07, 2021

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SGS Economics and Planning IWD population article Gerard

This International Women’s Day, new research shows that workforce gender segregation is greater in Australia's suburbs and regions, while inner cities have a much more integrated workforce. Creating more successful, compact and diverse population and employment centres throughout Australia's capital and regional cities could alleviate this issue.

Cities are places of great opportunity (and gender equality)

People move to or stay in cities for diverse job choice, courses to study, higher incomes, access to culture, recreation, health services and many other opportunities. Cities are the engine rooms of modern economies, driving growth, productivity and innovation around the world.

Cities also provide more gender equality than other places. The gender gaps in education, employment and income are all smaller in Australia’s cities than in the regions. However, there are challenges with unequal access to opportunity within cities – as SGS’s previous work shows – particularly for women's safety.

New research shows that cities not only have a smaller gap between the amount of work that men and women do, but they also have smaller gaps between the types of work they do as well. This means there is less gender segregation across the workforce.

Segregation is bad for workers, business and the wider economy

Gender segregation exists when the mix of men and women in specific jobs does not match the gender balance of the overall labour force. It includes segregation across occupations and industries, working hours (with more women working part-time than men) and in the job hierarchy (with men occupying the lion’s share of senior positions, also known as vertical segregation).

Such segregation presents three key challenges. Most fundamentally, it limits the range of jobs that are realistically available to both women and men. Secondly, the constraint could limit women’s earning potential and increase the gender wage gap. Thirdly, at the macro level, lesser mobility between typically ‘male’ and ‘female’ jobs hampers labour market efficiency and flexibility – this leads to higher unemployment and lower productivity resulting from inadequate matching workers with jobs.

More population density means less segregation

There are stark differences in the degree of gender segregation between cities and regions. The chart below shows the Index of Dissimilarity (ID), which measures overall segregation, for the capital cities and regions of all Australian states and territories.

The labour markets of cities are less segregated (or more integrated) than the regions’ labour markets. For example, 35 per cent of workers would need to change industries in Greater Sydney to achieve gender equality, while 48 per cent would need to change industries in regional NSW.

And bigger cities are more integrated than smaller cities. For example, 49 per cent of workers would need to change occupations in Greater Melbourne to achieve gender equality, while 53 per cent would need to change occupations in Greater Adelaide.

Gender segregation of employment in industries and occupations – capital cities and regions (2016)

The ID measures the overall level of segregation in the workforce. It indicates the percentage of workers who would need to change jobs to achieve an equal gender balance across all jobs.

SGS Economics and Planning ID chart
Source: Author’s calculations on ABS Census of Population and Housing, 2016

The next chart takes this analysis further by considering segregation in local areas, as defined by the ABS Statistical Area Level 2 (SA2). There are 2310 SA2s in Australia, and they typically correspond to an area the size of one or two suburbs.

The scatterplots below show a clear trend of declining ID for areas of greater population density. An inner city location or inner ring suburb of more than 5,000 persons per sq km has an ID of around 0.25 for industries and 0.20 for occupations. This means that only 20-25 per cent of workers would have to change jobs to achieve gender balance across the labour force.

This percentage rises to 0.31 (industries) and 0.37 (occupations) in middle and outer ring suburbs with population densities around 1,500 persons per sq km, and further to around 0.40 (industries) and 0.45 (occupations) in regional areas. There is much more variability in low population density locations, partly due to the low number of workers.

Gender segregation in industries and occupations, by population density of local SA2 areas (2016)

SGS Economics and Planning paper charts diagram
Source: Author’s calculations on: ABS Census of Population and Housing, 2016; ABS, Population and Age by Sex, Regions of Australia, 2016

So what is driving the difference between the inner city, suburbs and regions?

Two factors drive the differences between gender segregation in the inner city, suburbs, and regions: the local industry/occupation structure (the structure effect) and the gender composition of jobs within the local economy (the mix effect).

The economic structure effect is driven by the types of industries and occupations present in each location. The ID is lowest in the more service-based economies of Sydney, Melbourne and Canberra. A large proportion of workers in these places are employed in service sectors – like public administration, finance, retail, health and education – with a large share of female employment. These sectors require more professionals, community service workers, clerical staff and sales workers.

By contrast, the ID is highest in regional South Australia and Western Australia where traditionally male-dominated industries of agriculture, mining and manufacturing play a larger role in the economy. These sectors require more blue-collar jobs like technicians, trade workers, machinery operators and labourers.

The gender mix effect reflects the balance of men and women within the industries and occupations in each location. For example, women make up a larger share of the well-paid manager and professional roles in cities than in regions. This is true of almost all occupation and industry categories.

Numerous forces contribute to a more balanced mix of men and women in urban jobs. Higher wages in cities make the trade-off between work and care more attractive. Shorter commute times and greater access to services make the work-care balance more manageable in denser locations. Higher housing costs require a higher household income (noting that women are most often the secondary earner). And there may be greater cultural acceptance of gender equality in cities.

The combination of the structure effect and mix effect means that not only is there a higher proportion of ‘female-friendly’ jobs in the bigger cities, but almost all industries and occupations also have a better gender balance in cities than in other places.

A plus for cities, a challenge for regions

These findings reinforce and build on what we know about the value of cities and agglomeration. Bigger labour markets are better at matching jobs and workers, and this new evidence shows that bringing more women into work in a more diverse range of industries and occupations is part of that story.

While this is great news for inner city areas, it highlights a challenge for economic development and gender equality in the suburbs and regions.

Efforts to increase access to jobs in these areas will improve opportunities for workers (especially women) and employers. Investments in fasterrail and the post-COVID push to working from home may help. However, local employment opportunities and services will be needed as well, particularly as women with children are typically on a tighter spatial leash in work and care than men.

Policy makers looking at population settlement strategies, economic mega regions and regional economic development will benefit from incorporating a gender lens to inform their approach. Attracting a diverse mix of high-value firms to highly accessible locations is not only beneficial for economic growth but also for workplace gender equality. A broader range of work opportunities will make regional locations more attractive places to live for workers with young families, who increasingly want to have both parents sharing work and care responsibilities.

The case for workplace flexibility, affordable and quality child care and equal parental leave is well documented. Greater uptake of family-friendly workplace practices by businesses in these locations will factor into creating more gender-balanced workplaces in all locations.

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