The statement that women are often financially dependent on their partner was absolutely true in the past due to lack of equal employment opportunities, limited access to education and various social norms. A drastic change has occurred in most parts of the world, where women are actively contributing to their households or managing their finances independently. The trend is getting reinforced as more women opt for education in the pursuit of gaining financial autonomy. However, the change is not complete worldwide. In fact, even in the Netherlands women’s financial independence has not yet been achieved. A significant portion of Dutch women, almost half, are indeed financially dependent on a partner or on the government, compared to 23 percent of men. Despite advancements in gender equality, women are still lagging when it comes to sustainable financial independence.
Sustainable financial independence
What does sustainable financial independence mean? What are the roadblocks to attain sustainable financial independence for women? This term simply refers to an individual’s ability to support their desired lifestyle and cover their expenses without the need for continuous external support or assistance. Maintaining economic well-being over the long term with enough financial resources, strategies and skills is one of the biggest parameters to measure the financial independence of an individual. Other parameters could be good working conditions and a balance between work and personal life.
Challenges in attaining sustainable financial independence for women
- Gender pay gap
According to government data, there is still a 13 percent pay gap based on gender. This discrepancy is not just limited to a few industries or regions. Bias is creating an explicit gap and affecting women’s options to achieve financial independence.
- Responsibilities as a caregiver
Women often are expected and take on more caregiving roles than men, which in turn leads to limited working hours, interrupted careers and limited education. These expectations act as roadblocks, affecting incomes and career progressions. In the Netherlands, there is persistent disparity as women still spend more time than men on unpaid care tasks.
- Unequal opportunities
Women often work or get opportunities in sectors such as childcare and cleaning, which have lower prestige and therefore do not offer high wages. They also face barriers to promotion, and lack access to certain professions and career advancements due to bias and systematic barriers.
- Difficulty in work-life balance
With so many responsibilities on their shoulders, women encounter challenges in attaining a sustainable work-life balance. It is common for women to work fewer hours after their first child, whereas that’s generally not the case for men. Statistically, about 39 percent of women work fewer hours after the first child is born; approximately 5 percent quit work completely. All these challenges impact career growth and opportunities for financial advancements.
- Limited access to finance and financial education
Due to various discriminatory financial practices, lack of collateral, legal barriers and societal expectations, women often face limited access to finance. These disparities make it harder for women to access loans or credits. Limited understanding of financial concepts, risk aversion and difficulty in navigating financial services furthermore makes it difficult for women to make informed financial decisions.
- Divorce – a big hindrance
A divorce can badly affect a woman financially. Unequal asset division, loss of income and career interruptions are some of the reasons that can have significant financial implications for women. It has been observed that five years after a divorce, women have 21 percent less purchasing power than men.
A multifaceted approach is required to address these complicated challenges. Reforms and positive changes such as educational initiatives, workplace reforms and policy changes need not only to be introduced but their successful implementation should be ensured. Providing equal opportunities in work and education, implementing fair pay practices, support in caregiving tasks and promoting financial education contribute significantly to empowering women. This would not only benefit the individuals, but also the economy as a whole.
Written by Parul Sachdeva