Women and employment in Taiwan

Taiwanese women’s employment from a comparative perspective

Like many countries in the world, Taiwan has undergone a steady increase in women’s participation in the labor force during the past several decades. Whereas 38 percent of women over 15 were in the labor force in early 1978, about 51 percent of them are in 2015.[1] This 13 percent increase, stretched over nearly four decades, might not seem drastic, but it has nevertheless occurred amid concurrent social changes that have reduced men’s labor force participation from 78 percent to 67 percent. The decline in men’s labor force participation rate largely resulted from Taiwan’s expansion of higher education beginning in the mid-1990s, and overall aging of the population leading to more retired workers. As men spent more years of their early adulthood in educational institutions, and as the proportion of older, retired men in the population grew, the percentage of men active in the labor market became smaller. While these same social changes also affected Taiwanese women, the increase of married women joining the labor force has offset the counteracting social forces, resulting in a convergence in labor force participation rates between men and women.

Despite the steady increase in women’s employment, Taiwan’s female labor force participation rate is not unusually high among East Asian countries. At 51 percent today, Taiwan’s rate is roughly comparable with Japan (49 percent) and South Korea (50 percent in 2013), while lower than the rates of Singapore (59 percent) and China (64 percent) in the same year.

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Both Singapore and China have a much smaller proportion of the population enrolled in higher education. This lower enrollment allows more single young women to be available for employment, thus contributing to greater female labor force participation rates. China’s high female employment rate also has to do with the legacy of full employment during the socialist era, which provides ideological support for women to hold paid jobs.

Although Taiwan’s female employment rate is comparable to those in Japan and South Korea, the comparison of overall rates masks critical differences in patterns of female employment among the three countries. To illustrate, Figure 1 shows women’s labor market participation rates by age group for Taiwan, Japan, and South Korea in 2014. For a contrast, the figure also includes the rates for Taiwanese men. In both Japan and Korea, women ages 30-39 were less likely to be in the labor force than those who were 25-29 years of age and those who were in their 40s. Because ages 30-39 are roughly the period when women give births and raise young children, and considering that the average age of marriage is around 30 for all three societies, the “M-shaped” labor force participation curve in Japan and Korea are thought to indicate that many women participate in the labor market after leaving school but before their first birth, withdraw from the labor force once they have young children, and then return to paid work after their children enter elementary or middle school.

In contrast to Japan and Korea, Figure 1 shows an inverse-V shaped curve for Taiwanese women. Although women in their 30s were also less likely to participate in the workplace than those 25-29 years old, the rate of female employment between ages 25-40 in Taiwan was markedly higher than those in Japan or Korea. Older women, at the same time, had lower levels of labor force participation in Taiwan than in Japan and Korea. This pattern gives the impression that Taiwanese women rarely reenter the labor market after early child rearing and may even withdraw from the labor market
after
their children enter school. Such an interpretation would be mistaken, however, because it overlooks the fact that the employment behavior of women in their 20s or 30s today does not represent the behavior when women in their 50s today were in their 20s or 30s several decades ago.

When looking at each cohort’s employment rates at different ages, research shows that each generation of Taiwanese women have experienced a decline in employment around their 30s followed by a further increase in their 40s (i.e., the M-shaped curve currently in South Korea and Japan).

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Most cohorts of Taiwanese women had similar levels of employment during their 40s and 50s as in their 20s. Nevertheless, married women’s returns to the labor market become invisible in Figure 1 because each generation of Taiwanese women participates in the labor market at a higher level than the previous one during early child rearing years (late 20s and 30s). This means each new generation’s employment rates in those years are higher than of women in their 40s and 50s, even though the latter’s participation level is the same as when the latter group was in their 20s.  Thus, what distinguishes Taiwan’s female employment patterns from Japan and Korea is not a shortage of middle-age women returning to the labor force returns. Rather, the more drastic increases in women’s likelihood to continue their jobs upon marriage or childbearing make Taiwan stand out.

Explaining changes in married women’s employment

The question of why Taiwan diverged from Japan and Korea in women’s employment trajectories is the focus of a few scholarly works on East Asia. Taiwan’s comparably high labor demand, a result of its heavy reliance on exports from labor-intensive industries in the early period of economic development, is argued to contribute to the long-term increase in women’s continuous employment upon childbearing.

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Beginning in the 1960s and 1970s, the rapid industrial expansion, and therefore, ever-increasing labor demand made it necessary for employers to seek new sources of labor supply. As the supply of single, young women gradually shrank due to rises in girls’ educational attainment and became insufficient to meet the labor demand, married women and mothers became increasingly needed by employers facing labor shortages. Even for positions requiring more skills, employers often found married women and mothers appealing options, as Taiwan’s delayed expansion of higher education, along with the relatively high female representation among those attending universities, made educated male labor generally insufficient.

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Not all married women were equally appealing sources of labor supply for Taiwanese employers. Despite Taiwan’s relatively late expansion of higher education, women’s educational attainment, on the whole, has increased considerably during the country’s rapid development. To illustrate, in 2014, 89 percent and 48 percent of women aged 30-34 have completed high school and four-year university, respectively, whereas the rates were 48 percent and 9 percent for those aged 55-59, who went to school about a generation ago. Because younger married women and mothers were generally better educated, and because job turnover was especially costly for small enterprises, which made up the majority of Taiwanese businesses, it was more beneficial for employers to keep women in the workplace after marriage and childbearing than lure those with older children back to the labor market.

To retain women upon childbearing, however, Taiwanese employers had to accommodate their needs. Thus, even before the government implemented laws and policies to facilitate work-family compatibility for married women and mothers, informal negotiations to accommodate their family obligations became more common.

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The fact that employer-employee relations tended to be personal and informal in many small Taiwanese firms also helped facilitate such negotiations. In addition, the large proportion of small enterprises, along with the concentration on labor-intensive industries, compressed Taiwan’s wage structure, and created less advancement opportunities and long-term job security for workers. Under this system, Taiwanese employers have been unable to demand much overtime work or other personal sacrifices from their employees, which has driven mothers of young children to remain in the workplace as well.

Because combining work and family obligations has been relatively feasible, women’s earnings potential has been the key factor affecting their employment decisions in Taiwan. The better the pay, the more likely women are to remain in the workplace during the early child-rearing years. As Taiwanese women’s educational attainment has increased with time, the female population as a whole has gained incentives to continue their jobs after childbirth. The increase in married women’s employment, however, ultimately led to a disproportionately large percentage of dual-earner families among the well-educated. That is to say, upper and upper-middle class families increasingly had two earners, whereas lower and lower-middle class families were more likely to have a single earner.

This trend resulted in a rise in household inequality, despite the limited change in individual wage inequality.

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Also as a result, the average household consumption increased to a level closer to the spending habits of dual-earner rather than single-earner families,

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making the latter increasingly deprived. Thus, withdrawing from the labor force after having children became less an option for recent cohorts of Taiwanese women. Additionally, public opinion in Taiwan has further shifted as mothers’ employment became a necessity. By the mid-1990s, most people were no longer concerned about the potential harm mothers’ employment may have on children. Today, well-educated women with considerable income potential may even be considered selfish if they do not work to contribute to family income. In this sense, the cultural and economic consequences of the initial changes in Taiwanese women’s employment have facilitated further increases in the labor force participation for mothers of young children.

Changes in gender inequality: Progress and remaining challenges

It is well documented that work interruptions during early child rearing years are exceedingly detrimental to women’s long-term career prospects and earnings.[9] Therefore, the increasing tendency of Taiwanese women to continue their jobs upon marriage and childbearing is an important driving force for closing the gender gap in the workplace. Figure 2 shows long-term improvement of gender inequality in pay in Taiwan. From 1980 to 1990, women’s hourly wages were less than 70 percent of men’s wages. Nevertheless, female hourly wages have been increasing since the early 1990s, reaching 85 percent of male wages in 2014, partly because staying in the labor force after child rearing has become especially common among Taiwanese women with white-collar occupations. To put it in perspective, Taiwan’s gender pay gap was 17.5 based on the OECD’s definition.[10] This gap was similar to the United States (17.9) and United Kingdom (17.5), while much smaller than the gaps in Japan (26.6) and Korea (36.6).[11] Although the gender pay gap continues to exist, the long-term change in women’s employment pattern has clearly helped reduce gender inequality in pay.

Figure 2 also presents changes in average hourly wages for men and women over time. The patterns for the two groups are similar, indicating that employers do not discriminate men or women more when experiencing economic fluctuations. Furthermore, since 2000, both men and women have similarly suffered from slow wage growth, which has ignited public concern over wage stagnation in Taiwan. Many economists see this stagnation as a result of Taiwan’s heavy reliance on contract manufacturing, and exporting electronics and other goods for slim profit margins. As far as gender inequality is concerned, however, it is clear that the wage stagnation problem is one for all workers; no specific gender group appears to bear more of the negative consequences.

Another important way of evaluating gender inequality in the workplace is to examine gender differences in unemployment rates. Figure 3 shows these rates over time. Interestingly, before 1997, when there were spikes in unemployment, women’s unemployment levels tended to be higher than men’s. Conversely, since the late 1990s, men’s unemployment has generally been higher, and the differences were especially great during the recession of the early 2000s and in the aftermath of the global financial crisis of 2008. This pattern is similar to the one in the United States through which women’s employment has suffered more than men’s from economic recessions, but the gender gap has reversed since 2000. For the United States, the fact that women are less likely to be in manufacturing occupations is often thought to explain their faring better during recent recessions, which hit manufacturing industries especially hard.

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The story for Taiwan appears to be similar. As Taiwanese women’s lifetime employment patterns become more like men’s, employers become less suspicious of their commitment to work, hence less likely to lay them off first when businesses are under distress. As Taiwanese women increasingly occupy non-manufacturing positions (partly because women with white-collar jobs are increasingly likely to continue their jobs after childbearing), their employment becomes less sensitive to economic fluctuations than men’s employment.

Although it is not directly related to gender inequality in the workplace, the overall increases in women’s economic status and visibility are likely to have contributed to women’s political power. The percentage of women in global parliaments has risen from 11.1 percent in 1995 to 35.5 percent in 2015, with steady increases each year. The figure of 35.5 percent is remarkable, as only a small proportion of countries in the world have more than 30 percent of women in parliament (the United States, for example, had 19 percent in 2014). It is nevertheless important to note that Taiwan’s electoral system used multi-member districts before 2008 and still partially incorporates the proportional representation system. Moreover, there has been a strong political cleavage concerning relations with China in society. Both conditions encourage voters to focus on party affiliations more than individual candidates, thereby helping women gain seats in legislatures. The constitution’s mandate for reserving a certain proportion of seats for women (10 percent before 1999 and 25 percent since) in the Legislative Yuan is also likely to lead to Taiwanese women’s relatively active participation in formal politics.

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Despite the growing female political representation in Taiwan, the share of women managers in the private sector is still low. According to government statistics, 25 percent of managers and administrators were female in 2014.

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But, because this percentage included female legislators and administrators in the public sector, in which women’s share in managerial positions was more than one third, the female representation among private-sector managers is actually lower than 25 percent. Although 25 percent was higher than the 11 percent in Japan and Korea, it was much lower than the female share in managerial and administrative occupations in the United States (43 percent) or Singapore (34 percent).

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So clearly, there is much room for improvement. Interestingly, the increase in Taiwanese women’s share in managerial positions has accelerated during the past five years. From 2009 to 2014, this share rose by 6 percent, whereas it took 14 years for it to increase the same amount before 2009. Whether this acceleration will continue remains to be seen.

In addition to women’s relatively small share among managers, changes in gender equality in the domestic sphere have also been slow in Taiwan. The division of labor inside the home is still gendered, with women bearing most housework and childcare responsibilities. Among newborns, as late as 2010, the male to female ratio was still near 110:100, higher than the natural birth ratio (105-107:100). This ratio suggests evidence of sex-selective abortions and continued prevalence of a son preference among current Taiwanese families. Although this son preference no longer leads to fewer years of schooling for girls,

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parents’ gender biases are likely to continue to affect their support for sons and daughters to enter customarily male or female fields of study, which in turn perpetuates gender inequality at work.

Government policies: What has been done and what needs to be done

In Taiwan, policies that promote gender equality in the workplace or family-work compatibility have generally been responses to changes in women’s labor force participation, rather than drivers for such changes. For example, it was not until 1990, after married women’s employment had already increased considerably, that the Taiwanese government removed the tax penalty for dual-earner families. The Act of Gender Equity Employment (AGEE) was first implemented in 2002, long after mothers with young children became widespread among workers employed in white-collar occupations. Moreover, government policies promoting gender equality were rarely effective. Specifically, the AGEE, despite including guidelines for employers to provide female employees schedule flexibility, childcare and nursing facilities, and childcare leave, explicitly makes most rules apply to companies or organizations with 30 or more employees. In 2011, about 49 percent of Taiwanese workers were employed by firms with fewer than 30 employees. Even for employers of larger firms, there is no penalty for those that do not adopt the family-responsive measures prescribed by the law. For regulations in the AGEE that do have enforceable penalties, such as overt gender discrimination in wages, the penalties are modest, and individuals suffering from such discrimination may not receive beneficial compensation by filing lawsuits against their employers.[17]

In recent years, partly as a reaction to a rapid decline in fertility, the Taiwan government has made further attempts to facilitate work-family compatibility, such as providing partial pay for up to six months when women take childcare leave (which can add up to 2 years). Various reports, however, indicate that few women with young children have utilized childcare leave or other AGEE measures meant to improve work-family compatibility. More importantly, while six-month subsidies for childcare leave may allow women, who otherwise would not take any break from their jobs, to have some extra time off after maternity leave, they are unlikely to help those least likely to continue their jobs after childbirth; that is, those with low wages, for whom the cost of childcare is too expensive for their income. For the latter, the childcare leave, if available, simply enables them to postpone their labor force exit for six months, or even two years, but their families would still suffer from the loss of income during and after the leave. To help women with less income potential to stay in the labor market, and to help reduce household income inequality, it would be more effective for the government to offer high-quality affordable childcare centers and preschools. Many local governments have already been increasing public childcare centers in recent years, but the number of spots is still limited. The closer the Taiwan government gets to offer universal childcare, the more likely the gap between different classes of women and their continued employment will narrow.    

[1] Directorate-General of Budget, Accounting and Statistics (DGBAS), “Yearbook of Manpower Survey Statistics: Taiwan Area,” Executive Yuan, Taipei: (various years).

[2] World Bank, “World Development Indicators Online database,” (various years), accessed July 10, 2015.

[3] See Figure 6.1 in Yu, Wei-hsin. Gendered Trajectories: Women, Work, and Social Change in Japan and Taiwan. (Stanford, CA: Stanford University Press, 2009).

[4] Brinton, Mary C., Yean-Ju Lee, and William L. Parish. “Married Women’s Employment in Rapidly Industrializing Societies: Examples from East Asia.” American Journal of Sociology 100 (1995):1099-1130; Yu, Wei-hsin. 2009.

[5] Taiwan’s relative gender equality in university attainment was largely an unintended consequence of its educational policies, including the reliance on a single college entrance exam to determine admissions and sex segregation among elite public high schools. The existence of single-sex elite high schools guaranteed similar numbers of female students as males in top high schools. At the same time, the college entrance exam system decreased the likelihood that women would select themselves into less prestigious colleges or non-university tracks upon graduating from high school.          

[6] Yu, Wei-hsin. 2009.

[7] Bourguignon, Francois, Martin Fournier, and Marc Gurgand. “Distribution, Development, and Education in Taiwan, China, 1979-94.” in The Microeconomics of Income Distribution Dynamics: in East Asia and Latin America, edited by F. Bourguignon, F. H. G. Ferreira, and N. Lustig (Washington, DC and New York: World Bank and Oxford University Press, 2004): pp. 313-356

[8] Yu, Wei-hsin. 2009.  

[9] Wenk, D., & Rosenfeld, R. A., “Women’s Employment Exit and Reentry: Job-Leaving Reasons and Their Consequences,” Research in Social Stratification and Mobility, 11  (1992):127-150; Aisenbrey, Silke, Marie Evertsson, and Daniela Grunow, “Is There a Career Penalty for Mothers’ Time Out? A Comparison of Germany, Sweden and the United States,” Social Forces,vol. 88, no. 2 (2009): pp. 573-605.

[10] The OECD definition of the gender pay gap is the difference between male and female median wages divided by the male median wages, among full-time employees. The data in Taiwan are based on average wages, not median wages.

[11] “Online OECD Employment database,” Organisation for Economic Co-operation and Development, (http://www.oecd.org/employment/onlineoecdemploymentdatabase.htm)

[12] Şahin, Ayşegűl, Joseph Song, and Bart Hobijn, “The Unemployment Gender Gap During the Current Recession,” Current Issues in Economics and Finance vol. 16, no. 2 (2010)

[13] In contrast, Japan does not implement a gender quota in the election system, despite that the Abe government has repeatedly set the goal of having 30 percent of female representative in executive positions by 2020. Korea began to incorporate gender quotas in recent years, but the quotas are limited to the percentage of women to be nominated by political parties, not the actual seats in parliaments or local government councils. Both Japan and Korea have much lower female representation in formal politics.        

[14] DGBAS. various years.

[15] Based on DGBAS, “National Statistics Report #101,” (2014), last accessed July 15, 2015, (http://www.dgbas.gov.tw/public/Attachment/469171555WBU1BWDH.pdf). Figures for the United States, Korea, Japan, and Singapore are based on 2013 data.

[16] Yu, Wei-hsin and Kuo-hsien Su. “Gender, Sibship Structure, and Educational Inequality in Taiwan: Son Preference Revisited,” Journal of Marriage and Family vol. 68 (2006): pp.1057-1068.

[17] In lawsuits over workplace gender discrimination, the company was often asked to pay back what it owed to the plaintiff, but it rarely needed to pay punitive damages to the plaintiff.