The Nordic glass ceiling?

Iceland in particular stands out among the Nordic states, since it has a smaller welfare state than its larger Nordic cousins and also ranks among the highest share of female managers in the world. On the other hand, Denmark has the highest tax rate among all the nations in the Organisation for Economic Co-operation and Development and ranks at the bottom in terms of its proportion of female managers.

In the dataset for developed economies, there are three countries with equal or higher rates of female managers than Iceland: New Zealand, the United States, and Latvia. These countries have relatively low tax rates: 26.4 percent in the United States, 29.0 percent in Latvia, and 32.8 percent in New Zealand.

That is from a new Cato study by Nima Sanandaji.


Iceland is also doing well in soccer, maybe that's also because of the lower tax rate?

And Denmark is obviously the happiest country on earth precisely because of its high taxes and low share of pesky women managers.

US with a lower rate failed to qualify to the World Cup for the first time in decades... correlation is not causation I guess

Iceland's population is less than a medium sized U.S. city. They have a incredible alcoholism rate. At this time they are enjoying a tourist boom and thus are flush with cash. Any of these things can distort their economic and social situation. I would assume that no matter what happens in Iceland it has no practical meaning because of these factors.

Are the authors suggesting causation between low rates of tax and female participation in management (and vice versa)? I would point out that 99% of Iceland's inhabitants reside in urban areas, and that Iceland has a severe labor shortage. Could there be a link, causation even, between urbanization or labor shortage and female participation in management?

Wikipedia says Iceland's urban population is 94% (still pretty high), but Denmark, Sweden, and Norway are in the low to mid-80s, as are the US and New Zealand (which is still pretty urban). Latvia is at 67%. I'm not sure urbanization is doing the work here.

I suppose this could be considered interesting.... if Iceland could be considered a country in any meaningful sense of the word.



I remember the debates on monetary policy of Iceland in the 2010ish post-Financial Crisis period and Kevin Drum stated that it is hard to define Iceland as the right approach on anything because its population is smaller than Bakersfield, CA and every single US state. It is a small island.

'if Iceland could be considered a country in any meaningful sense of the word'

Tell that to the losers of the Cod Wars - 'The Cod Wars (Icelandic: Þorskastríðin, "the cod strife," or Landhelgisstríðin, "the wars for the territorial waters") were a series of confrontations between the United Kingdom and Iceland regarding fishing rights in the North Atlantic. Each of the disputes ended with Iceland's victory. The final Cod War concluded in 1976 with a highly favourable agreement for Iceland, as the United Kingdom conceded to a 200-nautical-mile (370-kilometre) Icelandic exclusive fishery zone following threats that Iceland would withdraw from NATO, which would have forfeited NATO's access to most of the GIUK gap, a critical anti-submarine warfare chokepoint during the Cold War. As a result, British fishing communities lost access to rich areas and were devastated, with thousands of jobs lost. Since 1982, a 200-nautical-mile (370-kilometre) exclusive economic zone has been the United Nations standard.'

I suppose you could go back and continue reading after the first paragraph.

Iceland is far to small to derive any meaningful conclusions from. But the study does look at all of Scandinavia.

Of course the entire population of Scandinavia is only 19 million and it's, for the most part, an isolated area.

Fallen sea on this road. Becoming insane, inhale the flame. Frozen angel, caught in-between.

-My stakes aren't for sale.

It is relatively easy to small countries (schols, etc.) to be in the top (and the botton) of many lists - bigger variance.

Yep... Alaska has twice as many people as Iceland. Some neighborhoods in NYC have a population not much smaller than Iceland. And metro areas of the US that most Americans have never even heard of.

I guess that's why the US is up there at number 2, with France and Russia rounding out the top 5.

This is because a large fraction of Icelandic managerial-age males are either playing professional soccer or in Sigur Ros.

Why would you expect the tax rate to correlate with the % of female managers? I guess higher taxes could lead to more people working for the government....

Hi tax rate > more social services > more stay at home Moms.

Give women more options and they chose to work less. Similar to the paper where the more equal/free countries have fewer women in STEM.

High tax rate makes hiring personal services very very expensive- so women will not hire nannies, handymen, maids, etc., but must do it themselves

From the reference:

"High tax rates are another obstacle for Nordic women’s professional advancement because women are more responsive to taxes than men. Women take more responsibility for housework and childcare, on average. When high taxes reduce incentives for paid work by reducing take-home pay, women’s “opportunity cost” is higher because they would otherwise use the time on other productive domestic activities. Women are inclined to reduce their paid work and spend more time on unpaid work as taxes increase.

Alexander Gelber and Joshua Mitchell conducted a detailed analysis of time usage for single men and women in the United States between 1975 and 2004. The authors look at how tax changes have affected the decision to spend time on housework. They find that for single women, when income taxes are reduced, productive domestic activities decline substantially as women presumably increase their paid work. "

So feminists will complain that the patriarchy socially constructs (weak-willed) women to do domestic work and therefore men should be taxed more and women less to produce equality of outcome.

How is a "managerial" position defined here?

I hadn't heard of this Sanandaji before. Any relation to Tino?

siblings IIRC

Men have become so rare in Iceland that they opened a penis museum. Slippery slope my friends!

From Reason:

Is there any polling of Nordic women about whether they believe these policies actually create professional challenges/barriers got them?

Fair question.

On the other hand what you want is revealed preference, not stated preference. I would not call it a barrier, I would call it rational women rationally responding to incentives. High taxes disincentivize Married women’s labor force participation at the middle to high end. That’s why it makes sense it’s managers. Low income families still need dual incomes, and are not taxed as highly.

Matt Y has an article today in Vox about the PC wars which makes this same mistake.

Watch what they do vs listen to what they say. I lean against the latter due to social desirability bias and signaling.


Another way to look at it is they see these policies as somewhat of a barrier, but they also recognize the trade-off and prefer this to the alternative. So they vote to retain these taxes and policies.

Don't Mess With Iceland.

The USA is Number Two?!?! That can't be right.

Iceland won its cod wars. Also, Iceland won its "fiscal wars" against EU nations' attempts to force its 360,000+ citizens to repay Icelandic banks' (unsustainable) foreign debts pursuant to the 2008 world-wide financial catastrophe.

Icelanders' refusal to submit to international, financial fascism far more merits analysis/comment than low-tax-rate/female managerial minutiae.

"Icelanders’ refusal to submit to international, financial fascism"

Fascism? The Icelandic banks stole a bunch of money from the citizens of other countries. When the banks went bankrupt, the government of Iceland made good the losses of Icelandic citizens, but refused to cover those of foreign depositors.

Other countries being angry about this (including a fair amount of UK pensioners who got swindled) is hardly fascism.

It is 2018. Fascism just means "a thing that happened".

By "financial fascism" I meant forcing the nations' peoples to suffer for financial losses incurred by bailing out the nations' big banks' creditors. All except Iceland did it.

Apparently, you do not understand and you do not have the facts.

See Wall Street Journal, April 12, 2011, "Iceland Rejects Europe's Bank Bailout." In 2008, the Icelandic Insurance Fund for Depositors could not pay all foreign liabilities of its banks. The UK and Netherlands governments paid their peoples' losses. Then, effectively sent Iceland a bill for 3.5 billion GBP, plus interest, about 50% of Icelandic GDP. President Grimsson refused to ratify the treaty. Two referenda were held. The first where 94% voted "no." The second restructured deal (lower interest longer repay period) also was strenuously voted down.

By contrast for example, the bureaucrats/elites/mandarins (traitors and knaves) running Eire saddled their citizens with (what?) 200 billion dollars or euros in aditional, unnecessary national debt to pay Irish banks' domestic and foreign creditors. If that is fair and/or democratic . . .

"Apparently, you do not understand and you do not have the facts."

Nothing in that disagrees with what I said: "When the banks went bankrupt, the government of Iceland made good the losses of Icelandic citizens, but refused to cover those of foreign depositors."

"The old banks were put into receivership and liquidation, resulting in losses for their shareholders and foreign creditors. Outside Iceland, more than half a million depositors lost access to their accounts in foreign branches of Icelandic banks. This led to the 2008–2013 Icesave dispute, that ended with a EFTA Court ruling that Iceland was not obliged to repay Dutch and British depositors minimum deposit guarantees.

In an effort to stabilize the situation, the Icelandic government stated that all domestic deposits in Icelandic banks would be guaranteed, "

If they don't like being angry, maybe they shouldn't have chased hot interest rates in deposit accounts.

They swindled themselves.

chopin chart derby

"The Economist suggests Nordic career women “find it harder to afford domestic help than their American equivalents” because public welfare services are paid for by high taxes. When time-sensitive domestic work can’t be outsourced, women do it. Even in the lesser-taxed United States, the combined tax effect significantly reduces incentives for individuals to buy substitutable services (Table 1)."

While high taxes and the public sector monopolies might be factors, I wonder if low skilled immigration isn't a substantial factor also. The US has a significant amount of low skilled immigrants, many of them illegal, who are willing to work off the books and cheaply. I suspect, low wage Hispanic house keepers, significantly boost the amount of women working in certain US states.


Was about to write the same thing.

The biggest beneficiaries of low skill illegal immigration are the wealthy.

"The biggest beneficiaries of low skill illegal immigration are the wealthy."

No, the wealthy can afford $15 per hour American domestic help and would be at some risk of public embarrassment if caught with an illegal nanny. Not that it never happens, but it's not make or break for them. The biggest beneficiaries of illegal house keepers are the upper middle class, where saving $7 to 10 per hour significantly impacts their discretionary income.

Fair enough, I might have different cutoffs for wealthy than you do.

To me, if you can hire help you’re wealthy. “Upper middle class” if they can hire domestics, are wealthy.

The people that are not wealthy vacuum their own floors.

It seems very strange to describe generous parental leave as a "barrier" to women's professional success, because it encourages them to stay home. I thought libertarians were in favor of maximizing people's freedom to choose, not in favor of social policies designed to force people to a pre-ordained outcome.

Yeah the entire papers argumentations seem weird like that. I mean, you can also claim that higher taxes should induce MORE female workers because it makes single-income households less sustainable. In fact, progressive taxing clearly incentives two lower incomes compared to one high income. Taken together with the sketchy evidence - as already mentioned, scandinavian countries aren't very big and they're special in many other ways, too - makes this very unconvincing to me. Also, the (non-)existence of immigrants willing to do cheap housework can easily overshadow a lot of other effects, etc.

Lastly, 'female managers' seems to me very specific. Call me overly distrustful, but if I read something like this, I immediately get the feeling that they just looked through different subgroups until they found one that fit their conclusion. Though at least in this case managers should be the group most impacted by high taxes. However, if this effect should just apply to managers and their ilk I'm honestly not sure how relevant this is for policy decisions even if true.

Cato has a predetermined position and Nima grinds the axe. We all have our priorities. This female would gladly choose Nordic family leave over breaching a stupid glass ceiling. The real travesty of this think tank crap is the framing. The exploitation of working mothers is fine as long as we can become female managers. At least we are given the choice, or are we?

You can guess with 90% certainty what general conclusion a Cato product is going to reach on any given topic before reading it. Not that the analysis should be completely dismissed, but taken with many grains of salt.

I think it is suspicious that the article doesn't even discuss the possibility that the policies, if they are in fact partially driving the outcomes, are conscious tradeoffs that these societies make because they enhance overall welfare.

Iceland has a total population of 350k. It's difficult to extrapolate from.

Comments for this post are closed