The most recent data from the European Union show that women earn on average 18% less than men; a gap that has remained remarkably resilient to various efforts to try and close it. The gender pay gap measures the difference in gross hourly wages of women and men, and this 18% does not even take into account the different number of hours women and men work. What this means is that women need to earn around a fifth more each hour to catch up with the hourly pay of their male counterparts. Furthermore, the average figure for the 27 Member States disguises national variations from a low of 4.9% in Italy to 30.3% in Estonia.

The European Union has been the source of much of the equality legislation that exists in Member States today – originating from a single article in the 1957 Treaty subsequently mobilised in various Directives since the mid-1970s. These major legislative advances outlawed paying women and men different wages for the same jobs or work of equal values but, after an initial improvement in the gender pay gap, figures have shown little progress in recent decades.

The EU campaign is actually one of the actions that European institutions have been undertaking for a number of years stemming from the Commission's Roadmap for equality between women and men. The new headline figure of 18% is in fact one of the key outcomes of behind-the-scenes work to improve the quality of the statistics: developing a harmonised and comparable source of data on differences in women’s and men’s pay has been no small task but is a key step to addressing the problem – policy makers can not address these inequalities or monitor progress without the data and adequate measurement.

These newly harmonised data bring to light country differences that were previously disguised among a maze of multiple data sources and comparability problems. One factor that immediately comes to light is the prevalence of the gap in all countries – even those ‘famous’ for their equal opportunities and women-friendly policies. What is perhaps surprising is the distribution of countries. We find countries like Italy, Slovenia, Belgium Romania and Malta with a gap of less than 10% and countries like Finland, Slovakia, UK, Cyprus, Lithuania, Greece, Germany, Netherlands, Austria Czech and Estonia with a gap of more than 20%.

This surprising distribution of countries can be explained by a number of factors which also illustrate the pressures reinforcing the gender pay gap. The segregation of men and women into different sectors, with high and low wages respectively, is perhaps the single most important factor explaining the gap in pay. For example: in countries like Italy and Malta, the low proportion of women in work can be seen as a selection of a group of women with strong levels of education and relatively good jobs compared to the distribution of all working men; as such their pay performs relatively well.

In countries like Estonia there is a rather high proportion of women in work, including many more low paid workers, and there is a very high level of segregation of women and men into different employment areas. Elsewhere there are a number of countries – the UK and Netherlands for example – where a high level of part-time work increases the gap since these jobs are concentrated in low-paying areas and often disadvantaged went it comes to promotion and training.

The pay gap remains because the factors that create the gap are firmly established in the operation of European labour markets. The horizontal segregation of women and men into different types of jobs and their vertical segregation in different parts of the hierarchy are based on stereotypes and educational choices that take a lot of work to shift. Women’s greater share of responsibility for caring for children also disadvantages their access to good jobs, pay and promotion. Similarly working part-time acts to reinforce lower pay, both while caring for children and subsequently when children have grown up.

To some extent women are swimming upstream in trying to close the gender pay gap. While they have made big steps forward in the continuity of their employment patterns – fewer and shorter pauses for children – and educational attainment – accounting for around three fifths of tertiary graduates – there are a number of factors working against them. The decentralisation of pay systems and promotion of individualised pay reflects a move away from more collectively negotiated arrangements where women benefited from pay agreements that reduced wages differences between firms. Individualisation has also been associated with reduced transparency – bonuses and performance pay – and enforced secrecy among some employees over pay.

At the Grenoble Ecole de Management we have been working to identify successful policies from across EU Member States to address the gender pay gap. Indeed many elements of the current European Commission’s new campaign adopt best practice from across the EU. The sharing of good policy practice has been an important component of EU cooperation around employment policy and it is possible to benefit from the rich diversity among the 27 Members.

The European Commission is obliged to work with social partners – employers and trade unions – and this can provide a useful mechanism for addressing gender gaps, since these are key stakeholders in pay determination in many EU countries. Publicity for the issue is also a key since awareness and support of European citizens is both vital and an important monitoring tool. Indeed recent opinion polling confirms that these inequalities are important priorities for Europeans. However, effective monitoring can only be achieved by transparency – whether that is between Member States with the new European data or within companies by encouraging organisations to publish their firm-specific gender gap and justify it.

However, the European Union needs to be bolder in the setting of targets for Member States. As part of the European Employment Strategy, all Member States are working towards a target to raise the level of female employment and there has been clear evidence of Governments focusing on policies to meet the challenge.

Already in Finland and Sweden we see targets for closing gender pay gaps and these types of pay gap objectives could be encouraged in other Member States. However, there are dangers of setting an absolute target, given the variety of gaps across countries and the risk of a single pay gap figure being seen as an ‘acceptable’ gap. A solution is to have a relative target, for example halving current gaps in ten years.

The EU has ambitious plans as part of its EU2020 Agenda – the EU Strategy for the next ten years – so an ambitious gender pay gap target would fit with these aspirations.

Significant challenges remain for making progress against the gender pay gap. Indeed it has not remained so resilient to legislative pressure for nothing. Challenging the segregated nature of labour markets is a major task since these divisions are the result of gendered choices women and men make from school-age onwards.

In countries with rather low pay gaps and low female employment rates, the challenge will be to maintain low gender pay gaps while raising the level of female employment. Additionally, the hangover of the economic crisis presents a challenge since policy makers and social partners are preoccupied with concerns around rising unemployment while public sector jobs are under threat – where pay gaps are generally lower. However, it is important to point out that there is an economic case for dealing with these inequalities.

The gender pay gap reflects the underutilisation of a key economic resource in European economies. Furthermore unequal pay impacts upon households, and not just women, inequalities and the gender pay gap affect families and households, not least when male job loss creates female breadwinners by default. In this sense gender equality is not a luxury to be afforded when times are good but both a key principle of the European project and a rational economic goal.