The power of parity: How advancing women’s equality can add $12 trillion to global growth

McKinsey Global Institute
2015

Summary

If women participated in the economy identically to men what would global GDP look like? This report explores the economic potential available if the global gender gap were to be closed, and highlights the role of new regional and global coalitions between policy-makers, non-governmental actors, and private-sector leaders to drive this change.

The report maps 15 gender equality indicators across 95 countries and within four categories: equality in work; essential services and enablers of economic opportunity; legal protection and political voice; and physical security and autonomy. It identifies 10 “impact zones” (issue-region combinations), and also includes a Gender Parity Score, or GPS), which establishes a clear link between gender equality in society and in work.

Findings

  • The report finds that 40 of the 95 countries examined have high or extremely high levels of gender inequality on at least half of the gender equality indicators.
  • A “full-potential” scenario in which women participate in the economy identically to men would add up to $28 trillion (26%) to annual global GDP in 2025 compared with a business-as-usual scenario.
  • A “best-in-region” scenario, in which all countries match the rate of improvement of the best-performing country in their region, would add as much as $12 trillion to annual global GDP in 2025 (twice the likely growth in global GDP contributed by female workers in a business-as-usual scenario).
  • In 46 of the 95 countries analysed, the ‘best-in-region’ outcome could increase annual global GDP in 2025 by more than 10 percent over the business-as-usual case, with the highest relative boost in India and Latin America. ƒ
  • The GPS highlights the strong link between gender equality in society, attitudes and beliefs about the role of women, and gender equality in work. There are virtually no countries with high gender equality in society but low gender equality in work.
  • Regional GPS is lowest in South Asia (excluding India) at 0.44 and highest in North America and Oceania at 0.74.
  • The global impact zones: blocked economic potential; time spent in unpaid care work; fewer legal rights; political under-representation; and violence against women.
  • Regional impact zones: low labor-force participation in quality jobs; low maternal and reproductive health; unequal education levels; financial and digital exclusion; and girl-child vulnerability, concentrated in certain regions of the world. ƒ

Recommendations

A “best-in-region” scenario would be more realistic given the challenging task a “full-potential” scenario would be within a 10-year time frame. Prioritising effective action on the 10 “impact zones” (issue-region combinations) would move more than 75% of women affected by gender inequality globally closer to parity. The report offers  75 potential interventions to bridge the gender gap that could be evaluated and tailored to suit the social and economic context of each impact zone and country. These fall into six types and include:

  • Financial incentives and support: cash transfers targeting girls; removal of tax disincentives to both partners working; universal funded or subsidised child care.
  • Technology and infrastructure: physical infrastructure such as sanitation facilities for girls in schools; companies providing safe transport for women to work; and mobile packages targeting women.
  • Creation of economic opportunity: lowering barriers for women to move into positions of leaderships and responsibility; companies setting explicit goals for diversity and establishing criteria for recruiting and reviews.
  • Capability building: high-quality education including in STEM subject; vocational alongside life skills training (maternal and reproductive health; financial and digital literacy).
  • Advocacy and shaping attitudes: engaging communities in dialogue; promoting peer networks; national awareness efforts to combat social norms.
  • Laws, policies, and regulations: legislation that protects the rights of women to combat issues such as VAWG and to implement and enforce an anti-discriminatory labour market; the design and implementation of gender-friendly laws needs to happen in partnership with other stakeholders in order to drive change.

Source

McKinsey Global Institute.(2015). How advancing women’s equality can add $12 trillion to global growth. Shanghai: McKinsey Global Institute.