The case for gender equity

WEF studies prove that GDP per capita actually correlates with Global Gender Gap

The Global Gender Gap Report 2014 | 39

Part 1: The Global Gender Gap and its Implications

Slovak Republic. In six countries there were gains of more than 10%: Bangladesh, Belgium, Denmark, Finland, Ireland and Switzerland. Figure B1 displays these changes visually for seven selected economies: Switzerland, Ireland, Mexico, Korea, Rep., United Kingdom, Japan and Slovak Republic.

THE CASE FOR GENDER EQUALITYThe most important determinant of a country’s competitiveness is its human talent—the skills and productivity of its workforce. Similarly, an organization’s performance is determined by the human capital that it possesses and its ability to use this resource efficiently. Ensuring the healthy development and appropriate use of half of the world’s available talent pool thus has a vast bearing on how competitive a country may become or how efficient a company may be. There is clearly also a values-based case for gender equality: women are one half of the world’s population and deserve equal access to health, education, economic participation and earning potential and political decision-making power. Ultimately, gender equality is fundamental to whether and how societies thrive.

Figure 25 demonstrates the relationship between GDP per capita and the Global Gender Gap Index 2014. Figure C3 in Appendix C shows the links between the Human Development Index 2013 and Global Gender Gap Index 2014 and Figure C4 shows the links between

the Global Competitiveness Index 2014-2015 and Global Gender Gap Index 2014. The graphs confirm a correlation between gender equality and GDP per capita, the level of competitiveness and human development. The correlation is evident despite the fact that the Global Gender Gap Index (unlike other gender indexes) explicitly eliminates any direct impact of the absolute levels of any of the variables used in the Index (e.g. life expectancy, Educational Attainment, labour force participation), as these may be impacted by the relative wealth of a country. While correlation does not prove causality, it is consistent with the theory and mounting evidence that empowering women means a more efficient use of a nation’s human capital endowment and that reducing gender inequality enhances productivity and economic growth.

The Global Gender Gap Index takes into account four critical areas when measuring the gaps between women and men’s access to resources and opportunities. For each of these areas, there are economic or societal gains from increased gender parity. This section summarizes some of the key research findings on the broader economic and societal case for gender equality. Figures 26 through 29 display the relationship between GDP per capita and the four subindexes.

The multiplier effect of education on several aspects of development as well as its impact on economic growth is now commonly accepted: education reduces high fertility rates, lowers infant and child mortality rates,

GDP

per c

apita

(con

stan

t 200

5 in

tern

atio

nal $

)

Figure 25: GDP per capita vs Gobal Gender Gap Index 2014

Source: Global Gender Gap Index 2014 and the World Bank’s World Development Indicators (WDI) online database, accessed July 2014.Note: The Global Gender Gap Index axis has been truncated to enhance readability.

0.5 0.6 0.7 0.8 0.9

0

30,000

60,000

90,000

120,000

150,000

Qatar

Norway

Iceland

Philippines Nicaragua

BurundiLesotho

Russian Federation

Brazil

Switzerland

Kuwait Luxembourg

China

India

Saudi Arabia

Pakistan

Chad

SwedenIreland

New Zealand

Yemen

Finland

Singapore

Global Gender Gap Index 2014 score (0.00-1.00 scale)

GDP

per c

apita

, PPP

(con

stan

t 201

1 in

tern

atio

nal $

)

/26common myths About Working Women

Relationship between GDP per capita and the Global Gender Gap Index 2013 score

Source: Global Gender Gap Index 2013 and the World Bank’s World Development Indicators (WDI) online database, accessed May 2013.Note: The Global Gender Gap Index has been truncated to enhance readability

GD

P pe

r cap

ita (c

onst

ant 2

005

inte

rnat

iona

l $)

Qatar

Norway

Iceland

NicaraguaPhilippines

Lesotho

Russian Federation

Brazil

Switzerland

China

India

Saudi Arabia

Pakistan

Sweden

Yemen

Finland

0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90

0

20,000

40,000

60,000

80,000

Global Gender Gap Index 2013 score (0.00–1.00 scale)

Booz & CompanySeptember 2012 1

649.3

98.8

64.2

Close to 1 Billion women, the “Third Billion,” will enter the global economy during the coming decade

Overview of the Third Billion

Source: ILO data; Booz & Company analysis

45.06.90.9

…

Women that have received neither sufficient education nor social/political support

Women that have not received sufficient education

Women that have not received sufficient social/political support

Neither Prepared nor Enabled

Not Enabled

Not Prepared

DevelopedEconomies

EmergingEconomies

…

Women outside the Economic System(2020, in millions)

865 million women will enter the economic mainstream in the coming decade, constituting the Third Billion—in reference to the

billion-plus respective populations of China and India

Booz & Company

Our estimates confirm the significant untapped economic growth potential that the Third Billion represents

September 2012

Potential Economic Impact of Women’s Economic Empowerment

GDP Impact of Matching Female to Male Employment Rates(% of GDP)

U.S.

5%

U.K.

5%

Japan

9%

South Africa

10%

Argentina

12%

IndiaEgypt

12%

27%

34%

UAE

Source: Booz & Company analysis

Angel GurriaSecretary General, OECD

Caroline AnsteyMD, World Bank

“Gender equality is good in and of itself,

and it is smart economics.”

“Women are the most underutilized

economic asset in the world’s economy.”

Emerging Economies Developed Economies

Matching female to male employment rates would

significantly increase GDP in emerging economies—where opportunities for women today are limited

2

Gender Equality an ‘Economic No-Brainer,’ Says IMF Chief

Key messages$2.1 trillion in additional GDP in 2025 if all US states match the states with the fastest progress toward gender parity in work over the past decade—a best-in-class scenario. This is 10 percent higher GDP, or a 3.1 percent growth rate through 2025, instead of the 2.3 percent growth rate in the business-as-usual scenario.

40/30/30. About 40 percent of the $2.1 trillion GDP opportunity comes from a higher female labor-force participation rate, 30 percent from narrowing the gap between men and women who work part time and full time, and 30 percent from changing the mix of sectors in which women work to boost their presence in more productive ones.

An additional 6.4 million jobs would be required to secure the additional GDP. Jobs would be created at a rate of 1.0 percent a year in the period to 2025, compared with 0.6 percent in the business-as-usual scenario.

GDP increase for all states. Every US state can achieve at least 5 percent higher GDP in 2025 by matching best-in-class improvement rates between women and men in work, and half (25 states) can achieve 10 percent or more.

THE GENDER DIVIDENDA BUSINESS CASE FOR GENDER EQUALITY

Yet, we’d better be patient…

117 years until gender parity?Put gender on your agenda.

In its Global Gender Parity Report 2015, the World Economic Forum estimates it will take 117 years to achieve gender parity in the workplace. How can we accelerate this pace? We surveyed men and women leaders from 400 companies around the world to help illuminate the way forward and blended their recommendations with our experience to create the following accelerators.

Accommodate

work/life integration for all

Speed up company culture change with progressive corporate policy

for advancement, make role models visible and set leadership pipeline programs and targets

Make a difference through tone-at-the-top, sponsorship for promotions and education about conscious andunconscious bias

Build supportive environments

Illuminate the path to leadership

Accelerators How

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