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Women can up GDP by 26 per cent!

McKinsey Global Institute (MGI) has come out with a research report to suggest that if the gender gap between men and women workforce is closed globally and women participation in the workforce is equal to men, the worlds annual GDP would increase by USD 28 trillion or 26 per cent in 2025!

Women can up GDP by 26 per cent!

India has the highest potential for GDP boost among 95 countries at 60 per cent, rest of South Asia at 48 per cent and MENA region at 47 per cent to total GDP by 2025 in a full potential scenario. When viewed from the context of best-in-region scenario, India has the potential to add to 16 per cent of GDP followed by 14 per cent in Latin America and 12 per cent by China and sub-Saharan Africa.

Essentially, this would be the contribution of the fair sex, who are currently unemployed or underemployed.  The other findings too are revealing.

 

Gender parity score

 To measure gender parity in different countries, MGI has developed a gender parity score that reflects how each country has performed in gender parity.  A score of 1.00 would indicate perfect gender parity. Out of 95 countries, North America and Oceania score highest at 0.74 and south-Asian countries, excluding India, score 0.44.

The global issues impacting scores include blocked economic potential, time spent in unpaid care work, fewer legal rights, political under-representation and violence against women are globally pervasive issues.  The regional issues impacting scores include low labour-force participation in quality jobs, low maternal and reproductive health, unequal education levels, financial and digital exclusion, and girl child vulnerability.

 

Low contribution to paid work

 While women constitute half the world’s population, they account for 37 per cent of the world’s GDP. Incidentally, 75 per cent of unpaid work, including household tasks such as childcare, eldercare, cooking and cleanings undertaken by women, is not counted in GDP computation. The unpaid work by women amounts to USD 10 trillion a year, roughly amounting to 13 per cent of global GDP.

The reasons for low participation of women are many. One, women work fewer hours than men as they work part time jobs, due to family responsibilities. If all women worked full time, the gender gap would close in by 23 per cent of GDP opportunity. Two, women are disproportionately represented in lower productivity sectors like agriculture and higher productivity sectors like business services. Moving women up the value chain would add another 23 per cent.

 

Regional contribution

 India has the highest potential for GDP boost among 95 countries at 60 per cent, rest of South Asia at 48 per cent and MENA region at 47 per cent to total GDP by 2025 in a full potential scenario. When viewed from the context of best-in-region scenario, India has the potential to add to 16 per cent of GDP followed by 14 per cent in Latin America and 12 per cent by China and sub-Saharan Africa.

 

Three keys to achieving full potential

 1. Gender equality in society: This includes the ability of more women to get engaged in paid work and share unpaid work with men more equitably, skills and opportunities to perform higher-paid jobs and occupy leading positions in the economy. According to MGI, 40 out of 95 countries analysed have extremely high level of inequality on half or more of 15 parameters.

2. Equality in work: The gender gap remains extremely high, with women comprising only 40 per cent of the total global labour force, despite 50 per cent of the share in working age population. There is a worldwide perception that women earn less than men for equivalent work for 87 countries, and this remains a very significant issue. While men are three times as likely as women to hold leadership positions like legislators, senior officials, and managers, women spend three times the number of hours on unpaid care work. Women spend ten times as many hours as men in India in unpaid care work.

3.  Essential services and enablers of economic opportunity: Regarding education, women attain only 75 per cent of the education levels of men in 17 out of 95 countries. Globally, women have only 77 per cent of the access that men have to financial services and 84 per cent of access to the Internet and mobile phones compared to men. Maternal mortality is a source of high inequality in 42 out of 95 countries.  Further, women are still far behind when it comes to legal protection, political participation, where women constitute only 22 per cent of men!


Four areas to boost equality

These include:

Education level –Educated women are more likely to share unpaid work more equitably with men, work in technical and professional occupations and assume leadership roles.

Financial and digital inclusion – Financial inclusion and access to mobile and the Internet has a moderate correlation with indicators of work equality. However, 52 per cent of 4.4 billion people offline are women.

Legal Protection – Legal protection also shows a moderate correlation toward work equality and social equality indicators.

Unpaid care work – Women engaged with unpaid care work has a high correlation with female labour force participation rates and moderate correlation with assuming leadership jobs. Routine jobs such as cooking, cleaning, home maintenance, caring for children and aging relatives, out of which some can be reduced or eliminated through automation and infrastructure, sharing with men or can be outsourced and converted into a paid service. This will increase the financial independence of working women.

Intervention by private sector

Some of the methods that can be used through private sector intervention are listed below:

Financial incentives and support – Some government’s transfer cash in the name of girls to change the mindset of the society and help the girls get educated. Reduction of tax contribution for the second earner, like in Canada will help increase female labour force participation.

Technology and infrastructure – Infrastructure facilities such as sanitation, transportation, mobile packages and apps, mobile-based emergency services for victims of violence, and providing energy and water in homes will go a long way in increasing female workforce participation.

Creation of economic opportunity – Private sector can play a major role in opening up new avenues for entrepreneurship and productive work, as well as skill building and encouraging women-led businesses.

Capability building – This involves imparting education to deliver capabilities among girls and women, giving high-quality education in science, technology, engineering and mathematics as well as vocational training.

Advocacy and shaping attitudes – Social norms and attitudes on gender equality are tough to crack. Programmes to engage communities and individuals in dialogues will help. Companies can make efforts to eliminate unconscious bias related to men and women employees in the areas of hiring, retention and promotion practices.

Laws, policies and regulations – Legislations that protects rights of women to counter issues such as violence against women and anti-discriminatory policies in the labour market will go a long way in bridging the gap. The government can work with the NGOs and private sector to accomplish this.

May be, it is time to assess the situation and prioritise action to ring in a change in the global society.

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