A new study finds that gender equality could add as much as $28trn to the global GDP by 2025.
Aside from the social and moral implications of female inequality, there is a considerable economic impact as well, claims a new report published by the McKinsey Global Institute (MGI).
The September analysis came with a grave warning, stating that if half of the world’s working age population were not afforded equal employment opportunities, the globe’s GDP growth will continue to suffer significantly as a result.
Women only generate 37 percent of global GDP
Using 15 measures, including the capacity for women to participate in paid work and occupy leading positions, MGI found that 40 percent of the 95 countries studied still have high or extremely high levels of gender inequality.
Despite comprising half of the working population around the world, at present, women only generate 37 percent of global GDP. While 75 percent of unpaid work, including caring for dependents and household chores, is carried out by women – which could amount to $10trn in output a year.
The study quantified two possible outcomes of achieving gender parity. In the event that the best performing country in a region is matched by its neighbors, approximately $12trn could be added to global GDP by 2025. While, if the full potential of each country is realized, a growth rate of 26 percent, amounting to $28trn, could be achieved over the next decade.
This “full-potential scenario” entails the average participation rate of women in the labour force increasing from 64 to 95 percent. The study acknowledges that breaking down numerous social barriers within just ten years and factoring in the personal choice of women, the “best-in-region scenario” is more achievable.
There are many women that choose to stay home and care for their children full time – to have the freedom to do so is as important as the right to work. Yet, there are still many barriers that prevent women from participating in the labour market to the same extent as men. Not only are numerous countries missing out on a major boost to their economy in enabling this status quo, they are also missing a solution to the growing problem of ageing labour forces. Closing the inequality gap requires major shifts in social attitudes, as well as investment in infrastructure and technology, but doing so will be of a major economic benefit for the entire globe.