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News

Accelerating gender parity: What can governments do?

5.02.2019
Company: McKinsey & Company, Inc. Prague

Given slow progress toward gender equality in the workplace, governments, along with private-sector organizations, must focus their efforts on specific impact zones.

In 2015, 193 member nations of the United Nations signed the Sustainable Development Goals (SDGs). Goal 5 is to “achieve gender equality and empower all women and girls.” Three years into the SDG agenda, gender inequality remains a critical issue across the world.

Governments can play a decisive role in accelerating progress toward parity through legislation, fiscal measures, programmatic change, and public–private partnerships. Consider just three examples:

  • In Singapore, the women’s labor-force-participation rate doubledfrom 28 percent in 1970 to 58 percent in 2016, reflecting a range of policies helping women to achieve work-life balance, including paid maternity leave, paid and unpaid childcare leave, increased tax relief, tax rebates, and childcare subsidies.
  • In Japan, which offers the most generous paid paternity leave in the world, very few men took advantage, because they felt it was unacceptable. Yet after former labor minister Yasuhisa Shiozaki declared himself an “Ikuboss”—someone who values “Ikumen,” or men playing their part in caring for children—participation in the labor-ministry program has risen from under 14 percent to over 40 percent.1
  • In Canada, Prime Minister Justin Trudeau named the country’s first gender-balanced cabinet in 2015, which created significant momentum toward gender parity. According to the UN Global Compact Network in Canada, the fifth SDG was “the single most acted-on SDG in Canada in 2017.”

The case for change: Why gender inequality matters

Women make up half the world’s population but generate 37 percent of global GDP, reflecting the fact that they do not have equal access to labor markets, opportunities, and rights. Gender inequality is not only a pressing moral and social issue but also a critical economic challenge.

Consider the facts. There are 655 million fewer women in the labor force than men, women spend three times the amount of time as men on unpaid care work in the home, 195 million fewer women than men are literate, 190 million fewer women than men have a bank account, and there are only 22 women in ministerial and parliamentary positions for every 100 men.

McKinsey Global Institute (MGI) research in 2015 found that fully closing gender gaps in work could add as much as $28 trillion to annual GDP in 2025. Even in a more attainable scenario in which each country matches the progress toward gender parity of the best performer in their region, an additional $12 trillion could be added to GDP in this timeframe. Every region studied has the potential to increase its GDP by 8 to 16 percent between 2015 and 2025.

Would you like to learn more about the McKinsey Center for Government?

The untapped—and unmeasured—contribution of women is enormous. Seventy-five percent of the world’s total unpaid care is undertaken by women, including the vital tasks that keep households functioning such as childcare, caring for the elderly, cooking, and cleaning. MGI estimates that unpaid work being undertaken by women today amounts to as much as $10 trillion of output per year, roughly equivalent to 13 percent of global GDP.

Despite the benefits of gender equality, large gender gaps exist around the world

Despite the large economic (and social) benefits of gender equality, large gender gaps persist around the world. MGI has mapped 15 gender-equality indicators for 95 countries and calculated a gender-parity score (GPS) for each region. A GPS of 1 indicates full parity. The 15 indicators cover both gender equality in work and society—the two go hand in hand. While absolute scores on equality in society tend to be higher than those of equality in work for most countries, MGI found virtually no countries with high equality on social indicators but low equality in terms of employment and labor markets. This suggests that gender equality in society is a powerful driver or determinant of gender equality in work.

MGI found that 40 countries had high or extremely high levels of gender inequality on at least half of the indicators. North America and Western Europe have made the most progress toward parity with GPS scores of 0.73 and 0.71, respectively. The regions with the farthest to travel are the Middle East, with 0.50; Asia–Pacific, with 0.56; and sub-Saharan Africa, with 0.57 (exhibit).

 

Exhibit
Every geographical region is some distance away from gender equality.

Although there have been some notable successes, overall progress toward parity has been slow. Take progress toward equality for women in the workplace, for example. On the current trajectory, the World Economic Forum reckons it will take 81 years to close the gap completely. Similarly, MGI notes that the average maternal mortality rate fell from 276 deaths per 100,000 live births in 1995 to 135 in 2013; at this rate of decline, the rate will still be as high as 84 deaths in 2025. Unmet need for family planning fell only marginally from 12.7 percent to 11.7 percent between 2004 and 2014. At that rate, unmet need would still be 10.6 percent in 2025.

How can governments prioritize action on gender equality?

All forms of gender inequality need to be tackled, but, given the magnitude of the gap and limitations on resources, it is important for governments, often in partnership with private-sector organizations, to focus their efforts. To help them do so, MGI identified ten “impact zones” that reflect both the seriousness of a type of gender inequality and its geographic concentration. Action in these areas could move 75 percent of women closer to parity.

Five are global impact zones of gender inequality affecting many countries, whether advanced or developing. These impact zones are blocked economic potential, time spent in unpaid care work, fewer legal rights, political underrepresentation, and violence against women. The three biggest impact zones that affect women globally are fewer legal rights (affecting 2.5 billion women), time spent in unpaid care work (1.3 billion women), and violence against women (723.0 million).

How advancing women’s equality can add $12 trillion to global growth

Tags: Finance | Business Development |

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