Increased Gender Equality Leads To Higher GDP

women

The World Economic Forum has released a new report on gender equality. What’s most interesting is the finding that increased gender equality leads to higher GDP:

According to a newly-released report from the World Economic Forum[pdf], Iceland is the #1 country in the world for gender equality, for the fifth year in a row. And that equality is helping propel Iceland and its fellow Nordic nations to new economic heights. Turns out, the smaller the gender gap, the more economically competitive the nation. Even when that nation is totally freezing.

The notion that gender equality drives development (rather than the other way round) has been so widely celebrated in recent years that it begins to seem trite. But as the newly released 2013 Global Gender Gap Index — which measures gender parity in 136 countries — reminds us, gender equity isn’t simply a matter of equal rights. It’s a matter of efficiency. Many countries have closed the gender gap in education, for example, but gender-based barriers to employment minimize their returns on that investment; Their highly educated women aren’t working. The highest ranking countries in the index have figured out how to maximize returns on their investment in women, and are consequently more economically competitive, have higher incomes, and higher rates of development.

The report notes a strong correlation between Global Gender Gap Index rankings (which measure health, education, labor political and participation) and measures of global competitiveness, as the graph below illustrates. The smaller the gender gap, the better off the economy. Perhaps it’s no surprise that less-developed nations lke Yemen and Pakistan are near the bottom of the Index. What’s more surprising is that relatively economic powerhouses like Turkey and Japan are right there in the basement with them.

Take the Philippines. It ranks #5 on the Global Gender Gap Index, higher than any other Asian nation. It’s the only country in Asia that has fully closed the education gender gap, and its labor force boasts growing ranks of women workers, especially professionals and managers. Not surprisingly, the Philippines is now the fastest growing economy in Asia, having recently edged out China (#69 on the index). There are many reasons for this, including macroeconomic policy reforms under Aquino, but the role of a large, educated and diverse work force shouldn’t be discounted; Indeed, gender parity in Filipino education and labor preceded recent economic growth.

Though not exactly analogous, something similar is playing out in the corporate world. A 2012 report by Credit Suisse found that companies with at least one woman on the board outperformed those without by about 26 percent. A 2012 report by McKinsey & Company similarly found that companies with more diverse boards boasted higher profit and higher returns on equity than others. It could be that better performing companies are in a better position to give women a chance, but the researchers at Credit Suisse suggest that simply diversifying the leadership pool can generate surprisingly positive results.

So, what are the highest ranking countries doing right, exactly?

One major factor, which the report notes every year, is that high ranking countries “have made it possible for parents to combine work and family, resulting in high female employment, more shared participation in childcare, more equitable distribution of labor at home [and] better work-life balance for both women and men.”

Meanwhile, in the United States, the notion that women could conceivably someday successfully combine work and family is still constantly under debate. Incidentally, the U.S. dropped one place in the rankings to #23 — below Burundi, Cuba and, god forbid, Canada.

This report reflects copious other research that finds that when women are included in groups at work, those groups perform better and make more money.

That the industry I work in (Hollywood) persists in keeping women out of the plum jobs of screenwriter, director, showrunner — whether through conscious or unconscious bias or a deeply systemic, old-fashioned boys’ club — whatever it is, it’s resulting in making worse product and artificially limiting our profits.

21 thoughts on “Increased Gender Equality Leads To Higher GDP

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