The economic benefits of gender parity
If women were to participate in the economy identically to men, they could add as much as $28 trillion or 26 percent to annual global GDP in 2025, write Anu Madgavkar, Kweilin Elingrud, & Mekala Krishnan in the Stanford Social Innovation Review.
The idea that persistent gender inequality has very large economic costs is increasingly accepted. In fact, new research from the McKinsey Global Institute (MGI) finds that if women were to participate in the economy identically to men, they could add as much as $28 trillion or 26 percent to annual global GDP in 2025. This is roughly the combined size of the economies of the United States and China today.
Even an alternative “best-in-region” scenario—in which countries match the progress of the neighboring country that has made most headway in closing its gender gap—would make a great difference. Such a scenario would add as much as $12 trillion in annual GDP in 2025. That’s equivalent to today’s combined GDP of Japan, Germany, and the United Kingdom. In that scenario, female workers would contribute about double the GDP growth they are currently on track to achieve.
So it follows that taking bold action to increase the economic participation of women is critical for long-term prosperity. What is perhaps less appreciated, though, is the fact that we will achieve economic gender equality only if we also tackle social gender inequality. Women need to be equal partners in society in order for them to be equal participants in work.