London: The global economy is losing out on at least $7 trillion of economic gains each year due to a failure to reach gender parity in the workforce, according to a new analysis that comes as progress on equal pay stalls.
That’s based on estimates by Moody’s Analytics, which assumes a scenario where there’s no gender gap in labor force participation, as well as management, in Organization for Economic Co-operation and Development nations.
Yet these 38 nations, which include some of the largest developed economies in the world, such as the US, UK and Japan, have seen the development on equal pay for women fall behind.
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A recent report by Pew Research Center found that pay parity has stagnated in the US for the last two decades, with women in 2022 earning an average of 82 per cent of what men earn. The comparative pay was 80 per cent in 2002. Meanwhile in the European Union, women may be waiting until 2086 for equal pay.
“There has been progress, but it’s not going nearly fast enough,” said Dawn Holland, director of economic research at Moody’s Analytics and co-author of the report. “There are a lot of complex sort of issues behind these gender gaps” such as social norms which take a long time to shift, she said.
The gap is particularly apparent among upper-management, with only 23 per cent of executive roles globally held by women, according to Moody’s Analytics. While women are more likely to make further investments in education, they tend to land lower-level and lower-paid jobs, the report said.
While the authors caution that they are making “back-of-the-envelope” calculations with caveats, gender parity in the labor force for people aged 25-64 across OECD nations could raise global economic output by 6.2 per cent, they said. That could rise a further 0.7 per cent if the share of female managers and professionals increased to match men.
Holland said measures such as paid maternity and paternity leave, as well as more affordable childcare could help close the gender gap and suggested the world may be at a turning point. “Equality is sort of on the radar of all countries in a way that it hasn’t always been,” she said.