Delivering The Power of Parity: Towards A More Gender-Equal Society

Delivering The Power of Parity: Towards A More Gender-Equal Society

December 17, 2016

PREFACE

McKinsey Global Institute (MGI) in their 2015 report ‘The power of parity: How advancing women’s equality can add $12 trillion to global growth’, undertook a thorough attempt in order to estimate the magnitude of economic potential that can be achieved via gender parity and to map gender inequality.

IN BRIEF: DELIVERING THE POWER OF PARITY

MGI’s research has established a large potential economic gain from narrowing the gender gap in the world of work: $12 trillion in 2025 if all countries match the fastest historical rate of progress in their region. That represents an 11 percent boost to GDP above a business-as-usual scenario. 15 indicators of gender equality are combined by MGI’s Gender Parity Score (GPS) across 95 countries to assess the route, distance and time required to achieve the economic potential of women and the UN’s Sustainable Development Goals (SDGs).

As an initial road map for action and investment, this report has focused on six indicators: education, unmet need for family planning, maternal mortality, financial inclusion, digital inclusion, and unpaid care work. The reasons to pick these elements are:

  • The first four are strongly correlated with gender equality in work
  • The latter two are closely linked to broader societal aspects of gender equality, such as child marriage and violence against women.

These elements either enable women to have better economic opportunities or are closely linked with broader aspects of gender equality. The estimate is to understand the quantity of people who need to be empowered through action on each of these fronts and the quantity of expenditure it would require.MGI found that, $1.5 trillion to $2.0 trillion in incremental public, private, or household annual spending would be needed in 2025, above and beyond what would be spent anyway as a result of rising population numbers and GDP. This is equivalent to 1.3 to 1.7 percent of global GDP in that year. This discussion paper examines the societal improvements in gender parity needed to secure the $12 trillion opportunity and make significant progress towards reaching the SDGs.

NARROWING THE GLOBAL GENDER GAP COULD SECURE $12 TRILLION OF ADDITIONAL ANNUAL GDP IN 2025

MGI’s full-potential scenario that assumes average rate of women participation in work-force increases from 64% to 95% identifies that around $28 trillion could be added to GDP in 2025 in turn raising global economic output by 26%. This potential impact is roughly equivalent to the combined size of the economies of the United States and China today. However, this scenario of full gender parity in work is improbable to materialize within a decade. Participation being a personal choice with societal pressure, the barriers that hinder females to participate in the labor force equally as men is a challenge to be addressed in the given time frame.

GENDER EQUALITY IN WORK AND GENDER EQUALITY IN SOCIETY GO HAND IN HAND

95 countries making up more than 95% of global GDP and the world’s female population were studied for gender equality by MGI. 15 indicators of gender equality were examined by MGI in order to find out the link between broader gender gaps and possibility to achieve the economic potential of women. These indicators were categorized in four ways.

Gender equality in work is the first category while following that were, essential services and enablers of economic opportunity; legal protection and political voice; and physical security and autonomy-all relate to gender equality in society. A correlation has been suggested that the barriers holding women back in society may hinder them from participating in the workplace.

MGI’S FRAMEWORK HELPS ASSESS PROGRESS NEEDED TO ACHIEVE THE GENDER-BASED SUSTAINABLE DEVELOPMENT GOALS AND REALISE THE ECONOMIC POTENTIAL OF WOMEN

The indicators mentioned above along with the GPS analysis is believed to be an effective starting point to assess the distance we can and need to travel to achieve the economic potential of women and the Sustainable Development Goals (SDGs) adopted by all 193 members of UN in 2015.

IMPROVEMENT OF 8 TO 21 PERCENT IN GPS IS THE MINIMUM NECESSARY FOR ACHIEVING THE $12 TRILLION GDP OPPORTUNITY IN 2025

An improvement of even 10% in the global GPS would refer that 22 million additional would have the access to financial service accounts. These estimates are said to be reflecting both what is needed and what is possible.

In order to reflect what is needed, improvement of overall GPS consistent with better economic participation of women in each country is estimated. To reflect what is possible, each country’s improvement potential on individual indicators is estimated.

MILLIONS OF WOMEN NEED BETTER OPPORTUNITIES AND ACCESS TO SERVICES

The number of people who would need improved access varies across regions and indicators. The examples could be the difference of support required by women in South Asian and Sub-Sahara African region, and in North America, where one presses more on secondary schooling and basic services such as sanitation and water, and the latter should be focused on is in the case of family support services.

INCREMENTAL SPENDING OF $1.5 TRILLION TO $2.0 TRILLION (1.3 TO 1.7 PERCENT OF GLOBAL GDP) WOULD BE NEEDED TO DELIVER ESSENTIAL SERVICES TO THOSE WHO NEED THEM IN 2025

As already mentioned before, there are differences in the mix of expenditure required across different regions.  For example South Asian and Sub-Sahara African regions will need a significant share to acquire services like energy, water and sanitation while other regions require shares for family support services such as child care. Education takes up a significant amount in all regions. However, the level of education is different for both South Asia and Sub-Saharan Africa where secondary education is the primary focus. Nonetheless, 55% of global education shares are attributed to higher enrolment of boys than girls.

The spending needed can come from public, private, and household or individual sources. It is equally important to tackle attitudes that ensure individual households utilize the services offered to correct gender imbalances. That not only includes the matter of education and healthcare, but also sharing domestic work equally between both genders.

PUBLIC – AND PRIVATE SECTOR PLAYERS CAN WORK TO FURTHER GENDER EQUALITY IN SOCIETY AND REALISE ITS ECONOMIC GAINS

MGI identified 75 interventions and more than 150 case examples that have been used to narrow gender gaps.

Specific interventions through legislation, framing of policies, and funding discussed by policymakers could play a vital role. Most of these interventions require the involvement of public, private- and nongovernmental sector organizations.

A more gender-equal society can promote a more gender-equal economy and benefit companies in myriad ways. The private sector can play an important role not just in investment and financing, but also in framing and executing strategies. One example is Tata’s initiatives in India to fund sanitation facilities for girls in school.

CLOSING THE GENDER GAP CALLS FOR SUBSTANTIAL INVESTMENT AND SUSTAINED EFFORT, BUT IT WOULD PRODUCE AN ENORMOUS PAYOFF IN THE FORM OF ECONOMIC GROWTH AND MILLIONS OF LIVES TRANSFORMED.

– Fannana Ahmed

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