Moody’s Analytics recently published a report stating that narrowing the wage gap between men and women in the labor force could increase the global economy by approximately 7% or $7 trillion. However, the report suggests that it may take around 132 years to close the economic gender gap. The increase in productivity resulting from more women joining the labor force and holding productive managerial and professional roles will contribute to this economic boost.
According to Moody, closing the gender gap in labor force participation and management in OECD countries could raise global economic activity by approximately 7%, or $7 trillion in today’s dollars. The report highlights that narrowing the pay gap in emerging markets such as India could increase this potential even further.
The report suggests that women’s family responsibilities and a lack of similar network connections are some of the root causes of the wage gap between men and women. It also notes that women are less likely to ask for promotions and are held to higher standards than men. The report recommends policies such as flexible working conditions, affordable childcare, and paid paternity and maternity leave to help drive change in the right direction.
The World Bank has also recently reported that discrimination had kept the gender wage gap in place. The Bank has noted that gender biases and inequalities that have placed women in low-wage occupations, such as differences in jobs and hours worked, contribute to the gender wage gap. The Bank has further added that almost half of the world’s economies do not mandate equal pay by law.
Moody also notes that although the number of women in OECD countries holding a master’s degree or equivalent exceeds that of men, women still remain significantly underrepresented in middle and senior management roles. This results in consistent “underskilled” of women, referring to the underuse of women’s skills and time, leading to economic loss at both individual and macroeconomic levels.
In short, the report suggests that closing the gender wage gap will require a lengthy and complex process of shifting social norms. However, implementing policies such as enforcing flexible working conditions, providing affordable childcare, and offering paid paternity and maternity leave can help drive change in the right direction.