BrazilGreater female employment could bring $6 trillion in gains to OECD
In the shadow of International Women’s Day, professional services firm PwC has pointed to a potential $6 trillion in gains to be made by closing the gender participation gap across the OECD, while fellow accounting network Grant Thornton has charted an alarming decline in female leadership in the ASEAN region in its annual Women in Business report.
In a study on women’s employment, the global professional services giant PwC has pegged the value of greater female workforce participation across the 36 OECD countries at a staggering $6 trillion in added GDP – while improvements in China and India alone could more than double that figure. Elsewhere, the Asian OECD contingent – Korea and Japan – continues to perform poorly on the PwC Women in Work index, hampered by especially large gender pay gaps.
Of the 33 OECD countries assessed for the index – which takes into account five key indicators; the gender pay gap, female labour force participation, the gap between male and female labour force participation, female unemployment and female full-time employment – Korea places dead-last, down one spot from last year and overtaken by Mexico, while Japan failed to improve its 27th ranking – placing behind China had the non-OECD nation been included on the index.
The PwC analysis arrives at its $6 trillion figure by projecting workforce participation levels on par with consistently top performer Sweden (overall second on the index behind Iceland, but a relatively large economy), which boasts a current female employment rate of 69 percent (calculated according to PwC’s own methodology). As a comparison – and in terms of workforce participation – Korea has a rate of around 60 percent, while Sweden sits above 80 percent.
Further to participation rates, PwC calculates that females across the OECD would stand to add an extra $2 trillion in wages should the gender pay inequality be addressed – a boost of 22 percent. Here, Japan and Korea are especially poor performers, with gender pay disparities landing both in the bottom three. According to the analysis, female Korean workers could see a massive 53 percent increase in earnings through pay parity, while pay in Japan would rise by 32 percent.
Now in its seventh edition, the PwC report on women’s employment has for the first time this year included an analysis on India and China – two of the world’s (still rapidly growing) global economic powerhouses and the most populous countries on earth. Here, the $6 trillion female workforce participation figure is overshadowed by a potential $7 trillion GDP gain in India alone (a staggering near 80 percent rise in GDP). China, which already has a high female employment rate of 66 percent, could see a bump of close to $500 billion.
While this may be a relatively low figure in overall Chinese GDP terms, due to the size of the economy and female rates of full-time employment well above the OECD average, closing the gender pay gap in the country would swell local female earnings by $2 trillion, up 36 percent. India, meanwhile, has by some margin the largest gender pay gap of any nation in the study – with $245 billion on the table despite the low participation rates – equating to a 56 percent rise.
“The economic transformation in China and India has undoubtedly resulted in massive employment opportunities for women,” said Sharmila Karve, PwC’s Mumbai-based Global Diversity and Inclusion Leader, before adding a sharp qualifier; “But both countries still have much to do to address their unique challenges to achieving gender equality and to ensuring that women in work can reach their full potential.”
Meanwhile, while analysts are noting the worldwide gains in female workplace representation over the past year, driven in part by the #metoo movement and greater public debate, a Grant Thornton report has shown that the nations of ASEAN have collectively slipped in terms of the proportion of senior level positions held by women – a clear global outlier – with the region’s figure dropping more than ten points from 39 percent to just 28 percent.
Whereas the ASEAN bloc was previously a leader, enhanced by the Philippines’ number one global ranking and strong performance in Thailand and Indonesia, the region now sits below the global average – with the rate of Filipino women in leadership positions plummeting from 47 percent to 37 percent in the space of a year and the country forfeiting its top ranking for fifth. Australia and New Zealand now lead the list of 35 countries studied, with rates above 40 percent.
Global figures
Collectively, ASEAN is now on par with APAC and the EU as middle performer – behind Eastern Europe (32 percent), Africa and North America (31 percent) – while still having the highest global rate (94 percent) of businesses with at least one female senior leader, compared to the EU and APAC which are below 86 percent. Globally, this figure has risen to 87 percent, up 12 percent on last year, while the proportional number of women in senior positions has spiked by five points globally to 29 percent, half of the 10 percent gain made over the past fifteen years.
Despite the disheartening drop in ASEAN, Grant Thornton International’s global leader Francesca Lagerberg concluded that overall; “These figures are incredibly encouraging and a strong indication that gender parity is starting to be taken seriously by businesses. External factors such as increasing organisational transparency, gender pay gap reporting and highly visible public dialogue like the #MeToo movement appear to be making businesses wake up to the change that is needed.”
A Deloitte study toward the end of last found that C-level executives in the Asia Pacific – a region which jumped 14 points this year in Grant Thornton study as to the proportion of businesses with at least one female senior leader – were the most motivated globally by the #metoo movement, with 84 percent citing an impact on their inclusive growth strategies as compared around 64 percent in North and Latin America and just 54 percent across EMEA.
Related: Enhancing gender equality in APAC holds $4.5 trillion potential, says McKinsey
