Gender equality is a term that embraces economic, social and cultural dimension.[1] In the recent years, many countries have made significant progress to close the gender- gap as shown by the indexes created by relevant international organizations, but still so much need to be done because women continue to earn less than men and continue to represent the most share of poor people worldwide. As an engaged actor in Human Resources, Alhambra International is proud to present you our last analysis between women, gender inequality and economic growth.
Global Gender Gap Index (GGGI) was created in 2006 by World Economic Forum (WEF).
It measures the gender-based gaps and ranks the countries based on their gender – gaps and not on their development level. This index ranks the countries in the world giving the lowest possible score of 0 (gender inequality) and highest score of 1 (absolute gender equality). It basically examines the gap between men and women in four fundamental categories: economic participation and opportunity, educational attainment, health and survival and political empowerment. Each one of these categories has a sub-category, for example economic participation and opportunity includes the participation gap, the remuneration gap and the advancement gap; Political empowerment is captured through the ratio of women to men in minister-level positions and the ratio of women to men in parliamentary positions etc. and all the data, in the end, are converted to female/male ratios. According to the WEF reports, Iceland, has been the top performer in the ranking of GGGI all along (2010 to present). It remains the top performer on Political Empowerment and is making radical improvement on the other areas, closing more than 87% of its overall gender gap. Also, Iceland, Finland and France are the three Western European countries that have fully closed both their Educational Attainment and Health and Survival gender gaps. (WEF 2016)
The Gender Pay Gap refers to the different average hourly salaries earned by men and women and it varies considerably across all the countries worldwide. A study from World Bank in 30 European countries revealed that women would need an average raise of 19 percent of their hourly wage to match male wages (WB). They also concluded that even when women have characteristics that should make them better paid, such as more years of education, they still earn less than men. Marriage and children can explain some of the wage gap as also shown also in a study from Center for Economic Studies. The study showed that the age at which women have babies could be a more important cause of the gender pay gap than their education level because having a child between the age of 25 and 35 will significantly affect how much women earn.
Correlation between Gender equality & Economic Growth (measured by country’s GDP).
There are a number of hypotheses concerning this correlation and still recently, there was no real consensus in the empirical studies. Feminist scholars maintain that gender is an important macroeconomic variable and that gender relations can affect economic development and growth (Seguino 2000). The most common hypothesis is that the correlation between gender equality and economic growth is positive, mostly due to more equal human capital investments.
The BSDC’s WomenRising2030 initiative, launched recently works on a research with McKinsey Global Institute showing that if women were to participate in the economy identically to men, they could add as much as $28trn to global annual gross domestic product by 2025
Women and Entrepreneurship
According to OECD, enterprises owned by women are significantly smaller and less than the one owned by male entrepreneurs. Unfortunately, female entrepreneurs still represent the minority in all OECD countries and they also rely less than men on loans, both for starting up and for financing their activities. What needs to be done, is, at least, to ensure the equal access to finance for both, male and female entrepreneurs through actions that influence both the supply of and demand for finance. Also, there is a need to initiate more programs which target female-owned enterprises. An example of this empowerment is in France Foundation Margaret which encourages young women to pursue careers in the new digital positions (only 28% of the positions held by women) and offers specific scholarships for girls who wish to pursue studies leading to careers in the innovation sector. It also carries out awareness-raising operations in high schools, for example through visits to successful entrepreneurs to encourage young women to turn to entrepreneurship in http://lajourneedelafemmedigitale.fr/prix-margaret/ .
The OECD Recommendation on Gender Equality
According to OECD, the first step to fully benefit from gender parity is to address discriminatory social institutions, the root causes of gender inequality.[2] In 2013, OECD has introduced a list of policy principles as recommendations to reduce gender gaps in labor market outcomes. Briefly, they recommend adopting practices that promote gender equality in education by getting girls more interested in STEM (science, technology, engineering, mathematics) and boys more interested in reading and the humanities reducing the gender bias in curricula and by encouraging more women who have completed STEM studies to pursue professional careers in these areas. The discriminatory gender wage gap has to be eliminated and the companies have to take all the appropriate measures to combat all forms of discrimination in pay and sexual harassment in the workplace and in recruitment or promotions. Another effective measure is to provide an affordable childcare for all parents and assure a paid maternity leave for mothers in employment.
Regarding the sexual harassment in the workplace or elsewhere, recently, the ‘’me too’’ movement has taken over globally. This case strongly underlines the power of social networks in this digital area but also the massive importance of awareness-raising and women empowerment nowadays.
After all, gender equality is a fundamental human right and a moral imperative, more than just a multidimensional term for research purposes. Recent studies have shown that women’s economic empowerment is widely recognized as one of the most effective ways of catalyzing positive social transformation. Also, all the researches regarding this topic concluded by OECD come to the same conclusion: Gender equality is a key factor to create more productive, fair and inclusive economies. Greater gender equality in education boosts female labor force participation and their involvement in the economic and public life and this translates to poverty reduction and economic growth. The female labor market outcomes need to be improved, in order to ensure a strong and sustainable economic growth in the future.
[1]According to World Bank, Gender refers to the social, behavioral, and cultural attributes, expectations, and norms associated with being a woman or a man; and Gender equality refers to how these aspects determine how women and men relate to each other and to the resulting differences in power between them. in http://www.worldbank.org/en/topic/gender
[2] To this matter, OECD has created an index called The Social Institutions and Gender Index (SIGI) that measures discriminatory social institutions (formal and informal laws, social norms and practices that restrict women’s rights and opportunities) in 160 countries. It classifies them into five groups, from very low levels to very high levels of discrimination (OECD, 2014). For more information: www.genderindex.org and www.oecd.org/dev/development-gender
Pierre MAURIN Partner ALHAMBRA International
Xhensila ISLAMAJ Junior Consultant ALHAMBRA International