Empowering Women in the Economy Would Boost Growth, Citi Says
(Bloomberg) -- Improving gender equality could significantly boost growth in advanced economies over the coming decades, according to Citigroup Inc.
Tackling the factors excluding women from work would achieve more than structural reforms currently proposed in the U.S. and Europe, Citi researchers including chief global political analyst Tina Fordham and head of global economics Ebrahim Rahbari said in an 84-page report published Thursday.
Such factors include the burden of unpaid care work, gender discrimination and violence, a lack of legal protection and reduced access to financial services, they said. Removing those barriers could boost OECD growth by between 6 and 20 percent, they estimated.
“It’s about the sheer scope for growth -- 6 percent is what we arrived at for advanced economies, for emerging market countries it’s even higher. So why aren’t we going for it?,” Fordham told Mark Barton in an interview on Bloomberg Television. The proposals in the report would contribute “significantly more than the monetary-fiscal policies that are under discussion.”
Female participation rates are often significantly below those of men, even in advanced economies. The share of women working or actively looking for work in OECD countries averaged 64 percent last year, compared with a male participation rate of 80 percent.
That gap is particularly large in Italy and Japan. The gulf is more than 10 percentage points in the U.S. and the U.K., and it’s only slightly lower in France and Germany.
Policies reducing gender inequality are vital given relatively sluggish growth prospects in advanced economies and the more limited potential of other reforms, the report said.
The European Commission estimates that if all of its possible structural reforms -- including those on tax, unemployment benefits, product markets, human capital and R&D investments -- were implemented, they could lift EU growth by about 6 percent over 10 years. U.S. President Donald Trump’s fiscal stimulus could potentially boost U.S. GDP by 1 to 1.5 percent over 2018-21.
“I’d suggest that the Trump administration have a look at this report,” Fordham said on Bloomberg TV. “Many of the ways to remove barriers to women are pretty easy to implement -- and you can see that in the case where we compare the U.S. and Canada.”
Female labor force participation in Canada has risen gradually since 1990, helped by tax reforms, family support and wage and income equalization, the report said. The public sector has made gender diversity an objective, and private firms and institutions have started to collect metrics to track and reduce wage discrepancies.
But progress in the U.S. has stalled. There are few U.S. federal mandates that support equal pay between men and women, no laws that guarantee paid family leave and tax rules continue to penalize married couples.
Both Canada and the U.S. nevertheless have a gender wage gap that exceeds the OECD average.
“Constraints on women’s economic empowerment are rooted in unaddressed gender inequalities in society,” the report said. “Layers of disadvantage -- including those related to poverty, ethnicity, disability, age, geography, and migratory status -- remain powerful obstacles to equal rights and opportunities for hundreds of millions of women.”
©2017 Bloomberg L.P.