Equity, Diversity and Inclusion

Measuring wealth: a key step to effectively narrow the gender gap

Wealth equity index and Gender gap: Two Businesswomen Using Laptop

Wealth equity index and gender gap: Women experience cumulative disadvantages in their working careers, leading to less wealth at retirement. Image: Getty Images

Manjit Basi
Senior Director, WTW
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Education, Gender and Work

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  • According to the new Wealth Equity Index, women accumulate only 74% of the wealth that men have at retirement.
  • Women are cumulatively disadvantaged throughout their working careers.
  • Purpose-driven leadership and equitable total rewards are the foundation of solutions to this disparity.

Longstanding global societal and business inequities have disproportionately affected wealth accumulation for women. Despite an increased focus of business leaders on diversity, equity and inclusion (DEI), and gender equity in particular, women worldwide are expected to have significantly lower accumulated wealth than men at retirement. According to a new global Wealth Equity Index report from WTW in collaboration with the World Economic Forum, women upon retirement are expected to have only 74% of the wealth that men have.

While boards of directors, companies and governments worldwide have acknowledged career gender inequities such as the gender pay gap and the under-representation of women in board and leadership roles, and are making progress to narrow these inequities, more progress is needed. Additionally, these inequity drivers – and the corresponding actions to narrow them – are often considered in isolation of one another, and actions taken do not measure or address outcomes.

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By providing a holistic view of disparities, across women’s working lifetimes and consistently measuring wealth at the end of their careers, the new global Wealth Equity Index illustrates how women are disadvantaged throughout their working lifetime. The model projects the expected outcomes for women along with the key drivers – and will help drive actions from the public and private sectors to address the specific factors causing inequitable outcomes.

The new metric models wealth inequity for women and calculates a wealth index for 39 countries worldwide. For each country, it establishes a value between 0 and 1 that represents the ratio of female to male accumulated wealth at retirement. The model projects wealth accumulation during a career life cycle – incorporating state and mandatory benefits, employer-sponsored retirement plans, real estate and personal savings. This quantifiable measure is critical for assessing accumulated wealth outcomes and ultimately illustrates how women are cumulatively disadvantaged throughout their working career.

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    Key findings from the new Wealth Equity Index:

    1. The average global Wealth Equity Index across the 39 countries included in the analysis is 0.74. This means that upon retirement women will only accumulate 74% of the wealth that men have. With the country indices ranging from 0.60 to 0.90, we see a significant variation of gender wealth equity within individual countries.

    2. Primary drivers contributing to gender-based wealth disparity include gender pay gaps and delayed career trajectories. Additionally, gaps in financial literacy and responsibilities outside the workplace (e.g., child and elder care) influence women’s participation in paid employment and therefore their ability to build wealth.

    3. Women in senior positions have the largest gaps in accumulated wealth. The index considers different roles to measure the impact of gender on wealth accumulation across different career paths. For frontline operational roles, the overall gender wealth gap averages 11%; for professional and technical type roles, the gap nearly triples, averaging 31%; and for senior experts and leadership, it grows further to an average of 38%. Wealth inequity is greatest for women in senior expert and leadership positions as they face the compounded effect of greater pay gaps and more limited career progression.

    4. Caregiving has a negative impact on women’s ability to accumulate wealth. Caregiving responsibilities leading to part-time work and career breaks affect women disproportionately compared to men, as they lower their rate of workforce participation and time spent employed. Such gaps in wage earning have the knock-on effect of lower wealth accumulation at retirement. Structural differences in statutory leave provisions related to childcare exacerbate the gender inequities.

    5. Retirement plans are a significant component of accumulated wealth. All 39 countries included in the wealth index provide state retirement benefits, and some provide mandatory retirement benefits. Employer-sponsored plans are also prevalent. The index revealed the importance of employer-sponsored plans – and the impact that pay inequity between genders, delayed career progression, caregiving and financial literacy have on wealth at retirement. Women typically have lower financial awareness, investor confidence and risk tolerance throughout their careers, resulting in a compounding effect on their wealth.

    The Wealth Equity Index clearly illustrates a global inequity in wealth accumulation for women at retirement and the need for focused efforts from individuals, governments and businesses to close this significant gap. Providing an objective metric showing gender wealth inequity at retirement and the intermingled drivers for the gap, the index gives a momentum for action and sets a baseline to track future progress.


    What's the World Economic Forum doing about the gender gap?

    Purpose-driven leadership and programmes, equitable total rewards (pay, benefits, careers) and flexible work approaches, comprehensive social infrastructure, equitable provisions for family leave and accessible financial instruments and education will help narrow the gap.

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