Gender parity is essential for economic recovery: These five investments will quicken the pace

This article was originally published on 8 March 2023 and updated to reflect the latest data from the Global Gender Gap Report 2023.

Progress towards gender parity has seen major setbacks in recent years and the risk of further regression is intensifying. The COVID-19 pandemic caused a generational loss, increasing the projected time to reach global gender parity from 100 to 132 years between 2020 and 2022. Women’s rights are under pressure around the world.

Not only are millions of women and girls losing out on access and opportunity, these reversals also have wide-ranging consequences for the global economy. At the same time, women continue to pioneer new firsts, rising to positions of power never previously held by a woman in public and private sector leadership. For the first time, there is at least one woman in every parliament in the world and new research shows that diversity among women MPs is at its highest level ever.

We are living through a time of polycrisis, marked by high volatility and unprecedented uncertainty. Economic chasms have opened up with a disproportionate impact on women, people of colour, LGBTQI individuals and individuals with disabilities. For intersecting identities across these dimensions, disadvantages are often compounded. At the start of 2023, we saw continued and, in some cases, widening exclusion of women from full economic participation as employees, leaders, consumers and suppliers; long-term trends, including technological change and climate change, look set to deepen gender gaps; and a lack of recognition of the value of unpaid work, as well as a highly unequal distribution of care work persist. While technology has seen breakthroughs at unprecedented speed in recent years, access remains highly uneven and innovation is not targeted to resolve today’s biggest challenges or serve all individuals.

Achieving gender parity remains a formidable, multi-dimensional challenge. According to the 2023 Global Gender Gap Report, the two largest gaps remain in the realms of economic opportunity (with 60.1% of the global gender gap closed) and political empowerment (with only 22.1% of the gap closed). Where should we concentrate our collective efforts?

The pandemic years saw significant drops in women’s labour force participation in every region of the world. In particular, women with care responsibilities were among those leaving the labour force and not returning. Global gender parity for labour force participation had been slowly declining. This year has seen a small increase from last year's all time low since the index was first compiled - but at 64% this is still the second-lowest point since the first edition of the index in 2006 and significantly below its 2009 peak of 69%. The IMF estimates that increased female labour force participation alone could boost some countries’ economic output by as much as 35%.

In 2023, women hold 32.2% of global senior leadership roles across public and private sectors, marking a decline since last year. Women continue to be outnumbered by men in senior leadership positions across all industries, especially so in fields like Manufacturing (24.6% women); Agriculture (23.3%); Supply Chain and Transportation (23.0%); Oil, Gas and Mining (18.6%); and Infrastructure (16.1%).

Other industries fare better, including Healthcare and Care Services (49.5%), Education (46.0%), Consumer Services (45.9%), Government and Public Sector (40.3%), Retail (38.5%), Entertainment Providers (37.1%), Administrative and Support Services (34.7%), and Accommodation and Food (33.5%).

But overall, women are leaving leadership positions at increasing rates, both in industry and politics. The challenge remains to not only create conditions in which women can advance into senior leadership roles, but where they can thrive in such roles. More diverse leadership across stakeholders is key to tackling the current crisis, as the diversity of perspectives has been shown to lead to more fact-based and, therefore, higher-quality decision-making.

Gender pay gaps remain one of the starkest markers of inequity in the current system. According to the 2022 Global Gender Gap Report, the global gender gap for estimated earned income was approximately 49%, while it was 35% for wage equality for similar work. Across OECD countries, the pay gap stands at 13% for the median earnings of full-time workers. Pay gap reporting and/or auditing by private sector firms, still relatively new measures, are by now mandatory in almost half of OECD countries, yet evidence to date has found small effects at best. More promising examples for scaling are emerging from the forefront of industry action, with individual companies designing ambitious global governance frameworks and automated analytics to close gender pay gaps.

Women continue to be overlooked in critical parts of the innovation ecosystem. Women remain significantly underrepresented in science, technology, engineering and mathematics (STEM) occupations, which are an important set of jobs that are well remunerated and expected to grow in significance and scope in the future. Currently, just 29.2% of all STEM workers are women.

An intention to create more gender-equal innovation systems brings into focus a number of levers to advance gender equality. These include ensuring equitable access to education and training for in-demand STEM skills, equitable access to jobs and leadership opportunities in the industries of the future, fair access to venture capital and, at a more basic level, closing the digital gender divide. Tackling these dimensions is critical to ensuring a fair transition to the green and digital economy, creating products that are gender responsive and serve a wider market, as well as increasing the talent pool, leading to more creative and faster progress in solving the tremendous challenges humanity faces today.

In many countries, care jobs are characterised by low pay and low social mobility and are predominantly filled by women, people of colour and migrant workers. When it comes to unpaid care work, 76% globally is performed by women, often preventing them from taking up paid employment. In economies that measure the value of unpaid care, the sector has been valued to represent a critical share of GDP – ranging between 10 and 39% according to the ILO and this number is set to grow as shifting demographics will increase the demand for care services. Thus, building a well-functioning care economy will positively impact women’s ability to participate in the economy on equal terms and, therefore, contribute to closing gender gaps in workforce participation, pay and leadership.

In 2023, gender parity must be a central goal of economic policy-making and business strategies. Focusing efforts on these five dimensions will not only create fairer societies but will be a high-return investment into the future of the global economy and a pre-condition to solving the current crisis.