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India could add 60% to 2025 GDP by bridging gender gap at work: McKinsey
‘Anew study conducted in 95 countries places a definitive value to increased women's participation in the workplace
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‘Namita Bhandare
India has one of the world’s largest gender gaps when it comes to labour force participation, with women accounting for 23-24% ofthe total
bout foree and generating a mere 17% of the share of GDR finds the MGI study. Photo: ijt Bhatlekar/Mtnt
‘New Delhi: India can increa!
simply by enabling women to participate in the economy on par with men, according to a new study by the McKinsey Global
Institute (MG).
e ts 2028 gross domestic product (GDP}, estimated at $4.88 tillion, by between 16% and 60%
‘The upper end of that range—if everything works out the way it should, ora so-called full-potential scenario—could add $2.9
tuillion to India’s 2025 GDP. The lower end—the so-called best-in-region scenario in which all counties only match the rate of
improvement of the best country in the region—could add $700 billion.
‘That holds true for the world as well, according to The Power of Parity: How equality for women could drive S12 tition in
global growth, released on 24 September
‘Equal participation by women would add as much as $28 trillion, or 26%, to the world’s 2025 GDP in a best-case scenario—
roughly equivalent to the size of the combined US and Chinese economies today—or 11% in a best-in-region scenario.
Conducted in 95 countries, home to 93% of the world’s women, the study places a definitive value to increased women's
participation in the workplaceTHE ECONOMIC CASE FOR GENDER PARITY
‘McKinsey Global Institute's Gender Parity Score points to where 95 countries stand on gender parity
‘These countries, grouped into 10 regions, arehome to
93% of the world’s female population.
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“With the 20th anniversary of the Beijing Declaration looming ahead, it seemed to be a good time to do some stock-taking*
says Anu Madgavkar, senior fellow, MGL, the business and economies research arm of McKinsey and Co, and one of the
authors of the report.
‘The September 1995 Beijing Declaration was an attempt to advance women’s rights, such as the right to live free from violence,
to go le school, to participate in decision-making and te equal pay for equal work,
‘The issue of workforce participation by women has been gaining traction in recent times. Just this past week, International
‘Monetary Fund managing director Christine Lagarde said GDP in India would expand by 27% if its women participated in the
workplace at the same rate as men.
Earlier this month, UN Women and Asian Development Bank announced collaboration for a study to track Asia and the
Pacific's progress in meeting gender equality goals.
Economic and social policies should reinforce each other to ‘generate decent jobs for Women and men, provide for training
and economic opportunities in emerging growth sectors and ensure that unpaid care work is recognized and supported’ said
Rebecca Reichmann Tavares, representative, UN Women's Office for India, Bhutan, Maldives and Sri Lanka.
India has one of the world’s largest gender gaps when it comes to labour force participation, with women accounting for only
23-24% of the total labour force and generating a mere 17% of the share of GDP nds the MGI study. This is far below the global
average where female workers generate 37% of the world’s GDP,
But India also has the biggest relative scope to add GDP at 16% in @ best-in-region scenario, The full potential boost would be as.
‘much as 60%, Boosting female labour force participation in India would contribute 90% of gains in the full-potential scenario.
In 46 of the 98 countries studied by MGI, the best-in-region outcome could increase annual GDP in 2025 by more than 10% aver
the business-as-usual case,
But full participation in the workplace cannot take place without gender parity in society. ‘Economic development enables
countries to clase gender gaps, but progress on four indicators in particular—education level, financial and digital inclusion,legal protection and the reduction of unpaid care work~could help accelerate progress’ says the report.
Using 16 indicators of gender equality, the MGI report says itis ‘the most comprehensive attempt to date to estimate the size of
‘economic potential from achieving gender parity and map gender inequality’
Using a gender parity score, the authors find that 40 of the 95 countries where MGI conducted its research have high or
extremely high levels of gender inequality on at least half the indicators that include equality in work, essential services and
‘enablers of economic opportunity, legal protection and political voice and physical security and autonomy.
Gender parity is lowest in South Asia (excluding India) and highest in North America and Oceania,
‘The gender gap
‘The workplace gender gap manifests itself in three ways.
First, women do net participate in the same numbers as men and simply increasing labour force participation would account
for 64% of potential incremental GDP,
‘Second, women work fewer hours than men and closing this gap would generate 23% af GDP opportunity. And finally, women
are disproportionately represented in lower productivity sectors such as agriculture, Shifting women into higher productive
sectors such as business services at par with the employment pattems of men would contribute ancther 23% of the total
opportunity.
Exacerbating the gender gap in paid work is the fact that 75% of global unpaid work—child care, caring for the elderly, cooking
and cleaning~is done by women. The unpaid care work of women could be valued at $10 trillion of output per year—an
amount that is roughly equivalent to 18% of global GDP,
“Alot of work done by women is invisible, unquantified unrecognized and unrecognizable’ says economist Ritu Dewan,
president of the Indian Association of Women's Studies. Household chores, for instance, are not recognized as ‘work’ and nor
are income-saving activities such 2s collecting firewood or water, Add that to GDP caleulations, she says, and the gains will be
impressive.
“Women tend to drop out of the workplace because of a lack of flexibility’ says Sairee Chahal, founder of Sheroes.in, a career
platform for women. ‘As they advance in their careers, they find that they have to balance increasing workplace responsibility
with increasing family responsibilty like ageing parents or teenage children, They end up with two jobs and find that they
‘cannot cope’
oonomist Ajit Ranade agrees. (When a woman's career starts to peak, she is suddenly confronted with multiple conflicting
situations, marriage, children and so on’ he says.
‘There is also, Chahal says, an inordinate focus on bringing women into the paid workforce but not enough on involving men
more in family responsibilities. Companies such as Flipkart, Vodalone, Accenture and Godrej recently announced enhanced
‘maternity leave policies, and minister for women and child development Maneka Gandhi recently said women should get
‘eight months maternity leave,
Companies have! der diversity—increasing paternity leave, for instance. Last month, Intel India
increased paternity leave from five days to 10. Companies such as Accenture have women employee mentorship programmes,
‘2 women's network and training and leadership development for its women employees, said a company spokesperson
yun focusing on.
“These are baby steps’ says Chahal. ‘But they are a beginning’
Interventions
‘The MGI study also looks at interventions to bridge the gender gap by both governments and the private sector."Women need,
to be equal partners in society for them to be equal participants in work. The economic benefits that come from equality in
‘work can then create momentum toward a further narrowing of gender gaps, provided countries use the dividend of higher
‘growth to boost investment in inclusive social spending and urbanization! it says.
Interventions from governments include the enactment of laws that would remove barriers to women entering the workforce,
‘mandating protection of women at the workplace and legislating quotas for women in political office and on company boards.“Governments need to increase the size of the cake, making the right to work a fundamental right for all citizens, men as well
as women’ says Dewan.
Increasing access to education and addressing dropout rates by girls at the higher school levels is another way to increase
women's workforce participation, says Ranade. “in some services sectors, regulatory issues like women not being allowed to
work night-shifts also need to be addressed he says.
But the private sector also plays a role by lowering barriers to women moving into positions of responsibility, providing for
family leave and leadership training and sponsorship of women.
Companies stand to gain since "boosting gender diversity within their own operations could enhance companies’ staffing and
talent; research suggests that increasing the presence and responsibility of women is correlated with improved company
performance, and that there is a connection between the representation of women in leadership positions and corporate
returns’, states the report, For instance, focusing on women could help firms enhanve their understanding of their customer
base end target women consumers better.
‘The report concedes that “economic development alone is not sufficient for women to achieve their full potential’. For
instance, while violence against women does tend to decrease as per capita GOP increases, it remains a global priority issue
where women are nol immune from violence even in the richest economies.
‘The relationship between gender equality at work and overall economic development is even more nuanced, For instance,
women in the poorest regions of the world tend to engage in paid work out of necessity. Bul, as incomes rise, households start
to tade off the economic value ofthis paid work against unpaid household work, Therefore, states the report, there is need to
identify strategies over and above the role played by economic development that ‘accelerate progress toward gender equality
in work and in society’
‘These strategies could include bridging the gender gap in education that not only reap enormous social benefits such as
Iowering the prevalence of child marriage and improving reproductive and maternal health, but also enable greater
participation in the paid workforce
‘Similarly, increasing access of women to the Internet, mobile phones and financial services has moderate correlations to
‘gender equality indicators at work. For instance, greater access by women to the Internet which is an essential tool to job
searches, networking, conducting businesses end receiving microcredit would boost labour force participation among women.
Any strategy to bridge gender gaps will need to recognize significant variations in inequality within countries. In India, for
instance, the issue of sex ratio is largely concentrated in the north, while child marriage is an issue that plagues the east.
Labour force participation shows larger gaps for urban women at 22%, against 36% for rural women,
‘But without tackling gender equality in society, economic benefits cannot be realized. “The first challenge is to understand the
‘gender equality landscape in sufficient detail to be able to prioritize action. The next is to use that knowledge to engineer
‘change! says the report.
Namita Bhandare
TOPICS: GENDERGAP INDIA GDP FEMALE WORKERS LABOURFORCE
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