According to the IMF, narrowing the gap between the share of men and women who work is one of the very important reforms policymakers can make to revive economies. This is especially true amid the weakest medium-term growth outlook in more than three decades.
With global growth predicted to languish at just 3 percent over the next five years, many economies are missing out by not tapping women’s potential. Only 47 percent of women are active in today’s labor markets, compared with 72 percent of men.
The average global gap has fallen by only 1 percentage point annually over the past three decades.
Preventing women from realizing their full economic potential is a shocking waste of talent, leading to losses in potential growth.
The IMF estimates that emerging and developing economies could boost GDP by about 8 percent over the next few years by raising the rate of female labor force participation by 5.9 percentage points.
Policymakers can lift growth in many ways, from governance reforms to strengthening institutions, to financial reforms in order to unlock capital for investment.
Unfortunately, present policies do not come close to closing gender gaps. Many researchers say it’s inevitable that women’s labor force participation will eventually reach that of men, even if it takes centuries. But gender gaps are unlikely to ever close if present policy trends persist.
Read: Insights on WEF’s Global Gender Gap Report for 2023
IMF analysis of three decades of data shows that countries have made progress in increasing women’s participation, but economies of all income levels experienced several setbacks—a result of shocks, crises, and policy reversals.
The pandemic, for example, eroded progress closing gender gaps, especially for women with young children.
Gaps would remain large for most countries, exceeding 16 percentage points in one out of ten countries.
Countries must step up efforts to break down barriers to women’s participation in the labor market—barriers such as limited access to education, health, assets, finance, land, legal rights, and care services. They should systematically take account of how macroeconomic, structural, and financial policy packages impact women.
The IMF’s gender strategy aims to assist member countries in these efforts.
EU female labor force and GDP
By 2050, improving gender equality would lead to an increase in EU (GDP) per capita by 6.1 to 9.6%, which amounts to €1.95 to €3.15 trillion, according to the European Institute for Gender Equality
Compared with labor market and education policies, gender equality policies have a strong impact on GDP. For example, a recent study showed that improvements in educational attainment across EU Member States would lead to a 2.2% increase in EU GDP in 2050
Improvements in gender equality would lead to an additional 10.5 million jobs in 2050, which would benefit both women and men.
About 70% of these jobs would be taken by women, however female and male employment rates meet in the long run, reaching an 80% employment rate by 2050.
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