Closing gender gap in workforce could double global growth rate says World Bank

Closing gender gap in workforce could double global growth rate says World Bank
Countries in the Europe and Central Asia region have a lower gender gap in the workplace than most world regions. / StartupStockPhotos via Pixabay
By Clare Nuttall in Glasgow March 8, 2024

Countries in the Europe and Central Asia (ECA) region have a lower gender gap in the workplace than most world regions, though they lag behind those of advanced OECD countries, according to the findings of a new World Bank Group report. 

This is part of the persistent worldwide gender gap in the workplace, which is holding back global growth. The development bank estimates that closing the gender gap could increase global GDP by over 20%, and double the global growth rate over the next 10 years. 

The report assesses the gender gap by examining obstacles that women face in entering the global workforce and contributing to greater prosperity. Across the ECA region – which broadly corresponds to the Central, Southeast and Eastern Europe and Central Asia regions – the score is relatively high partly thanks to the strong starting point during the socialist era, though it is also down to more recent reforms. 

Globally, the report reveals that the gender gap in the workplace is far wider than previously thought, the World Bank said in a press release. “When legal differences involving violence and childcare are taken into account, women enjoy fewer than two-thirds the rights of men. No country provides equal opportunity for women – not even the wealthiest economies,” the development bank said. 

The global average Women, Business and the Law score was 77.1 out of 100 in 2022, only half a point higher than in 2021.

Opportunities lost

World Bank economists point out that the barriers to women’s full participation in the workplace have negative consequences that go beyond individual women and their families. 

“Women have the power to turbocharge the sputtering global economy,” said Indermit Gill, chief economist of the World Bank Group and senior vice president for development economics. “Yet, all over the world, discriminatory laws and practices prevent women from working or starting businesses on an equal footing with men. Closing this gap could raise global gross domestic product by more than 20% – essentially doubling the global growth rate over the next decade – but reforms have slowed to a crawl."

“It is more urgent than ever to accelerate efforts to reform laws and enact public policies that empower women to work and start and grow businesses,” said Tea Trumbic, the report’s lead author. “Today, barely half of women participate in the global workforce, compared with nearly three out of every four men. This is not just unfair — it’s wasteful. Increasing women's economic participation is the key to amplifying their voices and shaping decisions that affect them directly. Countries simply cannot afford to sideline half of their population.”

Different trajectories 

“Economies with average scores above the global average of 77.1 tend to be in OECD high income, Europe and Central Asia, and Latin America and the Caribbean regions (figure ES.2). The Middle East and North Africa as well as South Asia have the lowest average scores,” said the report. 

Only 14 economies – of which only Latvia is from the post-socialist space – score 100 on the index, meaning that women are on an equal legal standing with men in all of the areas measured. However, nearly 90mn women of working age gained legal equality in the last decade, indicating some progress in the global fight for gender equality.

Around the world, women still have only three-quarters of the legal rights of men, and nearly 2.4bn women of working age still do not have the same legal rights as men, according to the World Bank. 

The majority of these women live in the regions of East Asia and the Pacific, accounting for approximately 710mn individuals, and South Asia, with around 610mn women facing such disparities. Sub-Saharan Africa follows with an estimated 330mn women encountering similar challenges.

The latest report expands the scope of its analysis, adding two critical indicators: safety from violence and access to childcare services. When those measures are included, women on average enjoy just 64% of the legal protections that men do, far fewer than the previous estimate of 77%.

The report notes that the OECD high-income economies – where the gender gap is the smallest – “have reached today’s score through continual reform efforts over decades”.

Strong starting point 

The picture is rather different in the post-socialist countries of Europe and Central Asia, says the World Bank report.  

“In the aftermath of the collapse of the Soviet Union, the initial focus of the newly independent republics was on the development of stable political and economic systems along with independent cultural identities separate from the decades of Soviet rule. Hence, legislating and enforcing gender equality were not an immediate priority for state officials, contributing to the reemergence of stereotypes about gender roles in the early 1990s,” according to the report. 

“By the same token, in 1990, Europe and Central Asia had a comparatively higher score (60.2) in the Women, Business and the Law index than other regions … This relatively high score could be attributed to the fact that the Soviet Union was known to have solid policies that allowed women to balance their roles as mothers and labour force participants. For example, a strong social welfare net consisting of state-sponsored childcare, food subsidies, communal dining halls, and health care was established to allow women to participate in the labour force and education system.” 

Later on, according to the World Bank, “In Europe and Central Asia, most reforms were undertaken in the 2000s across all economies (109 reforms).” 

Progress in 2023

Looking at progress in 2023 in regions around the world, governments were assertive in advancing three categories of legal equal-opportunity reforms – pay, parental rights and workplace protections. However, nearly all countries performed poorly in the two categories being tracked for the first time – access to childcare and women’s safety.

The weakness is greatest in women’s safety – where the global average score is just 36, meaning women enjoy barely a third of the needed legal protections against domestic violence, sexual harassment, child marriage and femicide. Similarly, most countries score poorly for childcare laws, hindering women's participation in the labour force.

On top of that, women face “significant obstacles” in other areas. When it comes to the entrepreneurship category, for instance, only one out of every five economies implements gender-sensitive standards for public procurement processes. Consequently, women are largely excluded from accessing a $10-trillion-a-year economic opportunity. 

Moreover, in terms of pay equity, women earn merely 77 cents for every dollar earned by men. This disparity persists into retirement, with discrepancies in the retirement ages between men and women in 62 economies. Despite women's longer life expectancy, factors such as lower wages during their careers, interruptions for caregiving responsibilities, and earlier retirement lead to reduced pension benefits and heightened financial vulnerability in their later years.