Bringing more women into the work force would be a boon to economy, report says.
Research has consistently shown that gender diversity in the workplace is good for business. A new study by the McKinsey Global Institute shows just how good.
Closing the gender gap in the United States would add at least $2.1 trillion to the gross domestic product by 2025, according to researchers. That would be like adding the equivalent of another state of Texas to the economy.
The study looked at 10 indicators, from the number of women who hold business leadership positions to the rates of teen pregnancy, women in politics and violence against women, which hinders earning potential. While the study found that the United States rated well in areas such as women’s participation in the workforce and higher education, it lagged behind in other areas. For instance, for every 100 women in leadership and managerial roles, there are 152 men and for every 100 women holding political office, there are 333 men.
McKinsey estimated eliminating the gender gap would actually add $4.3 trillion to the U.S. economy but scaled it back to $2.1 trillion to reflect a more realistic projection of progress, said Kweilin Ellingrud, a McKinsey partner and author of the study. Overall, that would mean an additional 6.4 million jobs nationwide.
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McKinsey, a global management consulting firm of more than 9,000 consultants and nearly 2,000 research and information professionals, estimated that more than a third of the expected GDP gain would come from increasing the number of working women. Currently about 57 percent of women are working compared to 69 percent of men.
Another third of the gain would come from reducing the gap between women and men working full time. Women now hold 42 percent of full-time jobs and 64 percent of part-time ones.
However, making these gains won’t be easy. The Bureau of Labor Statistics expects the percentage of women in prime working age – 25 to 54 – to drop slightly as more young women seek graduate and post graduate degrees and older ones leave the work force early.
While the impact of closing the gender gap would be felt nationwide, Silicon Valley would likely see particularly dramatic gains, according to McKinsey. The tech-heavy area would gain about $25 billion by 2025. The area has a gender parity score of .57 compared with San Francisco’s .69 and New York’s .61, the study showed.
To bring about change, McKinsey said organizations need to provide financial incentives and support, create economic opportunities and implement laws and policies to encourage more women to enter and stay in the workforce. The report noted how Google was able to reduce its rate of new mothers leaving by 50 percent after it increased its paid leave from 12 to 18 weeks.
