The Power of Parity: Closing the Gender Gap in the Workforce

Wednesday, March 20, 2019
A female employee works at a petrol station in Cairo, Egypt. February 24, 2016. Mohamed Abd El Ghany/REUTERS
Kweilin M. Ellingrud

Senior Partner, McKinsey & Company, Inc.

Kathryn C. Kaufman

Managing Director for Global Women's Issues, Overseas Private Investment Corporation

Jamille Bigio

Senior Fellow for Women and Foreign Policy, Council on Foreign Relations

The event explores innovative approaches by governments and the private sector to promote women’s participation in the global workforce. Kathryn Kaufman reflects on the U.S. government's new Women's Global Development and Prosperity Initiative, launched by the White House last month. She also shares opportunities and challenges for OPIC’s 2X Women’s Initiative, including its commitment to mobilize $1 billion for projects that will support lending to women-owned businesses, female entrepreneurs, and women-owned and women-led emerging market private equity funds, as well as OPIC's work to expand this effort to other development finance institutions through the G7 2X Challenge. Kweilin Ellingrud shares new research by McKinsey, both from the Power of Parity global research as well as the Women in the Workplace benchmarking from 2018 on how progress on gender diversity at work has stalled, and recommendations for companies to turn good intentions into concrete actions.

BIGIO: Hi, everybody, welcome. Welcome to the Council on Foreign Relations. My name is Jamille Bigio. I’m a senior fellow with the Council’s Women in Foreign Policy Program. Our program has worked with leading scholars for more than fifteen years to analyze how elevating the status of women and girls advances U.S. foreign policy objectives, including prosperity and stability. I want to take a moment before we begin to thank the Gates Foundation and our advisory council for their generous support of today’s discussion. I also want to remind everyone that the presentation, discussion, question and answer period will all be on the record.

We’re gathered today to look at the advantages that countries, companies, societies gain by closing the gender gap in the workforce. There are estimates that McKinsey Global Institute has produced that closing that gender gap in the workforce would add a staggering $28 trillion to the global GDP, in a best-case scenario, and $12 trillion in alternate, best in region scenario. But despite the potential gains from women’s economic participation there remains significant legal, structural, and cultural barriers still make it hard for women to work in the first place. Today we’ll look at the role of governments and the private sector in promoting women’s participation in the workforce, in helping to overcome some of these barriers, to help ensure that companies, societies, and countries all can benefit by being able to bring half the population into the economy.

We are joined by two speakers who will represent those two different perspectives and experiences. Katie Kaufman, who’s the managing director for global women’s issues at the U.S. Overseas Private Investment Corporation - the U.S.’s development finance institution. And Kweilin Ellingrud, who is the senior partner at McKinsey and Company, and leads McKinsey’s Closing the Global Gender Gap initiative.

Let’s start off on the research side. So, Kweilin, McKinsey has produced seminal research on why countries and corporations alike should focus on closing the gender gap in the workforce. Can you share what’s the latest? What do you see globally? What does that picture look like in the United States? And where do major corporations stand?

ELLINGRUD: Absolutely. I’m going to give you a quick tour of that, at all three levels—the global level, the U.S. level, and then the Fortune 500 level. What I won’t be covering today is actually some broader interesting work. For example, U.N. Foundation, Ryan and others, Bank of New York Mellon, have done other work not included here in terms of how do you accelerate investment in SDG number five in particular? So we won’t cover that. We also won’t cover work that is underway but will be released over the next couple works in terms of the future of work.

Trends like automation, how does that affect women versus men differently? How do we think about that by geographic cut, but industry cut, and how can companies and governments get ahead of those trends so we’re doing the right thing for employees? So that’s a broader set of research that stands outside of this, but what I’ll do is a very quick tour of the highlights of the research that McKinsey’s been investing in over the last fifteen years, both in terms of Power of Parity, which is more of that global view, and then Women in the Workplace, which is our partnership with the Wall Street Journal on more of a domestic Fortune 500 view.

Starting at that global level, as you mentioned, the economic opportunity is significant. And we took a look at 95 countries around the world, over 90 percent of women in the world, and we said: What would happen if women were to match men’s participation in the workplace much more equally? And what would happen is an economic opportunity of about $28 trillion. That’s the size of the economies of the U.S. and China put together. It’s a staggering number. But frankly, it’s not a realistic number, and certainly not in the near future are we going to be achieving that—like, truly closing the full gap. And so we took a look at what would be a more realistic achievable number over the next ten years? And that gets us to about 40 percent of the opportunity, or $12 trillion.

That’s the economies of the U.K., Germany and Japan put together, so significant GDP growth. About 11 percent over the next ten years. And the way we got to that is we looked historically region by region and we said: What has empirically happened? So what is the fastest rate of improvement in terms of gender equality elements in Western Europe? So what if all countries in Western Europe were to match the best rate of improvement in Spain? What if all countries in South America were to match the best rate of improvement, which happens to be in Argentina? That is what would result $12 trillion in economic growth. And that comes from three sources.

Sixty percent of it is just more women working who aren’t currently working in the workplace. Another 20 percent of it is from part time versus full time mix. So women around the world have the majority of part-time jobs and the minority of full-time jobs. If that were to be more equal across the genders, that would drive about 20 percent of it. And the last 20 percent is from sector mix. So women tend to be concentrated in lower average output per employees sectors around the world—services sectors, less manufacturing, less engineering sectors. And if that were to be more equalized, that would drive the final 20 percent.

So that’s the economic opportunity. But that’s only half of the story. We looked also at the societal gaps around the world. And what we show here, and I’ll get into exactly what this is, is that no country can really capture their share of that $12 trillion we were just talking about unless they tackle the societal gaps that are holding women back on a global basis. So what you see here on the Y-axis is equality in work. Basically, what share of that $12 trillion that we just talked about has your country captured. And every dot, square, triangle on this page is a different country, so those 95 countries I was describing earlier.

You can see the legend here based on GDP per capita. And then on the X-axis we have gender equality and society. So to what extent can women vote, own property, drive without asking permission from a spouse or a father? Are they equal in school attainment? Do they have equal access to financial services and other elements? Are they equal in leadership roles, in political representation? All of those elements are kind of combined together on the X-axis. And what you see is an R squared of over 50 percent which, you know, while it’s not 90 percent-plus, it’s still pretty high given this is a global view. So more than 50 percent of your share of that $12 trillion is explained by how much you tackle these societal gaps.

So that was—it’s not just a big economic opportunity. It’s tied to how much you tackle these societal gaps. And the last thing we did on a global basis, before we take a look at the U.S. level, is look at what we call impact zones. And an impact zone is a combination of a country or a region with a particular issue. And we found five global impact zones and five regional impact zones. And the global impact zones are challenges where, frankly, no country, no region around the world has figured it out. It is bad pretty much everywhere. Now, can debate less bad in some areas—for example, fewer legal rights and, you know, worse in others. But really, there’s not equality anywhere in the world across these elements. And we’ll talk a bit more about these in a moment.

The regional impact zones are much more concentrated in specific regions. And the great news about this is that we expect as GDP per capita increases around the world that you will grow you way out of these impact zones, which is really encouraging. Now, countries and regions can do more to accelerate their growing out of these impact zones or these challenges, but we fully do expect these to go away over time as GDP per capita rises.

So things like unequal educational levels in India, South Asia, and Sub-Saharan Africa, or maternal mortality challenges in Sub-Saharan Africa. Those are all issues that we should grow our way out of over time. So that’s a quick global scan. It’s a big economic opportunity. It’s linked to the societal gaps. And some of those gaps we will grow our way out of. Frankly, a bunch of them we won’t grow our way out of. So we need to really get after those global ones.

Let me take that down now to the U.S. level. And after the broader Power of Parity was published a number of years ago, we’ve done a number of deep dives in the U.K., in Canada, across Asia, in India in particular as well. And this is the U.S. deep dive that we’ve done. Now, you remember that $12 trillion overall on a global level? The U.S. share of that is $2 trillion. That’s the economy of the size of the state of Texas. It’s just shy of the economy of Canada.

And our share of where that $2 trillion comes from, it’s also 10 percent of our GDP, so pretty significant. One percent GDP growth per year, which given current growth rates is—(laughs)—quite a bit. But our mix of where that comes from is a little bit different than that global mix. So you’ll remember, it was 60/20/20. Here in the U.S., we actually have more women working than the global average, so our share is a little bit lower from participation, and it’s 40/30/30. So forty percent of our 2 trillion (dollars) is from workforce participation. Thirty percent of it from that part time/full time mix. And 30 percent from sector mix.

Similarly in the U.S., we link that economic opportunity, that $2 trillion, to the societal gaps. And the societal gaps where we both see the biggest challenge but also a lot of variability across states are these six impact zones here in the United States. And you’ll remember, many of these are highly overlapping with the global impact zones that we saw just now on the global level. The first is representation in leadership and managerial positions. We’ll talk a bit more about this in a Fortune 500 context, so I’ll save most of it for that. But for every hundred men in managerial positions, we have about sixty-six women.

Time spent in unpaid care work. Around the world, women do three times more unpaid care work as men. In some countries, like India, that’s nine or ten times as much unpaid care work as men. Here in the U.S., it’s about two times as much. And I’m the mother of three daughters, so I thought, well, I want more unpaid care work. I want more time with my daughters. But it turns out, only about 15 percent of that unpaid care work time is time with your kids. Eighty-five percent of it is shopping, cooking, cleaning. It’s all the stuff that if we were either to eliminate or share more equally with partners, none of us would miss. And that is one of the barriers for more women getting into the workplace.

Single mothers. This is one of the ones that is unique both to the U.S. and a couple of other regions. You know, and in this day in age women in the United States, as well as in Europe, are sometimes, you know, single mothers by choice. That’s not what we’re talking about here. What we’re talking about here is the fact that 60 percent of families in poverty in this country are led by a single mother. And that’s intergenerational cycle of poverty, where the mother can’t finish either high school or college and get the job that she needs to provide for her children. There’s a number of interesting organizations, Jerimiah Project, there’s a number of others, who address this both by coaching the mother to get the job and the right job training, as well as the child. And they’re seeing good, early success.

It’s linked to the fourth impact zone, which is teenage pregnancy. Of all of the impact zones we looked at, this is the one that gave us the most hope, and we’ve certainly seen the most improvement over the last ten to fifteen years. It comes from—well, first, I think the facts are 600,000 girls between fifteen and nineteen every single years in the U.S. get pregnant. That’s not even counting the girls at twenty, twenty-one, twenty-two who get pregnant too early and can’t finish what their original plans were in terms of school or getting a job. But the improvement that we’ve seen comes from two sources. The first is MTV Teen Moms. If anybody saw the reality TV show in the ’80s, I certainly grew up watching certain episodes of it, but it basically traces teenage mothers in high school, typically with a deadbeat boyfriend, and gives you a real live sense of what it feels like to have a kid.

And when it first came out, there was an uproar. People were upset. And they said, how can you glamorize being a teenage mother? We’re going to see huge spikes in teenage motherhood. Well, it turns out that you can do the closest thing to a scientific experiment with MTV Teen Moms. So you show it some states, you don’t show it others. And then you just monitor the Google search results. And what you get is a whole bunch of, oh my gosh, how do I avoid getting pregnant? How do I get birth control? And so MTV Teen Moms has driven about a third of the drop in teenage pregnancy here in the United States, which is incredible.

The other two-thirds of it is long-acting birth control available day-of. And they’ve done both research and work in Colorado, which is where it started, and they’ve now expanded that to the state of Delaware. And organizations like Upstream are taking this nationally across Georgia, the state of Washington. And it’s basically making available long-acting birth control that same day. So patches, injections, IUDs, et cetera, because it turns out when you depend on teenagers to either remember to take the pill every day, or condoms, or other methods, it’s just not dependable and it doesn’t really work.

The last two: Political representation. And this data was from before the most recent election in the United States, so I think we’ve seen a big jump even in the last year or so. But what we see across the board is for every hundred men at a national office—so, governor, senator, congressman—there are thirty women, which is a huge gap.

And what we know about women in politics is two main things. One, and I think we saw this in an Amy Klobuchar recent quote, women are much less likely to come to politics because they thought they would be a politician their own life, right? Men are much more likely to say: Since I was young boy, I always thought I would be a politician. Women come to politics, number one, much later, and typically for a very specific cause. So I want to change health care, because this was my experience. Or, I want to change safety for kids, because this is my life. And so that is quite different in terms of the age and the reason why they come into politics.

And the second big difference is when women and men lose elections they react differently. So the encouraging news is that when men and women run in politics, they win and lose the first time around at the same rates, which I was deeply encouraged by. But what’s different is that men are much more likely to pick themselves up from that very public humiliation of a loss and run again. And if you think about most of the leaders on a national stage right now, most of them have lost as least one election at some point. And so how do we change the reaction to that loss and encourage more women to run again and take what they’ve learned?

The last one is violence against women. And across the board, the United States was in the top quartile on almost every factor in terms of gender equality. Violence against women was at the global average, which is an abysmal average. One in three women around the world experience violence from an intimate partner. That’s not even counting people that you don’t know or acquaintances. If you add all the different types of sexual violence together, one in two women experience sexual violence here in the United States, which is—you know, we’ve got a long way to go.

And so as we looked around the world at who does this better than us, actually our neighbors to the north, Canada, does a great job on this. So only 6 percent of women in Canada experience violence from an intimate partner. And there’s two main differences. One, the police are much more likely to treat this as a public safety issue. It’s not a personal issue. It’s not a private issue. This is a public safety issue, and we will intervene if needed. And then, second, once it happens the court system is much more lined up to help that victim, or potential victim, through the process much more quickly.

So what we know about violence against women is it’s typically accompanied with other challenges. So purposefully ruining the woman’s credit so she can’t rent an apartment and be independent and get out on her own. And all of these other elements pile up and make it very, very difficult to break free, even if you want to. The state of New York, actually, is probably the best example in the United States of streamlining that court process to be more like Canada and other countries, so that you can actually get through it in a reasonable amount of time.

So that is the U.S. level in this quick tour. I want to now take it down to the company level. What do we know about diversity in Fortune 500 companies, what’s the case for diversity overall? So we’ve looked globally. And what we see across industries is that gender-diverse companies—so, companies in that top quartile of gender diversity—are 21 percent more likely to out-perform their peers on an EBIT basis. And if you are ethnically diverse, interestingly, you are even more likely to out-perform—so, 33 percent more likely to out-perform your peers. Now, you can’t make a scientific experiment of this, because you can’t put companies through a double-blind scientific test in any way. So correlation is the best we’ve got. We don’t have causation, per se. But in a highly competitive industry, like we’ve got, and highly competitive markets, I’ll take causation any day.

Now, this is the last piece of what I wanted to share, which is part of our collaboration with Women in the Workplace, and Lean In, and the Wall Street Journal. And so we surveyed over two hundred companies around the United States and North America broadly. And this pipeline is basically the typical average pipeline that you see across Fortune 500 companies. If you look at the bottom of the page, 47 percent of that entry level is women. It drops down to about one in five at the SVP level and the C-suite.

And you might look at that 47 percent and think, oh, pretty good. Almost to parity. But do keep in mind that here in the United States 57 percent of college degree go to women today. It’s the majority of valedictorians, higher average GPAs, and 57 percent of college degrees. Also, the majority of master’s degrees and Ph.Ds. So if Fortune 500 companies were getting their fair share of the talent that they’re recruiting from, there’s no reason why that 47 percent shouldn’t be more than 50 (percent).

Two other kind of takeaways from this. We did, over the last couple years, cut this by race for the first time. And so what you’ll see on the sort of next line above that, starting at 17 percent women of color—which in our definition is black, Latina, and Asian all added together—are 17 percent of that entry-level pipeline. It drops dramatically down to 3 percent in the C-suite. And when we first saw this data we thought, that can’t be true. And we kept adding the data back up and checked it multiple, multiple times. It is truly 3 percent of the C-suite in the United States is Black, Latina, and Asian, all added together, women. The men of color start at 16 percent, and then drop down to about 12 percent.

A couple notes on this before we wrap it up. One, you know, one of the early hypotheses that actually a number of men shared was, well, it’s just—and we were talking about this earlier—it’s just that women are voting with their feet. They’re leaving the workplace and they’re going to take care of their children because that’s what they want to do. No. They are not leaving the workplace. So we did this survey across literally tens of thousands of employees. And men and women are wanting to leave the workplace at the same rate. And when they do, at roughly the same rate, they’re doing that to take care of children. What’s actually happening is women are stagnating in role and they’re staying in the pipeline, but they’re staying at each level for a longer period of time. So by the time they get promoted, they have a couple more years of experience in that role than their male peers.

A couple other things. At this first level, this 47 percent to 37 percent jump, that drop—that ten-percentage point drop, after that extensive other drop at that first promotion level, there’s almost nothing you can do to make up that ground in the rest of the talent pipeline. Now, there’s levers that we can pull to make it less bad, and less uneven, but we can never make it equal after that first drop. So women, overall, are 20 percent less likely to get that first promotion to manager. And Black women are 40 percent less likely to get that first promotion. We need to fix that as the biggest choke point in this talent pipeline.

Five other observations about this before I hand it over. One is, this 20 percent in the C-suite—right, so C-suite would be direct reports to a CEO. Even that belies a bit of a power balance, because women are much more likely in many of these C-suites to have staff roles versus line roles. So they’re much more likely to be the head of HR, head of IT, CFO, versus run the biggest business unit. And if you look at S&P 500 CEOs who are promoted from within, they are almost always—literally 99 or 100 percent of the time—promoted from running the biggest business unit or the number-two business unit into that CEO role, right? You never promote your head of HR into the CEO role, or almost never. And so if we want to budget that 5 percent of S&P 500 CEOs that are women back up to the 6 percent where it was at one point, but anywhere, you know, past that, we’re going to have to shift that balance of power in terms of staff roles versus line roles in the SVP and C-suite.

The other thing we found was that feedback is uneven by gender. So when we asked managers and also employees: Do you get regular, tough feedback? Women were much more likely to say no. And their managers corroborated this. And when we said why? The managers, both men and women, would say: I don’t want to appear mean and I’m afraid of tears. And these are real reactions from managers, but you compound that across a woman’s career and if I’m not getting the real feedback of, like, Kweilin, this is what you need to learn the business, and to run the business, I’m not going to be able to grow at the same rate. And so we need that honest feedback, that tough feedback over time.

We also looked at what we called substantive exposure. And substantive exposure is a meeting where we’re presenting to each other, we’re having a dialogue—not, you know, some senior person’s presenting to me. And I thought, well, wouldn’t women, especially at the tail end of this funnel where it’s so uneven, wouldn’t our few women who are there get amazing opportunities, because there’s so darn few of them? It turns out, no. So there is a gap in terms of substantive interaction at the mid-level. At senior manager versus director level there’s about a ten-percentage point gap between men and women who get substantive interaction. And that gap actually widens at the more senior levels to about 20 percent. The hypothesis is it’s tied to the staff roles versus line roles, and who’s actually driving critical projects in critical businesses. But that substantive interaction is really difficult, because if you don’t see me in a real every day, every week interaction, you won’t be able to judge if I’m ready to grow into the next role or not.

Last year—or, this year’s results we added two elements, one being an only. So, being an only woman in a room of men, or being the only back person in a group of white people. As well as what we call microaggressions. And a microaggression is often unintentionally, sometimes intentionally, but it’s small things that add up. So questioning your expertise in your particular area or field. It’s mistaking you for a much more junior person or asking you to get the copies or water for the group. Small things, but things that certainly add up. And the two insights we found around onlys was that, number one, onlys wanted to aspire to get promoted at a higher rate than people who were in a group that was more homogenous and more diverse. But they also thought about leaving much more frequently, both in the near term and in the long term, because it was very difficult to kind of sustain this being an only and being high observed in that environment.

On the microaggressions, and we saw this pattern pretty much across the board, women overall were much more likely to experience these microaggressions. And if you breakdown women overall, white women were closer to men overall, and then you see a pretty dramatic jump—Latina, Asian—well, Asian, and then followed by Latina, and then black and lesbian women were most likely to experience microaggressions on a very—a pretty regular basis. And that’s pretty much the pattern that we see across most questions that we ask around do you think promotions are fair? Do the right opportunities go to the most deserving people? We see that pattern of white women closest to men—although, there’s still a pretty big gap—followed by Asian, Latina, black and lesbian or lesbian and black.

And then the last thing I’ll say is there is a double shift. So even for women at the more senior level, at the SVP and C-suite, this double shift of working and then going home and taking care of everything else is true. So we looked at the data. And actually women, 54 percent of women are likely to do either most of or all of the housework, versus only about 22 percent of men who are working. And this is true even if you are the primary breadwinner. So we asked only primary breadwinners, who made the majority of money in their family: Do you continue to do all or most of the housework? Twelve percent of the men said yes, and 43 percent of the women said yes.

So likely, even—you know, the few women who are at that SVP and C-suite level, 43 percent of them on average continue to do all or most of the housework as well. So that double burden is quite real.

So those are the highlights. Happy to share more later. But thanks.

BIGIO: Thank you, Kweilin. Incredibly helpful to see the research and data at each of those levels. And I wanted to just share quickly, we have in fact worked with McKinsey Global Institute to help bring the Power of Parity research to decisionmakers. We’ve created an interactive that—for example, breaks down the 28 trillion (dollar) number by region and by number, so you can go in and actually explore down to region and country level what gains can be realized when women participate more. You can compare between countries on this interactive. You can also then look at the gender parity data that Kweilin mentioned of measuring where women stand when it comes to gender parity at work, and physical security, legal protection, and political voice, and essential services. And you can select by any of the nearly a hundred countries that were in the dataset and see by country what this means.

We’ve created another interactive that digs into the legal barriers aspect of how laws on the books make it harder for women to work in the first place. The Women’s Workplace Equality Index, which is the first index to actually rank countries based on the legal equality for women when it comes to the workplace. And this uses the World Bank’s Women, Business and the Law dataset. You can see from here, we’ve highlighted the top ten, bottom ten countries. But you can dig in and actually see by country where are the barriers—what areas, and what specific laws are an issue. And I will note that the World Bank’s dataset compiles this by the largest commercial city in a country. You’ll see it in the U.S. too, where our situation is determined using New York as an example.

And we show, for example, that over a hundred countries have at least one law that restricts the kinds of jobs that women can hold. They can’t drive a truck, they can’t work the night shift—making it illegal for women to even work that job in the first place. Another example, nearly sixty countries don’t have any legal protections against sexual harassment in the workplace. So if you see with the #MeToo movement, how hard it is to even protect women in the workplace when they have the laws there to begin with. These interactives are meant to help bring the data to bear for decision makers, so they can actually see as they’re creating their policies for a given region or a country, what this all means in practice.

And there, we see that Katie Kaufman at OPIC has been leading some incredible work building off of this research to make the case for OPIC to transform what kind of investments that it’s making in women-owned businesses. So, Katie, we’d love to hear from you about what is happening at OPIC now. How have you mobilized this new lending? What have the road bumps been? And what do you see as the steps moving forward?

KAUFMAN: All right. I first want to just say thank you so much to Council on Foreign Relations for hosting this lunch. It’s fantastic. The group of people assembled here, I’m most excited for the Q&A period, so I’m going to try to get through my comments quickly to hear from all of you. But I also just want to quickly comment on Jamille -- I work in Washington, D.C., to have the level of intellect with this amount of humility and graciousness is very rare. I’m delighted to be a colleague. And also, one of the reasons we have deployed our women’s empowerment at OPIC is because of the work of McKinsey. And it’s just such an honor to be here and hear that they’re continuing to push these amazing statistics. Men may be afraid of tears in the workplace. I’m about to break into them after hearing that. (Laughter.) But I’m hoping that what I can tell you about OPIC’s story is going to give you an element of hope and progress, at least where finance is concerned.

So just to frame my comments a little bit, I just want to make sure that everyone knows what OPIC is. It’s not an oil cartel. (Laughter.) We are the United States development finance institution. Our mission is to invest to support private sector growth in emerging markets. The private sector creates nine out of ten jobs in emerging markets, and we want to give people the dignity of work. And we do that through investments which we expect to spur economic prosperity and foster global stability.

OPIC has been around since 1971 with this mission, but we only this year realized that women are actually the key to both growth and stability. So it took us a little while, but we got there. We launched “2X”. We branded it as 2X to, OK, slight nod to the female chromosome, but mostly to represent that multiplier effect of investing in women. When women earn a competitive income, they reinvest 90 percent of that back into their families. And, by comparison, men reinvest about 30 percent. So, again, when we’re looking to foster stability, we’re seeing that the most effective way to do that is through women.

All of the statistics that Kweilin and McKinsey has put forward show the full spectrum of growth that can be realized with investing in women.  I was hired last year to launch a women’s initiative. And we didn’t really know what that would mean. Frankly, my background is not in gender at all. I was a partner in a venture capital firm and before that worked for Secretary Gates on U.S.-China defense relations.  I thought that a Women’s Initiative at OPIC would mean investing in women-owned companies. We decided OPIC would launch a billion-dollar commitment, which would be the U.S. government’s largest financing commitment, to women in emerging markets.

Initially, 2X was a $1 billion dollar commitment to women-owned businesses.  And that was really an exercise of counting how many women can we invest in. And we launched this. We told the media we were doing it. We were very excited about it. And then we went back to our previous years—so 2017’s investment portfolio. And of 137 projects that we underwrote in 2017, how many do you think would have met that criteria? Four. OK, so then we were became very nervous that we were not going to meet this. So let’s do the Washington thing and not put a timeline on it, which is what we did. (Laughter.) But then we really dug into it as a financial institution. And OPIC is a group of investment bankers. They are the most—completely unbiased opinion—the most talented people in Washington. And we got training in gender-lens investing.

We started understanding what is the value of understanding gender patterns, and might those gender patterns have an impact on financial performance? So we started digging into things like, OK, we’re investing in the largest agriculture production of flowers in Africa, for example. And we know that women make up 80 percent of the workforce in agriculture. What kind of gender pattern can we tease out of this to get to a better investment decision? So for example, we are now asking our private sector clients from a financial fiduciary standpoint: Tell us about your workforce. Are all your base employees women and are all your management men? And you won’t be surprised at that answer. It is always the case that the lowest-paid employees are women and the higher paid employees are men.

And for us, that’s a financial risk. It’s a financial risk not only because you’re not attracting and retaining the best talent or strong worker satisfaction, but it’s also a safety risk. There are power dynamics included there that we know result in gender-based violence, harassment in the workplace. We don’t have to look farther than the #MeToo movement here in the United States. A law did not have to pass for that to become a financial risk for companies. Women just got fed-up. And we don’t want to take that risk.

So from a financial standpoint, we’re getting trained at OPIC to understand these gender patterns, and work with our private sector clients to remedy that. And this is—this is something that we’re deploying across our portfolio. So where we started with OPIC is going to invest a billion dollars in women-owned company, we shifted—well, I should celebrate the fact that we launched that last year. And because we have been every single piece of our agency is so committed to this, and we’ve been promoting it so much, we just underwrote $1.4 billion to women-owned, women-led, and women-supporting enterprises in a year. So I’m super proud about that.

But we’ve now shifted to say: If we’re underwriting microfinance or if we’re building a toll road, gender is material. It matters. And we’re going to push—we’re going to use systems of finance to create gender-equitable change. So as we were talking about the society change—there’s legal barriers, there’s cultural barriers, and there are different levers that we can use to change all of those. OPIC is one tool. We’re a system of finance. And we are completely committed to using that as a tool for gender-equitable change.

So I wanted to touch on three things. First, we were counting women. Super important. It’s so important for us to say we could only invest in four, and now we’re growing that. So the counting exercise cannot be undervalued. Two, we’re moving from counting to valuing women. So it’s not just about how many women are there, it’s how do we value women as leaders, value them as members of the workforce, and value them as consumers, and members of society from a financial perspective? And then the last thing that I want to mention is the mirror.

When I pitched to OPIC’s board—a sixteen-person board—that we would be launching a women’s economic empowerment initiative, it was met with a loud applause, which is not normal for a board meeting. People were so excited. It was an all-male board, with one woman rolling off. And you know, our job, at 2X, is now to say to companies in El Salvador: We expect you to have 30 percent board representation. (Laughter.) Well, here I am in Washington, D.C. You know, you just can’t do that. You have to be able to hold that mirror up to yourself.

And we have found for us, and we are pushing our private sector clients to do the same, we will be the first U.S. government agency to get EDGE certified. For those of you who are not familiar with EDGE, it’s an internationally recognized standard, like LEED certification for a building. But EDGE is about equality in an enterprise. It looks at every policy, it looks at your culture, it talks to almost every employee that’s willing to participate. And then it gives you a roadmap to be sure that you have a gender equitable workplace.

And I just want to emphasize the word “equitable.” Women are not looking for a leg up. We literally want a level playing field. And that’s what EDGE certification helps an enterprise do. I wish I got commission for anytime I got them a new client—(laughter)—because it’s very economical to do it, an it’s the best way to put your money where your mouth is. For example, McKinsey, you should get EDGE certified, if you’re not. (Laughter.) I say it to everyone that we meet with because I think it’s the best way to bring down the systematic barriers and the unconscious bias issues that we face.

So those are the three things I wanted to mention. Thank you so much.

BIGIO: That’s wonderful. Thank you.

So we’ll now open it up to questions from the audience. So please raise your placard and introduce yourself with your question. Please.

Q: Mariam Safi. I’m currently doing the CFR international affairs fellowship, but formerly was at the State Department, Foreign Service.

So one of the issues—you know, I think this kind of—it crosses sectors in terms of, you know, the retention of women and women of color in particular at sort of the higher levels. And, you know, I think the State Department’s looking at, you know, taking, you know, sort of steps towards mitigating unconscious bias. What are some of the tactical—one idea that’s been floating around, and I think another agency experimented with, was blind review in the performance sort of review process, of just basically deleting gender pronouns, which would also—and names. So, like, for ethnically identifiably names, for example. If any of you have any thoughts on that, I guess.

ELLINGRUD: I’ll share a couple thoughts, and then others please jump in.

So I have mixed thoughts on that. I think it can be helpful. But at some point, that interviewee is going to meet a human being. And we need to address both the conscious and the unconscious bias, and all of the pattern recognition that that person may have in their head that may be unfounded. We have the same problem when we use advanced analytics to do recruiting selection based on historical patterns that also have had bias embedded. So I think it can help a bit, but I would be wary of thinking that it’s going to be the majority of the solution or certainly—not even close to all the solution.

And I’m sure many of you have seen some of the research on resumes, right? If I have John Doe and Jane Doe, literally identity resumes down to the font type, font size, and so I’m seeing a lot of nodding. You’ve certainly seen both women and men—or, men and women—will ascribe much greater both leadership and potential to the male resume, this identical resume. And should that woman put active PTA member on that resume—again, otherwise identical—87 percent less likely to get called in for an interview. And if we have John Doe and Jamal Joe, that’s worth eight years of experience, 50 percent less likely. And John Doe and Mohammad Doe is, I think, three or four times less likely to get called in.

So you can do scientific experiments with these identical resumes. And even in this day of age, when we say we care about diversity and getting the best talent, we clearly are not. And so just systematically addressing the unconscious bias and conscious bias issues through those means, but frankly a whole bunch of others, is going to be key.

BIGIO: Thank you. Let’s make our way down the line, please. Yes.

Q: Hi. Is it on?


Q: I’m Anju. I lead gender measurement at UNICEF.

So congratulations. It’s so nice to hear sort of both sides of the research and the practice that is really moving us forward. And I just wanted to raise two issues. One is this whole issue of the focus on the tactical versus the structural. So a lot of the things that, Kweilin, you presented, are structural. And some of the changes, Katheryn, that you are trying to bring are very structural, be investing in particular kinds of businesses. But and I think that perhaps the next step is to not just go in women-led businesses, but businesses that actually serve and advance women’s interests in substantial ways.

So one area of work that I saw missing from both of your conversations is paid care work. So you talked a little bit about occupational sex segregation. And one of the areas that we’re working on right now at UNICEF, and that, you know, in the last two to three years I’ve been giving greater visibility to, we know that women do a lot of paid and semi-paid work, care work, take child care, primary school teaching, health work. And it’s interesting how the dynamics of that work change as it becomes better paid and more professionalized. So take nursing in the U.S., for example. All of a sudden it’s better paid, and we see more male nurses. And the power dynamic and the pay starts shifting. So it would be really important to bring that factor into—I saw, you know, the six factors that you laid out. In fact, I think paid care work, informal work, would be actually a very important area to put into it.

And then the second is I think generational change. So most structural change happens—I mean, whatever policies we put in, whatever investments we made, the gainers of that will be people ten years from now, as things really start to change. And I sometimes worry about the focus on tactical things like microaggression, for example, because it creates an entire buzz around things that, you know, even in the #MeToo Movement, we’re now starting to call out a lot of very small things that may make a difference but forgetting how some very egregious violations of rights and sexual abuse and harassment are being now created with fairly small aggressions. And they’re not the same thing. There are violations that are very huge. And I work in countries where, you know, we’re not talking about somebody saying the wrong thing or talking to you the wrong way, but systematic abuse.

So we do need to think about how do we prevent those opportunities, that type of power imbalance? And I think that is working with our young people today. It is working with the next generation. And I’d love to hear your thoughts on that.

KAUFMAN: Could I comment quickly on your first point? I didn’t spend too much time dwelling on this, even though it is my true passion and what I spend most of my time on at 2X, is the definition of what qualifies to be a 2X investment. And that is women-owned, women-led, and women-supporting. And I think that’s what you were alluding to in your last point, is the women-supporting. So for us that’s investing in clean water—access to clean water, access to affordable energy, providing access to credit. Things like that are things that we also are using our investments to improve the lives of women through those things.

And the reason the definitional piece is so important to hopefully me personally and then globally—we created this definition at OPIC. We then went to the G-7, our sister G-7 development finance institutions, and we together joined the 2X Challenge, which was a $3 billion commitment to invest against that criteria. And we spent six months creating evidence-based criteria for women-owned, women-led, and women-supporting enterprises. And the reason this criteria and this definitional piece is so important is so that we can have a harmonized view on what it means to invest in women, not for governments but for our private-sector partners.

So I think your point is absolutely on target, and it is not lost on us at OPIC at least.

BIGIO: Yeah. Please, here.

Q: I’m Ellen Chesler from the Roosevelt Institute and a longtime member of the Women and Foreign Policy Program. In fact, one of the first—when I worked with George Soros—people to give grant to start the program, so I’m thrilled to be here and particularly thrilled to hear two such upbeat and optimistic and well-shaped and articulate—(laughter)—presentations.

I think as somebody who’s been around the women and development world since the 1970s when it really began, you know, I couldn’t welcome more of the OPICs and the McKinseys and the World Banks to the table because I think we’re at a transformational moment. Having said that, I do want to pose the following concern, which—and ask both of you to comment on it.

We are at a—you know, a deeply significant point in global economic development because of the huge growth of population under the age of twenty-five, and particularly in the most vulnerable parts of the world like the MENA region. We have huge unemployment. You may have seen the Times today, a column to that effect, about 30 percent rates of unemployment in that demographic group in places like Jordan. So adding women to the mix is particularly complicated because there is, obviously, a resistance in the view that we don’t have enough jobs for men, so how are we going to grow the economy by adding more women? So I’d like you to comment on that sort of larger demographic picture.

But also, in asking you to do that, I want to point out that Kweilin’s comments that so beautifully showed the intersection between economic development and other public policy initiatives like investment in LARCs needs, I think, a little bit of underlining of the public policy aspect of that change. We have long-acting reproductive contraception in this country because Obamacare mandates that it be paid for by public health insurance. Without that mandate, we wouldn’t have it. I mean, the experiments were wonderful in the Midwest and now in places like on the East Coast particularly Baltimore, but we need something to pay for that. So you have to have public polices that support that. Similarly, I worry that investments in OPIC will be canceled out by cancellation of investments in population policies and reproductive health and rights polices elsewhere in the world.

So I mean, I hate to be the skunk at the table here. I want positive news. But I’d like you to comment about the larger economic picture and how dire it is, particularly in the most vulnerable regions, and what that means for accomplishing these gains.

ELLINGRUD: Thank you for bringing that. I’ll share a couple of quick thoughts.

We would agree in some of these—in MENA, for example, actually, we’ve got—McKinsey Social Initiative has a global effort on youth employment and how to connect much more deeply with companies that have real growth in employment needs but aren’t getting them met in the right ways. And so how do you deepen that connection for, frankly, just more efficient employment across all age groups, but particularly youth? So I think that’s a really critical issue.

What we looked at was country by country—and even in the U.S. state by state, city by city, but around the world we did the same thing—and looked at how many women have attained a graduate degree, a college degree, a high school degree, or don’t have a degree who are ready to work and fill some of these jobs. And then, to your broader point, what is the government investment and the broader policy required to invest in industries, across industries to create some of this job growth? Because it can’t be a zero-sum game where you’re just taking from one group and giving to another; it has to be a true economic growth platform where we’re investing in creating more jobs. And the talent is there to do that. I mean, we have one of the lowest unemployment rates in a long time, so it’s a little bit different for us than what you’re describing in MENA.

KAUFMAN: I guess for my note of optimism, we’re absolutely committed to women’s health at OPIC. We’re about to launch a 2X health bond which will focus on maternal health and really giving women access to the type of care that they need, the type of quality care that they need. Obviously, we have constraints because we’re U.S. government on what we can and cannot fund. I’m not going to go into that. But I do want you to know that I think from a broader interagency perspective women’s health remains at the forefront of where we think investments need to be made, and we will continue to do that.

BIGIO: If you could keep your questions short, we’ll try to bring in a few more—

Q: Absolutely.

Question for each, although Katie may have answered my question in large part already. Kweilin, on your twenty-eight trillion/twelve trillion numbers, when you show parity on full-time work/part-time work, things like that, what are the assumptions behind that to—that really ground those numbers? Because I’m assuming you’re not bringing men down to women; I’m assuming you’re bringing women up to men, which then does bring in the question you just raised of you can’t be kicking the men out to get the women up there. So how are you increasing—because there will not be infinitely expanding jobs—how are you increasing jobs?

And then, for Katie, precisely because U.N., IFC—I think IFC potentially better than the U.N., although they do great stuff on global women’s work. You did say you worked with your G-7 colleagues, but I think your learnings, you know, much as there are sustainability principles that are used in all private investment projects, it would be great if—to know that you guys were sharing with other private investment agencies around the world, and it sounds like you may be doing that with G-7.

ELLINGRUD: So on your first point, absolutely, and we have a whole ‘nother paper that breaks it down by country, by industry of the investment required to create the job growth. So it is bringing women up to men’s participation levels or full-time mix, and then the investment required to create that.

Q: And it’s not implausible.

ELLINGRUD: No, it’s a—it’s a realistic—it’s a doable number.

Q: Got you.

KAUFMAN: So in terms of sharing our findings, one of the reasons that we joined with the G-7 was exactly that, to demonstrate that this can be done and bring others with us. So we went from the billion-dollar target at OPIC to the $3 billion target globally. One of the reasons we were able to convince our G-7 counterparts to come with us is because we now had the real practice of saying we don’t have a pipeline problem; we have a bias problem. So we can demonstrate that because we’ve already underwrote over 1.4 billion (dollars), and please come with us.

And then the second piece on that is we are asking, we are looking at the next G-7 to go to pension funds, bulge-bracket banks, sovereign wealth funds to get a match, again, because we have already demonstrated. Not only are we—to be very clear, we’re commercial investors. We are not lowering our IRRs. We are not compromising our due diligence process. We are simply adding an extra layer that says you can actually expect better performance—although we don’t say that—but yeah, so it’s all doable.

Q: Excellent.

KAUFMAN: We are very interested in sharing and bringing more folks into the fold.

Q: OK. Great.

BIGIO: We have time for one more quick question.

Q: I don’t know if this works. Masuda Sultan, entrepreneur and women’s rights activist.

I actually wanted to ask you, Kathryn, if there were any particular business models that you saw as very successful. I know you’ve just recently made these investments, so it might take some time to figure out what worked best. But if there’s anything really scalable that you see, particular regions that you think could make real success stories, number one. Number two is any projects on financial inclusion in the private sector that make you excited.

KAUFMAN: Yeah. So on the financial inclusion side, if you looked at the OPIC portfolio, that’s our second-largest sector, so we do a lot with commercial banks. So we’ll provide loan guarantees or direct loans to commercial banks so that they can then on-lend to SMEs in their market. And what we’ve done there is rather than having a one-off so that we’re saying: OK, here’s 200 million (dollars), invest 30 percent or please on-lend 30 percent to women and then it’s done, we’re trying to actually change the way these commercial institutions and the markets do business. So, yes, we’re providing the hundred to 200 million (dollars), and then we’re saying 30 percent of this must go to female borrowers—and, by the way, we’re going to decrease our fees by the amount it costs you as a commercial financial institution to join the Global Banking Alliance for Women, which is an organization that helps commercial banks understand the business opportunity and help capture the business opportunity of servicing more female clients. So that’s creating products that intentionally are marketable toward women, and then hopefully that changes the way that banks do business going forward. So I always love to bring up that example.

And then, just very quickly, we have a website, called where we highlight all of our projects. It’s so transparent. That’s another piece about this, transparency and accountability. We want you to know where the money is going. So you can actually go on that website and see where the investments are being made and see the different business models that are being invested in.

BIGIO: OK. Thank you all. Please join me in thanking Katie and Kweilin for their leadership in this space. (Applause.) And thank you all for joining us.


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