This interactive displays the relationship between women's economic participation and GDP growth, drawing on data collected by the McKinsey Global Institute (MGI) for a September 2015 report, “The Power of Parity: How Advancing Women's Equality Can Add $12 Trillion to Global Growth.” The following draws on text from MGI's report, summarizing their approach and assumptions.

Building a Supply-Side GDP Model

MGI's analysis is a supply-side model that estimates the economic effects of closing the gender gap in labor markets across ninety-five countries, which cover 93 percent of the world's female population and generate 97 percent of the world's GDP. MGI modeled three scenarios to estimate the economic opportunity presented by bridging the gender gap in the workforce by 2025. The first scenario is a business-as-usual projection of GDP growth based on consensus forecasts. The second is a full-potential scenario that measures the total economic opportunity of closing gender gaps in the world of work. While full gender parity is a worthy aspiration, the complex and multifaceted issues that affect women's participation in work mean that this is a challenging goal to achieve by 2025. Equally, participating in the workforce is a matter of personal choice. MGI therefore also developed the best-in-region scenario. This third scenario describes the GDP growth opportunity for each country if it were to match the rate of progress toward gender parity of the fastest-improving country in its region based on selected workforce measures over the past decade.

MGI's analysis of economic gains measures three dimensions of work: labor force participation rates, hours worked, and the sector mix of employment (which affects labor productivity). First, closing the gap in labor force participation accounts for 54 percent of the incremental GDP growth in the full-potential scenario. Second, women in the labor force work fewer hours than men because many are in part-time jobs—a trend that could be driven partly by choice and partly by their inability to do full-time work given family and other home-related responsibilities. Closing this gap accounts for 23 percent of the incremental GDP growth in the full-potential scenario. Third, women are disproportionately represented in lower-productivity sectors such as agriculture, and are insufficiently represented in higher-productivity sectors such as business services. Shifting women into work in higher-productivity sectors on a par with the employment pattern of men contributes another 23 percent of the incremental GDP growth in the full-potential scenario.

Notably, the influence of each of these three drivers varies among regions. In India and across the Middle East and North Africa, increasing female labor force participation would contribute 90 and 85 percent, respectively, of the total additional economic growth. Women already participate in the labor force in large numbers in sub-Saharan Africa and in Eastern Europe and Central Asia; there, around 40 percent of the potential increase in output would come from shifting women into higher-productivity sectors. In Western Europe, about 50 percent of the full-potential growth would come from closing the gap between men and women in the number of hours worked.

MGI's analysis assumes that in the full-potential scenario, women's participation matches that of men on each of the three measures—labor force participation rates, hours worked, and the sector mix of employment. In the best-in-region scenario, countries match the rate of progress toward gender parity of the fastest-improving country in their region across each of these three measures. Countries in Western Europe, for example, would close the gap between men and women in labor force participation by 1.5 percentage points a year, in line with best-in-region Spain's progress between 2003 and 2013. In East and Southeast Asia, countries would match Singapore's rate of 1.1 percentage points a year, while in Latin America, countries would match Chile's annual rate of 1.9 percentage points.

Economic factors influence how much a country gains from increasing gender parity in the workforce. Female labor force participation rates tend to be high in countries at low stages of economic development, dip in middle-income countries, and rise again in more advanced economies. The lower the current level of gender parity in work, the more a country stands to gain from closing workforce-related gender gaps. Demography can also be a factor: for example, increasing women's economic participation can have a particularly positive effect on countries with aging populations. Many of these economies face the prospect of slowing GDP growth due to a shrinking labor force as the share of population over the age of fifty-five grows. Increasing female participation can help mitigate this effect.

The full-potential and best-in-region scenarios are not meant to be forecasts: they use empirical assumptions to identify potential economic gains that may encourage progress toward gender parity. MGI also acknowledges that realizing this potential will require addressing demand-side constraints, addressing barriers surrounding unpaid work, making investments in job creation and skills development, and so on. Furthermore, the analysis does not take into account any second-order consequences from increased participation by women, including increased consumption by women, any negative effects on male labor force participation, or any drag on productivity due to changes in the supply of labor relative to capital. The analysis also does not take into account other economic benefits from bridging gender gaps (for example, the intergenerational benefits that may arise from better-educated and healthier women raising families).

MGI's analysis relies on data from various external sources. Business-as-usual estimates were based on data from IHS Global Insights. Other data sources used include the UN World Population Prospects, the International Labor Organization, the World Input-Output Database, data from select national statistics offices, and Oxford Economics.

Please note that the MGI research was published in 2015 and this analysis therefore relies on data from the above sources available in that year. Any differences with numbers today could arise from differences in actual data vs. projections since that time, and/or updates made by the above agencies to their data.

See the appendix section of MGI's report, “The Power of Parity: How Advancing Women's Equality Can Add $12 Trillion to Global Growth”, for additional detail on their methodology.

MGI has continued its research on the power of parity, and has recently published analyses of the economic gains from advancing women's equality in the Asia-Pacific region (2018), Canada (2017), India (2015), the United Kingdom (2016), and the United States (2016).

Assessing Gender Parity

MGI assessed the level of gender parity in a country through an analysis of fifteen indicators covering gender equality in work as well as physical, social, political, and legal gender equality. They identified these indicators through a review of global charters and statements of principle, such as the Convention on the Elimination of All Forms of Discrimination Against Women and the Sustainable Development Goals.

The fifteen indicators are:

• the ratio of labor force participation rates by gender;
• the ratio of men and women with professional and technical jobs;
• the perceived wage gap for similar work between men and women;
• the ratio of women and men in leadership positions;
• the distribution of unpaid care work among men and women;
• the percentage of women whose need for family planning is not met;
• maternal mortality rates;
• education levels by gender;
• the extent to which women have access to financial services relative to men;
• the extent to which women have access to cell phones and internet services relative to men;
• the presence of legal protections for women;
• the number of women in ministerial and parliamentary roles;
• sex ratio at birth;
• the percentage of girls and young women aged fifteen to nineteen who are married; and
• the percentage of women who have experienced physical and/or sexual violence from an intimate partner at some time in their lives.

Where possible, MGI measured the difference between the position of men and women (for example, how the time men spend on unpaid care work compares with that of women). Some of the indicators—such as education and legal protection—are composite indicators to include multiple aspects of inequality. See the appendix section of MGI's report for a description of each indicator and its data source.

MGI's analysis found that advancing gender parity on four specific measures—education level, financial and digital inclusion, legal protection, and unpaid care work—will help achieve gender equality in work and in society. Each point was sourced and measured as follows.

• Unpaid care work: Ratio of time men and women spent on unpaid care work. “Gender, Institutions, and Development Database 2014: Unpaid Care Work,” (OECD, 2014).
• Education level: Composite indicator of adult literacy rate, net secondary enrollment rate, and gross tertiary enrollment rate for women compared to men. UNESCO Institute for Statistics (UNESCO, 2014) and the Global Gender Gap Report 2014 (World Economic Forum, 2014).
• Financial inclusion: Composite indicator of the rate of account holders at a financial institution, borrowing from a financial institution in the previous twelve months, and use of mobile phones to send money, comparing women to men. “The Global Findex Database 2014: Measuring Financial Inclusion around the World,” (World Bank, 2014).
• Digital inclusion: Composite indicator of rate of internet and mobile users, comparing women to men. “ICT Statistics by Gender”, (International Telecommunication Union, 2014) and “Women and the Web: Bridging the Internet Gap and Creating New Global Opportunities in Low and Middle-Income Countries,” (Intel Corporation, 2012).
• Legal protection: Composite index of the extent of women's protection by eleven different legal provisions (including right to inherit and access jobs). “Women, Business, and the Law 2016: Getting to Equal,” (World Bank, 2016).

Definition of Terms

This interaction includes the following terms, as defined below.

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