The G20 Is Finally Taking Gender Equality Seriously

It’s about time.

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LONDON - JULY 18: In this photo illustration a pregnant woman is seen stood at the office work station on July 18, 2005 in London, England. Under plans to revise paid maternity leave, an exteneded period of six to nine months will be offered for maternity leave from 2007. (Photo illustration by Daniel Berehulak/Getty Images)

Last week, the G20 formally established the W20, or Women20, a new initiative to promote gender inclusive growth. This is an important step toward finally taking gender equality seriously. Closing the gender gap and creating more economic opportunities for women is not only a moral issue, it’s smart economics. And it’s a lesson that all countries, including some of the most economically advanced, need to learn. (Full disclosure: As the director of Chatham House’s international economics department, I have been involved in setting up the W20 project.)

Raising the number of women in the labor market has a positive impact on growth. According to the Organization for Economic Cooperation and Development (OECD), full convergence in participation workforce rates should increase the annual GDP per capita in OECD countries by 0.6 percentage points, with an equivalent increase in GDP of 12 percent by 2030. Given the risk that the world economy could be gripped by long-term low growth rates — which International Monetary Fund chief Christine Lagarde has referred to the “new mediocre becoming the new reality” — it would be foolish not to exploit this opportunity to boost growth. This is particularly critical for countries like Japan, which has an ageing population, low fertility rate — about 1.39 children per woman in 2011 — and where approximately 60 percent of women in paid employment, one third of whom are in part-time jobs.

Active policies and ambitious targets are essential to encourage more women in many developed countries to join the labor market, to ensure that women stand equal chances to get appointed to the top jobs, and to close the pay gap between men and women. The United States is a good example: Without policies encouraging women’s participation in the workforce, the United States will continue to be a country where it is more likely that the person running a corporation is named John or David than is a woman. And this is not only a problem for women trying to climb the corporate ladder. The number of women in politics is also low: only 22 percent of members of Congress are women, while there are almost twice as many men as women in the current administration.

Gender-inclusive growth is an area where even modern countries with high living standards (in relative terms) and well-educated populations don’t score as well as one would expect. In the United States, for instance, where about 40 percent of the population is college-educated, 62 percent of women of working age are active in the labor market — compared with 69 percent in Canada, 68 percent in Germany, and 74 percent in Norway. Italy, another advanced economy and a member of the G7, performs even worse: only about 48 percent of women are part of the labor market. Like Japan, Italy is struggling with ageing population, low fertility, and an underperforming economy. All of the countries could be doing better if they increased women’s workforce participation.

The countries that excel at gender equality are the northern European states. For years, these countries have been promoting and implementing policies to narrow the gender gap. These policies stretch from maternity benefits for new mothers to excellent, cheap childcare (an area in which the United States, especially, scores poorly) to gender quotas for corporate boards (as in Norway where 40 percent of corporate boards must be women as of 2006). These examples show that more active policies are needed to advance women’s rights and empower women in advanced economies. Assuming that being healthy, wealthy, and well-educated would be enough to create the same opportunities for women as for men is not enough. In Britain, France, and Germany, for instance, policies to encourage women with children to stay in paid employment have resulted in a significant increase in the female participation to the labor market.

But the global picture is less positive. Between 1990 and today, the women’s participation rate in the global labor force dropped from 57 to 55 percent. While this reflects a variety of factors, including tighter labor market in many countries, it also proves that female economic advancement is not a linear process. Assuming that gender equality can take care for itself is fallacious. There is no substitute for well-targeted active policies.

In 2014, the Global Gender Gap Report, compiled each year by the World Economic Forum, assigned the United States a score of 0.75 (a score of 1 indicates perfect equality) and 20th place in the total ranking. This puts the United States behind not just Switzerland and Sweden, but also Nicaragua, Rwanda, Burundi, and South Africa. Clearly, gender equality is not only a matter of income and education. Even among the best-educated individuals, gender equality shouldn’t be taken for granted. According to a 2013 study of the balance between the work and life of Harvard faculty, female professors with children spend 20 more hours a week on household duties compared with their male colleagues.

The creation of the W20 as one of G20 engagement groups — a proposal put forward by Chatham House and Australian National University and championed by Turkey as this year’s chair of the G20 — promises to engage the leading forum for economic and financial affairs on gender equality. Economic growth is, of course, prominent on the G20 agenda. Ensuring sustainable, balanced, robust growth is a challenge for many countries and many policymakers. Now it’s time for governments — of developed and developing countries alike — to get serious about gender-inclusive growth by setting achievable targets and assessing progress.

Daniel Berehulak/Getty Images

Paola Subacchi is director of international economics research at Chatham House.