Workplace gender equality could add $2.1 trillion to U.S. economy by 2025, says report

Efforts to bridge workplace gender parity over the next few years could add $2.1 trillion US annually in GDP to the U.S. economy by 2025, a report by the McKinsey Global Institute suggests.

Enhancing women’s economic potential has 'huge ramifications' for growth. But don't hold your breath

Women in the U.S. currently hold 42 per cent of full-time jobs and 64 per cent of part-time jobs, while forming 46 per cent of the entire workforce. (Florian Choblet/AFP/Getty Images)

Efforts to bridge workplace gender parity over the next few years could add $2.1 trillion US annually in GDP to the U.S. economy by 2025, a report by the McKinsey Global Institute suggests.

About 38 per cent of the $2.1 trillion would need to come from higher female participation in the workforce; 32 per cent from narrowing the gap between men and women who work part-time and full-time; and 30 per cent from boosting the presence of women in higher-paying work sectors.

The $2.1 trillion figure is 10 per cent more than the "business as usual" GDP projected for the same period if none of the proposed changes are implemented, the report says.

"Gender inequality is a pressing human issue but also has huge ramifications for jobs, productivity, GDP growth and inequality," the report reads. "Worldwide, enhancing women's economic potential has gone hand in hand with achieving greater social gender equality."

Labour force participation

In order for the U.S. to achieve what the report calls a "best-in-class scenario" in terms of female labour force participation, all U.S. states would need to match the states with the fastest rate of improvement toward gender parity in the workforce over the past 10 years.

For example, Iowa and Wisconsin have the country's highest work participation rates for women age 25 to 54 at 89 and 87 per cent respectively. Conversely, Arizona and Utah have comparatively low rates for the same age group at 69 and 64 per cent.

The U.S. Bureau of Labour Statistics projects a decline from 74 per cent female labour-force participation nationally in 2014 to 72 per cent in 2025. (Oli Scarff/Getty Images)

Utah would need to increase participation rates for women at more than three per cent a year over the next decade in order to catch up, because the state's current rate is a negative growth rate of 0.6 per cent a year. In fact, the U.S. Bureau of Labour Statistics projects a decline from 74 per cent female labour-force participation nationally in 2014 to 72 per cent in 2025.

An additional 6.4 million jobs would need to be created — on top of the 10 million projected by the BLS by 2025 — to accommodate the number of female workers in a "best-in-class scenario."

The reports says, in line with historical trends, an increase in female workforce participation is not expected to drive down male participation significantly. Citing BLS data, the participation of prime-aged women in the U.S. rose from 36 per cent in 1950 to 76 per cent in 2000, while the participation of men stayed over 90 per cent. 

Part-time vs. full-time work

Although women make up 46 per cent of the entire U.S. workforce — contributing to 40 per cent of the country's GDP — women currently hold 42 per cent of full-time jobs and 64 per cent of part-time jobs.

On average, a woman in the U.S. works 89 per cent of the paid work hours of a man, or a little over one hour less per day, based on a 10-hour working day.

Women hold a higher share — approximately double — of unpaid care work such as cooking, cleaning and taking care of children and older family members, compared with men. (Christopher Furlong/Getty Images)

The report also notes women hold a higher share — approximately twice as much — of unpaid care work such as cooking, cleaning and taking care of children and older family members compared with their male counterparts.

Such work is not recognized as GDP, which the report says could be valued at an estimated $1.5 trillion annually based on available data on minimum wages.

Other factors such as teenage pregnancy, single motherhood and violence against women — the report says violence against women costs the U.S. $4.9 billion a year, mostly from direct medical costs and some from lost productivity — also contribute to women working less in the labour force. This in turn reduces gender parity in professional and technical jobs, as well as women rising to leadership positions.

High-productivity sectors

The report says women are highly represented in lower productivity sectors such as social work, education and health-care services.

A sector's productivity is measured by GDP per worker in the industry. Lower productivity means lower wages.

Roughly 60 per cent of the 6.4 million additional jobs need to be in three high-productivity sectors: 

  • Professional and business services.
  • Information sector.
  • Manufacturing.
To achieve full participation in the workforce, women will need to find jobs in high-productivity sectors such as professional and business services, information and manufacturing. (Sean Gallup/Getty Images)

Creating 6.4 million potential new jobs would require about $475 billion more capital investment in 2025, mostly from the private sector with state and local governments also contributing.

Much of the cash would go toward things like infrastructure, innovation and talent development.

In a "full-potential" scenario, where the gender gap in the labour force is completely bridged, the reports says the amount of additional GDP that could be tacked on could be as high as $4.3 trillion annually.

However, the report says that is not likely to happen.

"It is … unlikely that women in the United States will attain full gender equality at work within a decade, because the barriers hindering women from participating in the labour market on par with men are unlikely to be fully addressed within that time frame and because, ultimately, such participation is a matter of personal choice."


Justin Li

Senior News Writer

Justin Li is a senior news writer. Prior to joining CBC News, he worked for the Toronto Star and wrote for various magazines in Toronto, where he's always lived.


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?