Women in the Economy II

How Implementing a Women’s Economic Empowerment Agenda Can Shape the Global Economy

In 2015 we published the Citi GPS report Women in the Economy: Global Growth Generators, which made the case that the role of women in the labor force should be incorporated as a mainstream topic within the debate on global growth for both economic as well as social reasons. In our new report, we dig deeper into the economic case for female economic empowerment through some fresh insights on the key issues as well as through a series of country case studies comparing the U.S. with Canada and Italy with Sweden. Alongside this, we have produced a standalone investigation of the issues facing Japan where harnessing the potential of women in the economy will be vital to protecting even modest growth prospects in the country.

We remain wary of the more exaggerated growth estimates driven by the simple assumption that direct female labor force participation and productivity can be raised fully to the current level of males. Instead, we estimate that significant, and in our view achievable, reductions in workplace gender inequalities could perhaps add around 6% to GDP in the advanced economies over the course of one or two decades — a very significant number relative to the potential of other structural reforms or to the relatively depressed growth prospects in advanced economies more generally.

The specific measures required to advance economic gender equality differ widely from country to country. However, common themes emerge around government initiatives such as tax, childcare support, and retirement structures as well as workplace flexibility and other employer-led initiatives. The country comparison between the U.S. and Canada is particularly instructive in this context. In Canada, for example, we show that tax reforms as well as federal and provincial government support for parenting initiatives appear to have made a positive different to female employment rates.

In the report we also highlight some key elements of the research done by the UN High-Level Panel on Women’s Economic Empowerment (UN HLP), which was established in 2016 and included Citi’s Chief Global Political Analyst Tina Fordham as one of its 20 senior representatives. To accelerate progress against the constraints that undermine women’s economic opportunity in all aspects of work, the UN HLP has made recommendations to address these constraints, which we outline in the report. The recommendations encompass seven drivers of change: tackling adverse norms and promoting positive role models; ensuring legal protection and reforming discriminatory laws; recognizing and redistributing unpaid work and care; building financial, digital, and property assets for women; changing business culture and practices; improving public sector practices in employment and procurement; and strengthening visibility and representation of women.

Picking up on one of the themes in the UN HLP work, we include a chapter in the report that looks at the potential of expanding financial access to women by introducing some practical examples which Citi has pioneered through our Inclusive Finance and Community Development teams. We also have two interviews — one with Simona Scarpaleggia, CEO of IKEA Switzerland and one with President Luis Guillermo Solis of Costa Rica — that discuss both the challenges that management has in maximizing corporate female labor participation and what role the government and private sector can play in advancing the UN principles around women’s economic empowerment.

Finally, we note that the rise in global assets that are managed according to environmental, social, and governance (ESG) criteria has risen dramatically and the UN’s Sustainable Development Goals (SDGs) are increasingly being endorsed by institutional investors as a roadmap to help drive progress on ESG issues. Within the SDG’s, women’s economic empowerment and diversity are the focus of two of the 17 SDGs and we believe the rise in social impact investing will lead to increased interest in both agendas.

Tina M Fordham