October 26, 2016

Gender gap at its worst point since financial crisis, says WEF

Global gender inequality has increased in the past 12 months and is now at its largest point since the financial crisis in 2008, according to the World Economic Forum (WEF).

The 2016 edition of the WEF’s Global Gender Gap Report—which measures inequality in economic participation, education, politics, and health—finds that the gap between men and women now stands at 59%. Based on this, it estimates that men and women will not become equal for 170 years.

The slowdown in progress towards equality is attributed to “chronic imbalances in salaries and labor force participation”, although it notes that in 95 countries women attend university in equal or higher numbers than men.

The top four highest performing economies for gender equality are all Nordic countries, with Iceland the most equal, followed by Finland, Norway and Sweden. Rwanda is the fifth most equal economy.

Meanwhile, the US has dropped from 20th place to 45th, which the WEF explains as being “primarily due to a more transparent measure for the estimated earned income.” Among other major economies, Germany is in 13th place and the UK is now 20th.

Elsewhere, Latin America and the Caribbean is now the third most equal region behind Europe and North America, with 70% of its gap now closed. The lowest placed region is the Middle East and North Africa, which the WEF estimates will not become equal for 356 years at today’s rate; although it also notes that some of the biggest improvements for economic participation can be found in this region (including Saudi Arabia, Bahrain, and Yemen).

The countries with the biggest increase in equality since 2015 were Nicaragua (with a 12% improvement), Nepal (11%), Bolivia (11%), Slovenia (11%), and France (10%).

Klaus Schwab, WEF executive chairman, commented that: “Women and men must be equal partners in managing the challenges our world faces—and in reaping the opportunities. Both voices are critical in ensuring the Fourth Industrial Revolution delivers its promise for society.”

In her IZA World of Labor article on women’s labor force participation, Anne E. Winkler writes: “Given societal benefits such as greater economic growth, governments have a compelling interest to undertake policies to encourage women’s labor force participation. Parental leave and childcare subsidies are two such examples.”

Lawrence M. Kahn has also written for us about wage compression and the gender pay gap. He argues that: “Pay systems that compress occupational wage differentials can reduce women’s incentives to enter male-dominated occupations and may lower workers’ incentives to acquire skills. Policies to reduce occupational gender segregation and career interruptions by women may narrow the gender pay gap without the adverse employment effects of wage compression.”

The WEF Global Gender Gap Report 2016 can be found here.

Related articles:
Women’s labor force participation by Anne E. Winkler
Wage compression and the gender pay gap by Lawrence M. Kahn
Gender differences in competitiveness by Mario Lackner
Equal pay legislation and the gender wage gap by Solomon W. Polachek

Gender differences in risk attitudes by Antonio Filippin
The pros and cons of workplace tournaments by Roman M. Sheremeta
Explore more IZA World of Labor articles about gender