Economic benefits of gender equality in the EU Gender Equality Commission Council of Europe 5-7 April 2017

International expert group 5 pathways Methodological steps 300 resources 9 pathways International expert group 5 pathways EIGE’s study on the economic benefits of GE looked at the economic impacts of improved gender equality in several broad areas such as education, labour market activity and wages. It also considered the demographic impact of such improvements. The study is unique in the EU context, as for the first time, a robust econometric model has been used to estimate economic impacts of improved gender equality in several broad areas such as education, labour market activity and wages. It also considers the demographic impact of such improvements. In order to get the results, there were many steps along the way. I will briefly outline them now Firstly an extensive literature review was carried out to identify a broad range of social and economic impacts of gender equality using over 300 research publications from the EU and national level. The results of the literature review led to the development of 9 potential pathways in which improvements in GE can affect national economic performance . These 9 potential pathways were put to an international group of experts and based on their feedback, the number of pathways/outcomes to be modelled were reduced to 5.

Pathways Closing the gap in tertiary education Closing the gap in labour market activity Closing the gender pay gap Demographic change due to closing of gender gaps Combined effects of pathways 1 to 4 Next there was a detailed analysis to assess the potential effects of GE across the 4 pathways (educational attainment, activity rates, pay gap and the impact of a more equal distribution of unpaid care work on fertility). The analysis formed the basis for the inputs into the E3ME macroeconomic model, which then produced the following results that I will now share with you.

Gender equality boosts GDP Gender equality has strong, positive impacts on Gross Domestic Product (GDP) per capita which grow over time. By 2050, improving gender equality would lead to an increase in EU (GDP) per capita by 6.1 to 9.6%, which amounts to €1.95 to €3.15 trillion.

Gender equality creates jobs Improvements in gender equality would lead to an additional 10.5 million jobs in 2050, which would benefit both women and men. About 70% of these jobs would be taken by women, however female and male employment rates meet in the long run, reaching an 80% employment rate by 2050. New jobs occupied by women are particularly important as they can help to reduce poverty, one of the key priorities of the EU 2020 strategy.

Impact on GDP by 2050 The estimated GDP impacts of increased gender equality vary considerably across Member States, depending on the present level of achievement of gender equality. Countries with more room to improve gender equality have much to gain. On average, improved gender equality in these countries is expected to lead to an increase in GDP of about 12% by 2050. The best performing countries in the area of gender equality have already achieved good levels of gender equality and therefore already enjoy some of the associated economic benefits. However, further improvements in gender equality can generate additional economic gains even in these Member States, often reaching around 4% of GDP. 

Closing the gender gap in activity rate boosts GDP GDP per capita increase of 3.2% to 5.5% by 2050 Closing the activity rate gap, which refers to the percentage of people who are either working or looking for work, would generate a GDP per capita increase of 3.2 to 5.5% in 2050. This is up to €280 billion increase in GDP by 2030 and €1,490 billion increase in GDP by 2050.

Closing gender gaps in STEM education boosts GDP Reducing the gender gap in Science, Technology, Engineering and Mathematics (STEM) education areas could help reduce skills gap, increase employment and productivity of women and reduce occupational segregation. Ultimately this would foster economic growth via both higher productivity and increased labour market activity. However, despite good employment opportunities and highly productive jobs in this area, there is currently a low proportion of women studying and graduating in STEM subjects Increasing the participation of women in STEM subjects will have a strong positive GDP impact at EU level. Closing the gender gap in STEM would contribute to an increase in EU GDP per capita by 2.2 to 3.0% in 2050. In monetary terms, closing the STEM gap leads to an improvement in GDP by €610 - €820 billion in 2050. A larger pool of STEM workforce is expected to be more productive, to boost the potential productive capacity of the economy and generate an increase in GDP per capita.

Closing gender gaps in STEM education creates more jobs 1.2 million jobs Closing gender gaps in STEM education would have a positive impact on employment.  Total EU employment would rise by 850,000 to 1,200,000 by 2050. These jobs are forecasted mostly in the long term as employment rates will rise only after more women studying STEM finish their education. The new jobs are likely to be highly productive because women graduating from STEM often progress into high value added positions in sectors such as information and communication or financial and business services. Higher productivity of STEM jobs is likely to result into higher wages. Remarkably, the study shows a closure of the gender wage gap by 2050. Slow progress scenario: Closure of gap in computing by 2-14pp; closure of gap in engineering by 4-12 pp Rapid progress scenario: Closure of gap in computing by 5-14pp; closure of gap in engineering by 9-12 pp

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