Australia has made significant strides towards gender equality, but is still falling behind global leaders, according to new research on gender parity in the Asia Pacific by McKinsey Global Institute.
If Australia closes the gap with top performing countries, MGI’s research predicts growth of almost $AU300 billion to the nation’s annual GDP by 2025, a 12 per cent boost to business-as-usual GDP.
MGI’s Anu Madgavkar, co-author of the Power of Parity report, will explain how Australia can meet this challenge when she officially launches the report at an INSEAD event in Sydney on May 2 from 3pm.
Shadow Foreign Affairs Minister Senator Penny Wong will deliver an address on workforce gender equity at the event, which marks the 50th anniversary of the first female MBA student at INSEAD.
Ms Madgavkar says there are significant economic benefits if Australian men and women become equal partners in care and paid work, in a society where boys and girls grow up believing that parenthood and career are both valuable and compatible.
“Australia has already demonstrated innovation and determination to tackle the complex issues of gender inequality in organisations such Male Champions of Change and The Workplace Gender Equality agency,” Ms Madgavkar said.
“The stage is set for travelling all the way to gender parity but achieving this goal will require concerted action on the part of governments, corporations and partnerships of both to improve financial incentives for women to work for pay, improve the provision and uptake of supportive workplace policies, and challenge entrenched beliefs on gender roles in society.”
MGI has calculated a Gender Parity Score (GPS) for all Asia Pacific countries using 15 indicators of gender equality in work and three types of gender equality in society. Australia’s GPS score is 0.66, higher than Asia Pacific overall (0.44) but well behind the best in the region (0.73). Female participation in Australian labour markets also trails some other advanced economies. Australia’s female-to-male ratio is 0.83, compared to the UK and New Zealand at 0.88, and Canada at 0.91. Australia’s female part-time workforce is also higher than the OECD average.
Significant opportunity to boost growth
Women make up 46 per cent of the labour force, accounting for 46 per cent of Australia’s GDP. This matches the global average, but is some way behind Singapore, Canada and the US. If Australia matched the best in the region, it could add $288 billion or 12 per cent to annual GDP by 2025. If all Asian Pacific countries were to match the rate of improvement of the fastest improving country in the region, $5.7 trillion a year could be added to the region’s GDP by 2025, or 12 per cent above business-as-usual GDP.
In Australia, increasing women’s participation in the labour force accounts for 59 per cent of the GDP potential, with 23 per cent achieved by increasing the paid hours women work, and 18 per cent from increasing women’s productivity by equipping them to participate in higher-productivity sectors.
Australia can push on women’s labour-force participation on three fronts
Australia’s ageing population creates a pressing need to increase the size of the labour pool and raising women’s participation is one way to do this. The focus should be on women aged 24-35 who have children, as more of them drop out of the Australian labour force than in other countries. In this group, female participation is 75 per cent vs. male participation of 91 per cent.
MGI’s report calls for action on three fronts to keep women in work:
§ Marginal incentives: Many women want to work but face costly or insufficient childcare. Improving marginal financial incentives to work after the cost of childcare and tax is key.
§ Flexible workplace policies: Women find it difficult to juggle work and family, so flexible working conditions are vital.
§ Shifting social attitudes: Traditional attitudes pressure women to act as the primary carer for children are deterring many women from paid employment, if they choose to work.
For companies, there is a compelling case for advancing gender diversity. A January 2018 McKinsey report Delivering Through Diversity found that companies in the top-quartile for gender diversity on executive teams were 21 per cent more likely to out-perform on profitability and 27 per cent more likely to have superior value creation. The most profitable, gender-diverse companies had more women in line (typically revenue-generating) roles than in staff roles on their executive teams.
The full report is available for download at www.mckinsey.com/mgi