What Makes Women Rich

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Women make up the majority of the U.S. workforce and an even larger majority of knowledge, professional, and creative workers. In a provocative and controversial essay in this magazine, Hannah Rosin argues that the post-industrial economy is better suited to the types of skills and capabilities women possess. The current economic crisis has been dubbed a "mancession" by some - as men in blue-collar jobs have borne the brunt of layoffs and unemployment.

But economic opportunity for women varies widely across the globe, according to an important new measure, the Women's Economic Opportunity Index, released recently by the Economist Intelligence Unit (EIU). The Index provides an empirical gauge of the status and opportunity afforded women across 113 nations. Spanning 26 separate variables on women in the labor market, educational outcomes and opportunity, women's legal and social status, access to finance, and the general business environment, it is drawn from data from the World Bank, the UN, the International Labour Organization, the World Economic Forum, and the OECD, along with a series of new indicators.


The map above, prepared by Zara Matheson based on the report's data, shows the rankings for the 113 nations covered by the Index. As the map shows, women's economic opportunity is substantially better in the more advanced, wealthier nations of Scandinavia and Northern Europe, the U.S. and Canada, Australia and New Zealand. Scandinavian and Northern European nations take the top five spots. Sweden tops the list, followed by Belgium, Norway, Finland, and Germany. Canada ranks ninth and the U.S. 15th.

The Economist study finds a clear relationship between women's economic opportunity and income levels. Women have become more fully integrated into the wealthier nations across virtually every dimension. But this is not the case in less-developed countries. In too many of these nations, writes Leo Abruzzese, one of the authors of the study, "Women have fewer educational and employment opportunities than men, are more often denied credit, and endure social restrictions that limit their chances for advancement. In some developing countries, women still cannot vote, own property, or venture outside the home without a male family member."

This begs the question: To what degree is growing economic opportunity for women associated with the economic development of nations broadly? It stands to reason that economies that afford women more opportunity will gain economic advantage  for the simple reason that they can tap a broader reservoir of talent and skill.


With the help of my colleague Charlotta Mellander, I decided to take a look at the the connections between women's economic opportunity and a range of key economic and social factors. We ran a basic correlation analysis and generated a series of scatter graphs of the factors that might be associated with greater economic opportunity for women. The graph above summarizes our key results. As usual, I point out that these are preliminary, exploratory analyses that simply point to associations between variables. We don't make any claims about the direction of causality, and we acknowledge that intervening variables may come into play.


Economic opportunity is closely associated with a nation's level of economic output and overall economic competitiveness. The Women's Economic Opportunity Index is closely associated with both economic output, measured as Gross Domestic Product (with a correlation of .87), and with the World Economic Forum's basic measure of economic competitiveness (.76).


But other factors may matter as well, over and above the effects of income or the level of economic development. For one, as Rosin and others argue, the rise of the knowledge economies appears to have tilted the economic playing field toward women. To what degree then is women's economic opportunity associated with post-industrial economic structures defined by higher levels of education and higher levels of knowledge, professional, and creative work? The Women's Economic Opportunity Index is closely associated with both the level of human capital measured as education attainment (.8) and with the percentage of workers in creative class fields (.81) spanning science, technology, business and management, heath care, education, arts, culture, media, and entertainment.


The general openness of nations is also likely to play a role. Do women have more economic opportunity in nations that are more open, diverse, and tolerant in general? Using data from the Gallup Organization on attitudes toward gays and lesbians and toward racial and ethnic minorities, we find that the Women's Opportunity Index is closely associated with each (a correlation of .43 with attitudes toward racial and ethnic minorities and .74 with attitudes toward gays and lesbians).

This brings me to the broader question of human development and happiness: To what degree is greater economic opportunity for women associated with greater human development overall and with higher levels of happiness and life satisfaction? The Women's Economic Opportunity Index is closely associated with the UN Human Development Index (.86), and it is also associated with happiness as gauged by Gallup surveys (.68).

We also looked at the relationship between economic opportunity and my own overarching measure of creativity and prosperity - the Global Creativity Index (GCI). The GCI is a composite measure of what I have elsewhere dubbed the three Ts of economic development - Technology, Talent, and Tolerance. The correlation between GCI and the Women's Economic Opportunity Index is quite substantial (.89), the highest of any factor in our analysis.

Women's economic opportunity is closely associated with economic development. Women have considerably more opportunity in the wealthier, more developed nations, especially in Scandinavia and Northern Europe. But other factors come into play. Economic opportunity for women is closely associated with the transition to knowledge-driven economic structures with higher levels of human capital and more creative class occupations. Women's economic opportunity is also greater in nations which are more open and tolerant generally toward gays and lesbians and racial and ethnic minorities. Overall, we find an especially close association between the economic opportunity afforded women and our Global Creativity Index, a composite measure of national creativity and competitiveness. Nations where women have greater economic opportunity also have higher levels of overall life satisfaction and happiness.

Not only do women have greater opportunity in wealthier, more open, post-industrial nations, women are an integral component of the economic development equation. Nations that are more open to women and afford them more opportunity gain economic advantage by harnessing a greater level of human skill and potential. Now, more than ever, the path to economic prosperity requires further human development. Creating economic and social structures which develop women's full talents and afford them the full range of  economic opportunity is a key element in securing lasting economic prosperity.

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Richard Florida is Co-founder and Editor at Large of CityLab.com and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More

Florida is author of The Rise of the Creative ClassWho's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here
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