When women suffer from sexism, so does the entire economy. That’s the crux of a new paper by economists David Cuberes of Clark University and Marc Teignier of Universitat de Barcelona), which quantifies the economic loss caused by the limited involvement of women in professional fields, especially among entrepreneurs and CEOs.
Across Organization for Economic Co-operation and Development countries, according to the data reported in the study, a third or fewer entrepreneurs are women, and the percentage of female CEOs is a scrawny 3 percent. In addition to the moral grounds for boosting women’s access to higher-level professional positions, there are also economic motivations for doing so, as The Economist points out.
The presence of women entrepreneurs raises the “average talent of entrepreneurs” by increasing the pool of contenders. Entrepreneurs in greater numbers increase competition, which boosts success in the economy and income per capita. Using the latest available data up to 2010, the authors looked at the existing gap between female and male participation in the workforce, and entrepreneurship levels and chief executive positions among women. They then quantified the short-term and long-term effects on a country’s per capita income by projecting what it would be for that year if women’s involvement in the workforce (both their participation overall and the jobs they occupied) were equal to men’s.
By this measure, in OECD countries the average long-term per capita income loss due to gender imbalance totaled 15.4 percent. The countries suffering more from lower female workforce participation overall were Turkey, Mexico, Chile, and Italy, where the long-term economic consequences of the gender gap added up to a per capita income loss of between 20 and 33 percent (p.31):
The researchers also measured the impact of what they termed “occupational inequality,” or a lack of female representation in entrepreneurship and CEO positions. The OECD countries that suffered the largest losses in per capita income compared to projected gender-equal levels were Israel and Turkey (a loss of more than 7 percent), followed by Japan, France, Norway, Ireland, Denmark, and Sweden (a loss of more than 6 percent). Among non-OECD countries, Bangladesh and Pakistan suffered the most from the lack of female entrepreneurs and CEOs, leading to a per capita income loss of over 17 percent.
In comparing regional differences globally, the Middle East and North Africa had the largest losses in per capita income (losing more than 40 percent on average), with India, Bangladesh, and Pakistan following closing behind (an average loss of over 33 percent) (p.33-35).
The best-performing countries in terms of female workforce participation were Ghana, Liberia, and Rwanda, with projected per capita income losses of around 1 percent. This was chalked up to the agricultural makeup of these economies, in which men and women are equally likely to work.