India’s gross domestic product (GDP) could see a jump of around 60 per cent by 2025 if the gender inequality issue in society is resolved and more women are allowed to join workforce, says a McKinsey report.
According to a new report by McKinsey Global Institute (MGI), closing or even narrowing the global gender gap in work would not only be equitable in the broadest sense but could have far more economic impact than previously estimated.
In a full-potential scenario in which women play an identical role in labour markets as men, India is likely to witness the highest potential boost at 60 per cent, the report titled ‘The Power of Parity’ said.
“Economic development enables countries to close gender gaps, but progress on four indicators in particularâ€”education level, financial and digital inclusion, legal protection, and unpaid care workâ€”could help to accelerate progress,” said Anu Madgavkar, an MGI senior fellow based in Mumbai.
According to the analysis of 95 countries, female workers currently generate about 37 per cent of the world’s GDP, considerably lower than their 50Â per cent share of the global working-age population suggests is possible.
In case of India, the share of regional GDP generated by women is only 17 per cent.
The report analysed 15 gender equality indicators for 95 countries home to 93 per cent of the world’s women and 97 per cent of the world’s GDP.
Globally, the report said “if all countries were to match the progress toward gender parity of the country in their region with the most rapid improvement on gender inequality, as much as USD 12 trillion could be added to annual global GDP growth in 2025”.
In case of a “full-potential scenario” in which women play an identical role in labour markets as men, as much as USD 28 trillion, or 26 per cent, could be added to global annual GDP in 2025.
“This report shows how much the global economy stands to gain from accelerating momentum toward gender parity,” McKinsey Global Institute director Jonathan Woetzel said adding that “but capturing the economic benefits will mean addressing gender inequality in society as well as attitudes”.
According to McKinsey, the gap in labour force participation partly reflects the unequal sharing of household responsibilities between men and women. Around 75 per cent of the world’s unpaid work is undertaken by women, including the vital tasks that keep households functioning such as child care, caring for the elderly, cooking and cleaning.
“Using conservative assumptions, MGI estimates that this unpaid work could be valued at USD 10 trillion per year, an amount roughly equivalent to 13 per cent of global GDP,” the report said.