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The Gender Pay Gap is Costing the Global Economy $7 Trillion | Moody’s Analytics

The gender pay gap has been a longstanding issue in many countries, with women often earning less than their male counterparts for doing the same job. This gap affects individuals and has significant implications for the global economy. According to a recent report by Moody’s Analytics, the world economy could be boosted by around $7 trillion if the gender pay gap were to be closed. However, at the current rate, it could take 132 years to close the economic gender gap.

The Economic Benefits of Closing the Gender Pay Gap 

The Moody’s Analytics report highlights that closing the gender pay gap would lead to more women joining the labor force, increasing productivity and boosting the economy. Moreover, if women were to hold more managerial and professional roles, it would lead to a further increase in economic activity. In OECD countries, narrowing the gender gap in labor force participation and management could raise global economic activity by approximately 7%. Emerging markets such as India, where the pay gap is wider, could see even greater potential for economic growth.

Root Causes of the Gender Pay Gap

The report identifies several root causes of the gender pay gap, including family responsibilities carried by women, a lack of similar network connections, and gender bias. Women are often held to higher standards than men, and they are less likely to ask for promotions, resulting in a lack of representation in senior roles. Moreover, women tend to land in lower-level and lower-paid positions, employed below their skill level, despite investing more upfront in education than men. Shifting social norms and policies such as flexible working conditions, affordable childcare, and paid parental leave could help drive change in the right direction.

Implications of the Gender Pay Gap

The gender pay gap has significant implications for the global economy, potentially costing the world $7 trillion in economic growth. Moreover, discrimination and bias make women underrepresented in senior roles and being paid less than their male counterparts. This leads to an under-skilling of women, resulting in an economic loss at both the individual and macroeconomic levels. If left unaddressed, the gender pay gap will continue to hold back economic growth and hinder progress toward gender equality.

Closing the gender pay gap is not only a matter of fairness and an essential step toward achieving greater economic prosperity. The report by Moody’s Analytics shows that the global economy would significantly boost if women were paid equally to men, the global economy would significantly boost. However, achieving this goal will require collective action from policymakers, employers, and individuals. It is time to recognize the value of women’s contributions and address the root causes of the gender pay gap to create a more equal and prosperous world.

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