Shared from McKinsey & Company, By Anu Madgavkar, Olivia White, Mekala Krishnan, Deepa Mahajan, and Xavier Azcue. Read the original report here.
What is good for gender equality is good for the economy and society as well. The COVID-19 pandemic puts that truth into stark relief and raises critically important choices.
As COVID-19 continues to affect lives and livelihoods around the world, we can already see that the pandemic and its economic fallout are having a regressive effect on gender equality. By our calculation, women’s jobs are 1.8 times more vulnerable to this crisis than men’s jobs. Women make up 39 percent of global employment but account for 54 percent of overall job losses. One reason for this greater effect on women is that the virus is significantly increasing the burden of unpaid care, which is disproportionately carried by women. This, among other factors, means that women’s employment is dropping faster than average, even accounting for the fact that women and men work in different sectors.
Given trends we have observed over the past few months, in a gender-regressive scenario in which no action is taken to counter these effects, we estimate that global GDP growth could be $1 trillion lower in 2030 than it would be if women’s unemployment simply tracked that of men in each sector. (It is important to note that the impact could be more severe than the one we have modeled here if factors such as increased childcare burdens, attitudinal bias, a slower recovery, or reduced public and private spending on services such as education or childcare make women leave the labor market permanently.) Conversely, taking action now to advance gender equality could be valuable, adding $13 trillion to global GDP in 2030 compared with the gender-regressive scenario. A middle path—taking action only after the crisis has subsided rather than now—would reduce the potential opportunity by more than $5 trillion. The cost of that delay amounts to three-fourths of the total global GDP we could potentially lose to COVID-19 this year.
These estimates build on the McKinsey Global Institute’s (MGI’s) Power of Parity work since 2015. This research maps 15 gender-equality indicators across four categories: equality in work, essential services and enablers of economic opportunity, legal protection and political voice, and physical security and autonomy. (The latter three categories together indicate equality in society.) Using a Gender Parity Score, or GPS, calculated using these indicators, MGI has established a strong link between gender equality in society and gender equality in work—and shown that the latter is not achievable without the former.
Even before the coronavirus, our 15 indicators showed that tangible progress toward gender parity had been uneven and that large gender gaps remained across the world. Now, without intervention to address the disproportionate impact of COVID-19 on women, there’s a risk that progress could go into reverse. This would not just set back the cause of gender equality but also hold back the global economy. Conversely, taking steps to redress the balance now could improve social and economic outcomes for millions of women globally and help boost economic growth.
Women are more vulnerable to COVID-19–related economic effects because of existing gender inequalities
While most people’s lives and work have been negatively affected by the crisis, our analysis shows that, overall, women’s jobs and livelihoods are more vulnerable to the COVID-19 pandemic. The magnitude of the inequality is striking: Using data and trends from unemployment surveys in the United States and India, where gender-disaggregated data are available, we estimate that female job loss rates due to COVID-19 are about 1.8 times higher than male job loss rates globally, at 5.7 percent versus 3.1 percent respectively.
At a country level, the data suggest that in the United States, women made up 46 percent of workers before COVID-19. Factoring in industry-mix effects suggests that women would make up 43 percent of job losses. However, unemployment data indicate that women make up 54 percent of the overall job losses to date. Similarly, in India women made up 20 percent of the workforce before COVID-19; their share of job losses resulting from the industry mix alone is estimated at 17 percent, but unemployment surveys suggest that they actually account for 23 percent of overall job losses. Our analysis finds that the gendered nature of work across industries explains one-fourth of the difference between job-loss rates for men and women. The lack of systemic progress to resolve other societal barriers for women explains the rest.
The nature of work remains significantly gender specific: women and men tend to cluster in different occupations in both mature and emerging economies. This, in turn, shapes the gender implications of the pandemic: our analysis shows that female jobs are 19 percent more at risk than male ones simply because women are disproportionately represented in sectors negatively affected by the COVID-19 crisis. We estimate that 4.5 percent of women’s employment is at risk in the pandemic globally, compared with 3.8 percent of men’s employment, just given the industries that men and women participate in. As Exhibit 1 shows, the reason is that women have more than the average share of employment in three of the four most affected sectors, as measured by employment declines globally. Compared with the aggregate share of women in global employment—39 percent—women have 54 percent of global jobs in accommodations and food service, which are among the sectors worst affected by the crisis; 43 percent of jobs in retail and wholesale trade; and 46 percent in other services, including the arts, recreation, and public administration. Some sectors, such as manufacturing, in which men are a large majority of those employed have also been severely affected. Other sectors, such as education and healthcare, where women are the majority have suffered relatively little impact.
In examining labor-market effects and other factors for six countries—France, India, Indonesia, Kenya, Nigeria, and the United States—we find that these labor-market and industry-mix effects play out differently across countries. In Nigeria, for example, women are disproportionately represented in industries that are more affected by COVID-19 than men, while in France the opposite is true. In the United States, the gap between the sexes is less marked.
As noted, the industry-mix and labor-market specifics explain just one-quarter of the gender gap in vulnerability to job losses in the pandemic. What factors drive the other three-quarters? An important one is the burden of unpaid care, the demands of which have grown substantially during the pandemic. Women are on the front lines here; they do an average of 75 percent of the world’s total unpaid-care work, including childcare, caring for the elderly, cooking, and cleaning. In some regions, such as South Asia and the Middle East and North Africa (MENA), women’s share of unpaid-care work is as high as 80 to 90 percent. Our Power of Parity research found that the share of women in unpaid-care work has a high and negative correlation with female labor-force participation rates and a moderately negative correlation with women’s chances of participating in professional and technical jobs or of assuming leadership positions. Other research has found similar trends. As COVID-19 has disproportionately increased the time women spend on family responsibilities—by an estimated 30 percent in India, according to one survey, and by 1.5 to 2.0 hours in the United States—it is not surprising that women have dropped out of the workforce at a higher rate than explained by labor-market dynamics alone.
Another factor could be COVID-19’s disproportionate impact on female entrepreneurship, including women-owned microenterprises in developing countries (where such enterprises account for a high share of female labor-force participation). The crisis may have made some family resources scarce, such as financial capital to invest in businesses or digital devices that families must now share as children’s schooling has gone online. Our Power of Parity research showed that both digital and financial inclusion, notably access to credit from financial institutions and access to mobile banking, are closely related to the presence of women in the labor force.
Attitudes also shape how women experience the economic consequences of a crisis relative to men. These aren’t new beliefs but rather traditional societal mindsets about the role of women. They may be reflected in current decisions, at the organizational level or indeed within the family, about who gets to keep their jobs. For example, according to the global World Values Survey, more than half the respondents in many countries in South Asia and MENA agreed that men have more right to a job than women when jobs are scarce. About one in six respondents in developed countries said the same.
Looking ahead, other structural forces could further compound gender inequality. Our previous research on the impact of long-term automation trends on work concluded that, worldwide, 40 million to 160 million women—7 to 24 percent of those currently employed—may need to transition across occupations by 2030 as automation transforms the nature of work. (The range reflects different paces of automation.) This is roughly the same level of impact that automation would have on men. However, long-established barriers to acquiring new skills and making midcareer shifts, as well as other factors, make the transition harder for women.