World Economy

Gender Pay Gap Could Cost World $160 Trillion

Gender Pay Gap Could Cost World $160 TrillionGender Pay Gap Could Cost World $160 Trillion

Gender inequality in the workplace could cost $160 trillion in lost earnings globally, a World Bank study showed, as pressure to address the pay gap grows.

That represents the difference between the combined lifetime income of everyone of working age in the world today—known as human capital wealth—and what it would be if women earned as much as men.

Investing in women and girls would help increase the wealth of both high- and low-income states, said the report’s author Quentin Wodon, lead economist with the World Bank Group. “Everybody would benefit from gender equality,” he told the Thomson Reuters Foundation.

The $160 trillion figure represents around 2% of global gross domestic product and amounts to an average disparity of $23,620 per person globally. It was calculated based on the earning potential of the current labor forces in 141 countries.

Women account for only 38% of the global human capital wealth and face barriers in the workforce in practically every country, according to the World Bank.

Women are less likely than men to join the paid labor force and when they do they are more likely to work part-time, in the informal sector, or in occupations that have lower pay, the World Bank said.

Employers around the globe have come under scrutiny in recent months over the differences in pay for male and female staff. Some states like Norway have been pioneering gender quotas, requiring nearly 500 firms to raise the proportion of women on their boards to 40%.

The issue has also come under the spotlight in Britain, where a law introduced last year requires companies and charities with more than 250 workers to report their gender pay gap each year.

Losses in wealth from inequality in earnings between men and women vary by region. The largest losses, each between $40 trillion and $50 trillion, are observed in East Asia and the Pacific, North America, and Europe and Central Asia.  

This is because these regions account for most of the world’s human capital wealth. Losses in other regions are also substantial.

In South Asia, losses from gender inequality are estimated at $9.1 trillion, while they are estimated at $6.7 trillion in Latin America and the Caribbean and $3.1 trillion in West Asia and North Africa.  

In Sub-Saharan Africa, the losses are estimated at $2.5 trillion. While losses in low-income countries are smaller in absolute terms than in other regions, as a share of the initial endowment in human capital, the losses are larger than for the world.



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