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Women’s Day 2019: More gender equality means 31% GDP rise by 2025

In Europe, there has been a significant shift regarding gender equality and representation. Percentage of women in corporate boards has surged 3x over the past 15 years.

Advancing women’s equality could boost global GDP by 31% or $28 trillion by 2025, the size of the US and China GDP combined, says a BofA-ML report, forecasting that by 2020 women would hold $72 trillion of the world’s financial assets, double the 2010 level, and accumulate assets 1.5 times faster than men.

However, the report cautions that there is still much to do — the economic gender gap is reducing at a snail’s pace and, all being equal, will not close for centuries, 202 years to be precise.

Despite the increased focus on diversity, the US lags other developed nations in both pay and policy gaps. Moreover, Corporate America does not look like Main St. America: The average S&P 500 board seats four men for every woman; just 5% of companies have a woman at the helm, and the S&P 600 small cap index, which reflects more recently established corporations, looks even worse on these statistics.

On the brighter side, the report points out, incentives to close the gender gap are evident: Companies focused on gender diversity at a board, C-suite and firm level have consistently achieved higher ROE and lower earnings risk in subsequent years. Moreover, companies focused on diversity have generally traded at premia to more homogenous counterparts.

gender gap

In Europe, there has been a significant shift regarding gender equality and representation. Percentage of women in corporate boards has surged 3x over the past 15 years. Within that, those in executive positions have jumped by 60% over the past five years with every 1 in 6 of executive members now women. Moreover, this trend is expected to surge as one of the European Commission goals for 2020 is to increase the employment rate for women to 75% from its current 64%.

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