In honor of International Women’s Day, Bank of America Merrill Lynch released a study that broke down the ways in which women’s equality and gender diversity could help significantly boost the global economy.
World Bank estimates that women only account for about 38% of human capital wealth. The World Bank surveyed 141 countries and calculated that human capital wealth inequality is actually costing those nations about $160 billion, or 2x global GDP.
According to Bank of America’s research, women’s equality could add between $12 trillion to $28 trillion, or about a 13% to 31%, boost to global GDP by 2025.
McKinsey calculated those figures based on a couple of different scenarios. “A ‘best in region’ scenario in which all countries match the rate of improvement of the fastest improving country in their region could add as much as $12 trillion, or 13%, to global annual GDP by 2025.” That would be the size of both the U.S. and China’s GDP combined.
In what they call a “full potential scenario,” women would play identical roles as their male counterparts in their respective labor markets. McKinsey said that would add about $28 trillion, or 31%, to global GDP by 2025.
Women in the U.S. labor force
Focusing in on the U.S., Bank of America pointed out that if women’s labor force participation rate was equal to that of Norway’s, the U.S. economy could potentially be about $1.6 trillion, or 8% of GDP, larger. “Having women enter and stay in the US workforce could add some $5.8 trillion to the total global market cap,” Bank of America explained.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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