There are too many constraints on women in the global economy, from unequal pay to limited leadership roles, which is weighing on economic progress, a prominent economist warns.
Nouriel Roubini, the economist credited with predicting the collapse of the U.S. housing market and the financial crisis that followed, says gender inequality is an ongoing threat to global productivity, with potential long-term economic impacts.
During a speech in Vancouver on Thursday, Roubini highlighted statistics showing that a higher participation rate of females in the workforce, equal pay, and having more women on boards and in executive roles, helps to increase business productivity, and profits.
Still, women around the world continue to struggle with gender equality at work.
“The case for having a stronger role of women in the business world is compelling,” Roubini said during a speech at The Next Billion: Women and the Economy of the Future conference.
“Lots of work has been done, but more needs to be done.”
Roubini has been called “Dr. Doom” for delivering some pretty gloomy economic forecasts in the past. In his speech on Thursday, he offered a mix of positive and negative indicators for the global economy. Some good news included a pickup in many emerging markets, as well as higher corporate profits in the developed world, both of which will help to support global growth. However, rising government debts, geopolitical tensions and the impacts of climate change are some of the issues facing the economy.
Productivity will also be a challenge as the workforce ages and as the development of new technologies slows, which Roubini says makes the role of women in the business world increasingly critical.
He called on both governments and corporations to do more to encourage a higher participation rate among women in the workforce.
“Women should lean it,” Roubini said, borrowing a phrase from the title of the popular book by Sheryl Sandberg, “but governments and corporations and businesses should also lean in to make sure that there is greater opportunity to empower women in the business world.”
Roubini listed six main areas where women face challenges in the global economy:
1. The female labour force participation rate is lower than men, which impacts both productivity and spending power.
2. More women are becoming entrepreneurs, but there are still too many barriers, including lack of access to financing due in part to discriminatory lenders, as well as too few mentors.
3. There are too few women on corporate boards and in executive roles. Studies have shown more women in these leadership positions help to improve the bottom line. “Supply isn’t static. It’s dynamic,” says Roubini. “You can do plenty to recruit, to nurture, to mentor, [and] retain women,” to become leaders.
4. The “persistence of a significant gender pay gap” both in developed and emerging economies.
5. Women influence roughly 80 per cent of consumer purchasing decisions, so should be more involved in the global economy.
6. Women need more support to be able to balance work and family commitments.
“There has been progress in the direction of gender equality, but it’s still very limited,” said Roubini, pointing to the World Economic Forum’s Global Gender Gap Report 2014.
The report shows the global gender gap for economic participation and opportunity is 60 per cent, up a mere 4 per cent from 56 per cent in 2006.
“Based on this trajectory, with all else remaining equal, it will take 81 years for the world to close this gap completely,” the report states.
While the trends are positive, “they are too slow,” Roubini says. “So much more can be done.”