A wide range of economic literature shows that economies with higher levels of gender equality perform better. In Sweden and Finland, for example, women participate in the workplace at some of the highest rates in the world, whereas nations in Africa and the Middle East generally have far lower participation rates.
And the U.S.? Women contribute 40% of gross domestic product, which is above the international average of 37%. But that’s still not great. Just raising gender equality in all states to the level of the best states would increase economic output by $2.1 trillion a year by 2025, a new McKinsey Global Institute report finds. That’s a massive 10% jump in GDP.
To achieve that much benefit, however, there would need to be an investment worth $475 billion and the creation of 6.4 million additional jobs. But it’s not all about money. The report says focusing on six areas of inequality would make a big difference. These include reducing the burden of unpaid work (women do twice as much cooking, cleaning, and child-minding as men), cutting the rate of teen pregnancy, helping single mothers to find better jobs, and stopping violence against women. The report shows how parental-leave programs (like the one San Francisco just introduced) and more accessible child-care facilities can quickly pay for themselves by increasing economic activity.
McKinsey says every state and city can achieve a 5% increase in GDP by advancing women’s economic potential. Half of all states can add 10%, with 50 of the largest cities seeing a possible increase of 6% to 13%. New Mexico has the greatest potential, with a 15%-plus increase possible.
“Interventions in the 10 most affected states will improve equality for more than 50% of the U.S. women affected by these types of gender inequality,” the report says. “Southern states make up the majority of the bottom quartile on three indicators–single mothers, teenage pregnancy, and political representation–suggesting that action on these impact zones should be a priority in the region.”
The U.S.-focused follows a similar one from McKinsey last year looking at global economic potential. It found $12 trillion in possible GDP improvement from gender equality.