The Macro-Economic Benefits of Gender Equality

While there is a strong moral imperative for promoting equal opportunities for women in the labour market, this economic brief discusses the business case for doing so, which is strong as well. Even if sizeable progress has been made over the last decades, women in the EU still report significantly fewer hours of paid work than men. At the same time, there are stark differences between countries with respect to gender gaps in labour market outcomes. Addressing gender gaps can contribute to growth by expanding labour supply as well as through likely positive impacts on productivity. Bringing gender gaps in full-time equivalent employment rates in line with the Swedish case (the best performer in EIGE’s gender equality index) could increase labour supply by 4 pps in the EU27; fully closing them would increase it by 9 pps. The economic dividends of more gender equality are especially welcome in the aftermath of the Covid-19 pandemic, and in view of the demographic transition, where EU Member States invariably face a decline in the proportion of the population at working age. Policy measures addressing barriers that fall disproportionally on women often have the potential to support other vulnerable groups and make growth more inclusive in general.