Given trends we have observed over the past few months, in a gender-regressive scenario in which no action is taken to counter these effects, we estimate that global GDP growth could be $1 trillion lower in 2030 than it would be if women’s unemployment simply tracked that of men in each sector. (It is important to note that the impact could be more severe than the one we have modeled here if factors such as increased childcare burdens, attitudinal bias, a slower recovery, or reduced public and private spending on services such as education or childcare make women leave the labor market permanently.) Conversely, taking action now to advance gender equality could be valuable, adding $13 trillion to global GDP in 2030 compared with the gender-regressive scenario. A middle path—taking action only after the crisis has subsided rather than now—would reduce the potential opportunity by more than $5 trillion. The cost of that delay amounts to three-fourths of the total global GDP we could potentially lose to COVID-19 this year.
These estimates build on the McKinsey Global Institute’s (MGI’s) Power of Parity work since 2015. This research maps 15 gender-equality indicators across four categories: equality in work, essential services and enablers of economic opportunity, legal protection and political voice, and physical security and autonomy. (The latter three categories together indicate equality in society.) Using a Gender Parity Score, or GPS, calculated using these indicators, MGI has established a strong link between gender equality in society and gender equality in work—and shown that the latter is not achievable without the former.
Even before the coronavirus, our 15 indicators showed that tangible progress toward gender parity had been uneven and that large gender gaps remained across the world. Now, without intervention to address the disproportionate impact of COVID-19 on women, there’s a risk that progress could go into reverse. This would not just set back the cause of gender equality but also hold back the global economy. Conversely, taking steps to redress the balance now could improve social and economic outcomes for millions of women globally and help boost economic growth.
Women are more vulnerable to COVID-19–related economic effects because of existing gender inequalities
While most people’s lives and work have been negatively affected by the crisis, our analysis shows that, overall, women’s jobs and livelihoods are more vulnerable to the COVID-19 pandemic. The magnitude of the inequality is striking: unemployment surveys in the United States and India, where gender-disaggregated data are available, suggest that female job-loss rates resulting from COVID-19 are about 1.8 times higher than male job-loss rates. At a global level, this translates into a 5.7 percent unemployment rate for women versus 3.1 percent for men. At a country level, the data suggest that in the United States, women made up 46 percent of workers before COVID-19. Factoring in industry-mix effects suggests that women would make up 43 percent of job losses. However, unemployment data indicate that women make up 54 percent of the overall job losses to date. Similarly, in India women made up 20 percent of the workforce before COVID-19; their share of job losses resulting from the industry mix alone is estimated at 17 percent, but unemployment surveys suggest that they actually account for 23 percent of overall job losses. Our analysis finds that the gendered nature of work across industries explains one-fourth of the difference between job-loss rates for men and women. The lack of systemic progress to resolve other societal barriers for women explains the rest.
The nature of work remains significantly gender specific: women and men tend to cluster in different occupations in both mature and emerging economies. This, in turn, shapes the gender implications of the pandemic: our analysis shows that female jobs are 19 percent more at risk than male ones simply because women are disproportionately represented in sectors negatively affected by the COVID-19 crisis. We estimate that 4.5 percent of women’s employment is at risk in the pandemic globally, compared with 3.8 percent of men’s employment, just given the industries that men and women participate in. As Exhibit 1 shows, the reason is that women have more than the average share of employment in three of the four most affected sectors, as measured by employment declines globally. Compared with the aggregate share of women in global employment—39 percent—women have 54 percent of global jobs in accommodations and food service, which are among the sectors worst affected by the crisis; 43 percent of jobs in retail and wholesale trade; and 46 percent in other services, including the arts, recreation, and public administration. Some sectors, such as manufacturing, in which men are a large majority of those employed have also been severely affected. Other sectors, such as education and healthcare, where women are the majority have suffered relatively little impact.
In examining labor-market effects and other factors for six countries—France, India, Indonesia, Kenya, Nigeria, and the United States—we find that these labor-market and industry-mix effects play out differently across countries. In Nigeria, for example, women are disproportionately represented in industries that are more affected by COVID-19 than men, while in France the opposite is true. In the United States, the gap between the sexes is less marked.
As noted, the industry-mix and labor-market specifics explain just one-quarter of the gender gap in vulnerability to job losses in the pandemic. What factors drive the other three-quarters? An important one is the burden of unpaid care, the demands of which have grown substantially during the pandemic. Women are on the front lines here; they do an average of 75 percent of the world’s total unpaid-care work, including childcare, caring for the elderly, cooking, and cleaning. In some regions, such as South Asia and the Middle East and North Africa (MENA), women’s share of unpaid-care work is as high as 80 to 90 percent. Our Power of Parity research found that the share of women in unpaid-care work has a high and negative correlation with female labor-force participation rates and a moderately negative correlation with women’s chances of participating in professional and technical jobs or of assuming leadership positions. Other research has found similar trends. As COVID-19 has disproportionately increased the time women spend on family responsibilities—by an estimated 30 percent in India, according to one survey, and by 1.5 to 2.0 hours in the United States—it is not surprising that women have dropped out of the workforce at a higher rate than explained by labor-market dynamics alone.
Another factor could be COVID-19’s disproportionate impact on female entrepreneurship, including women-owned microenterprises in developing countries (where such enterprises account for a high share of female labor-force participation). The crisis may have made some family resources scarce, such as financial capital to invest in businesses or digital devices that families must now share as children’s schooling has gone online. Our Power of Parity research showed that both digital and financial inclusion, notably access to credit from financial institutions and access to mobile banking, are closely related to the presence of women in the labor force.
Attitudes also shape how women experience the economic consequences of a crisis relative to men. These aren’t new beliefs but rather traditional societal mindsets about the role of women. They may be reflected in current decisions, at the organizational level or indeed within the family, about who gets to keep their jobs. For example, according to the global World Values Survey, more than half the respondents in many countries in South Asia and MENA agreed that men have more right to a job than women when jobs are scarce. About one in six respondents in developed countries said the same.
Looking ahead, other structural forces could further compound gender inequality. Our previous research on the impact of long-term automation trends on work concluded that, worldwide, 40 million to 160 million women—7 to 24 percent of those currently employed—may need to transition across occupations by 2030 as automation transforms the nature of work. (The range reflects different paces of automation.) This is roughly the same level of impact that automation would have on men. However, long-established barriers to acquiring new skills and making midcareer shifts, as well as other factors, make the transition harder for women.
Even before the pandemic, progress toward gender equality had been uneven
The gender effects of the COVID-19 crisis highlight the uneven progress toward gender equality. Indeed, in the aggregate, progress toward equality in work and society has stayed relatively flat in the five years between 2014 and 2019. In 2014, the global GPS score was 0.60; today, it is 0.61 (on a scale of 0 to 1, where 1 signifies full parity between women and men). Gender equality in work continues to lag behind gender equality in society, with a GPS of 0.52 versus 0.67, respectively. The world has made progress on a few aspects of gender equality, such as maternal mortality, the share of women in professional and technical jobs, and political representation. However, the level of female participation in the labor force is about two-thirds that of men and has hardly budged in that period (Exhibit 2). Within this overall picture, countries and regions can vary significantly. India has seen a slight decrease in female labor-force participation in the past five years, for example, while Indonesia has registered a small increase.
We had argued before the pandemic that narrowing the global gender gap in work would not only be equitable in the broadest sense but could be one of the largest boosters to global GDP growth. Conversely, the lack of progress on gender equality is proving to be economically costly.
Three scenarios of GDP in 2030 highlight the value at stake from greater gender equality
Our original Power of Parity research developed economic scenarios out to 2025. It defined a “best in region” scenario assuming that all countries matched the progress toward gender parity of the fastest-improving country in their region. For our calculations of the first-order economic impact of COVID-19 on gender equality, we have updated that analysis and pushed out the date to 2030 (see the sidebar, “Our methodology”). We modeled global estimates and focused further on six countries to understand regional differences: France, India, Indonesia, Kenya, Nigeria, and the United States.
We define three potential scenarios in the post–COVID-19 world of women at work. The first is a gender-regressive “do nothing” scenario. It assumes that the higher negative impact of COVID-19 on women remains unaddressed, and it compares GDP outcomes in 2030 to the case in which women’s employment growth tracks that of men in the recovery. The second is a “take action now” scenario, which would improve parity relative to the gender-regressive one. The third is a “wait to take action” scenario continuing until the economic impact of COVID-19 subsides. We have modeled this on the assumption that action to improve gender parity starts only in 2024.
The do-nothing scenario is the most negative one we modeled (Exhibit 3). The regressive labor-market outcomes described above would imply that women experience a disproportionate share of job losses during the COVID-19 pandemic. This would slightly reduce the female-to-male labor-force participation rate, from 0.63 before COVID-19 to 0.61 in 2020. No new actions would be taken to improve gender parity between now and 2030, and the female-to-male labor-participation rate would remain stuck at 0.61. Under this scenario, global GDP in 2030 would be $1 trillion below where it would have been if COVID-19 had affected men and women equally in their respective areas of employment. Compared with that baseline, 33 million fewer women would find employment in this gender-regressive scenario in 2030.
The best option is the “take action now” scenario, which amounts to a substantial economic opportunity. Policy makers would take decisions, in 2020 and beyond, that would significantly improve gender equality over the next decade. We estimate that the global value of achieving best-in-region gender-parity improvements by 2030 could lead to $13 trillion of incremental GDP in that year, an 11 percent increase relative to the do-nothing scenario. Across our six focus countries, the increase ranges from 8 percent to 16 percent. This scenario would also raise the female-to-male labor-force participation rate from 0.61 in 2020 to 0.71 in 2030—with the creation of 230 million new jobs for women globally, compared with the do-nothing scenario in 2030.
Under the wait-to-take-action scenario—in which policy makers and others wait until 2024 to drive best-in-region improvements in the female labor force—global GDP still gets a bounce in 2030, but it is $5.4 trillion lower than it would be if action were taken now. The female-to-male labor-participation rate would rise to 0.67, from 0.61 in 2020, marking some progress.
While we have modeled one potential do-nothing scenario, it is important to note that outcomes for women and global economies could be worse than the outcomes described here. For example, if childcare burdens are felt for many months, this could cause more women to leave the labor market permanently. Likewise, if the recovery is slower than described in these scenarios, more women may permanently drop out of the labor force. These analyses also exclude the pandemic’s other potential effects on gender inequality—for example, violence against women and retrenchment of the gains in girls’ education. Globally, one in three women has experienced violence from an intimate partner at some time in their lives, and there are concerns that the current pandemic is further worsening the situation. Should the pandemic have an impact on these aspects of gender equality in society, that could not only affect millions of women but also have knock-on economic effects if it impedes their ability to participate in the workforce and to gain new skills.
These scenarios are thus not predictive but instead represent potential pathways for the next normal of countries after COVID-19 (Exhibit 4). What is clear is that doing nothing to maintain and advance gender parity could negatively influence both the economic and social lives of women, as well as economic growth more broadly. By contrast, investing in women and girls in the recovery represents a significant opportunity to improve gender equality and drive inclusive economic growth.
The implications: You need to act now
The strong message emerging from our research is that the faster policy makers and business leaders act to push for greater gender equality, even as the COVID-19 crisis continues, the bigger the benefits not just for gender equality but also for economic growth. Conversely, there is a real risk of losing even more economic output—and the economic security it could mean for millions of women—than COVID-19 would normally imply for all workers. Women stand to lose both in terms of parity and in terms of economic benefits if nothing is done and the stagnating record of the past five years settles in as the norm—on top of the gender-regressive shock we are seeing as a result of COVID-19.
In previous research, we found that the cost of making sufficient investments in five areas (education, family planning, maternal mortality, digital inclusion, and unpaid care work) could amount to $1.5 trillion to $2.0 trillion in incremental public, private, or household annual spending in 2025, or 1.3 to 1.7 percent of global GDP in that year. This is 20 to 30 percent more than what would be spent in a business-as-usual case in 2025 (as a result of rising population and GDP). Yet we found that the economic benefits of narrowing gender gaps are six to eight times higher than the social spending required. And it is not just countries that stand to gain from investing in women and girls; McKinsey research has also found a diversity dividend for companies. For example, those in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile. Moreover, companies now pulling back on diversity and inclusion may be placing themselves at a disadvantage in terms of resilience and the ability to recover from the current crisis; they could be limiting their access to talent, diverse skills, leadership styles, and perspectives.
Under the circumstances, what measures should policy and business leaders consider? Just as we have seen variations among countries in progress toward gender equality, so too the policies to be put in place will need to be tailored to the national context. It is not the purpose of this paper to give an exhaustive set of suggestions. But we see a role for all stakeholders, as well as some overarching themes that pick up ideas we have already aired in our previous publications on gender equality. They include the following:
- Interventions to address unpaid child care. The importance of reducing the gender imbalance in responsibility for care cannot be overstated. Interventions to tackle this problem include better recognition of unpaid work, reducing the amount of unpaid work, and rebalancing it between men and women. MGI has determined that the value of unpaid-care work done by women is $10 trillion, or 13 percent of global GDP. Potential interventions could include these:
- employer- or state-funded provision of childcare or tax policies that encourage both spouses to work
- family-friendly policies, including flexible programs and part-time programs, to support workers experiencing an increased childcare burden during the pandemic and beyond
- rethinking performance reviews and promotions, as well as senior- and middle-management buy-in to ensure the widescale adoption of changes
- a professionalized childcare industry, with public-financing support, in developing countries, where the social-services infrastructure is less well developed; this could not just enable many women to work but also create employment for many others
- access to basic infrastructure, which in the long run can reduce the time women spend on unpaid work; for example, in lower-income countries, a significant portion of the time women devote to such work includes tasks like fetching water and firewood
- crucial measures to change social norms about who bears childcare responsibilities
Interventions to address digital and financial inclusion. Closing the gender gap in digital inclusion is an urgent priority in the pandemic. Many essentials, such as food and groceries, have migrated to online channels, making it hard to manage the day-to-day business of living without access to digital devices. From a labor-market standpoint, COVID-19 is accelerating remote-work and independent-work platforms. This could be a boon for women, who can benefit from the flexibility that such platforms offer, especially for workers in remote, digitally delivered services, such as software, design, or sales and marketing. But a persistent gender gap in digital access may keep work opportunities away from millions of women. Furthermore, many stimulus programs targeted at individuals or small enterprises depend on reliable identification and digital channels to reach the intended beneficiaries. Women are disadvantaged, as they disproportionately lack both digital access and the means for reliable identification. For example, 45 percent of women over the age of 15 lack identification in low-income countries, compared with only 30 percent of men. Business leaders and policy makers can work together to address these inequalities—for example, by using the following steps:
- increasing digital infrastructure, particularly in emerging economies
- addressing gender stereotypes that inhibit women’s access to mobile phones and improving women’s digital literacy
- measures to promote gender diversity in funding for women entrepreneurs, including eliminating biases in recruitment and selection processes for incubators or accelerators
- a special focus on women-owned enterprises under the stimulus programs of various countries
- building foundational, enabling technologies ensuring that women have access to the means of identification through high-assurance digital-ID systems with simple, inclusive registration processes, use cases that meet critical needs in the time of the pandemic, and a rigorous regulatory framework to ensure the protection of privacy
Interventions to address attitudinal biases. Any drive toward gender parity arguably starts with efforts to change entrenched, widespread attitudes about women’s role in society. This is an extremely difficult and complex challenge that will require all stakeholders to play a sustained part over the long term. Governments, businesses, and other stakeholders can run campaigns and enlist male champions to help drive home the idea that a larger number of women at work represents socially and economically beneficial progress.
While not the focus of this piece, interventions to address the economic participation of women must also address broader societal aspects of gender inequality. Indeed, the two go hand in hand, as our previous research has shown. Governments and businesses must therefore consider how to safeguard girls’ education, tackle violence against women, and protect maternal health, to name a few important issues. More data are needed to better understand the links between women in society, women at work, and economic growth—particularly the factors that drive job loss and recovery among women. Some important questions also remain, including how future trends such as automation might amplify or blunt the impact of COVID-19 on women and how the pandemic affects the wages, job security, and benefits of women. Answering such questions could shape future decisions by governments, multilateral organizations, and companies. But our scenarios show that there may not be enough time to ponder these issues. Procrastination is a losing game. The time for action is now.
The evidence from our research is clear: what is good for greater gender equality is also good for the economy and society as a whole. The COVID-19 pandemic puts that into stark relief and raises some critically important choices: act now to remove barriers to greater female labor-force participation and a bigger role in society and reap the economic and social benefits; delay and still benefit, but to a substantially lesser degree; or allow the disappointing status quo to prevail and slide backward, leaving massive economic opportunity on the table and negatively affecting the lives of millions of women. Parity is powerful. This is the time for policy makers and business leaders to step up and make it a reality.
About the author(s)
Anu Madgavkar, based in McKinsey’s Mumbai office, is a partner with the McKinsey Global Institute, where Mekala Krishnan, based in the Boston office, is a senior fellow. Olivia White and Deepa Mahajan are McKinsey partners in the San Francisco office, and Xavier Azcue is a consultant in the New Jersey office.
The authors wish to thank Rishi Arora, Ryan Luby, James Manyika, Mackenzie Nolan, Tracy Nowski, Jose Maria Quiros, and Jonathan Woetzel for their contributions to this article.