How the economics of inequality is holding back the UK

Linda J. Dodson

A virtuous circle can be created by elevating the position of women in society, evidence suggests. Research by the World Bank found that rising incomes in a country led to lower fertility rates, allowing more women to enter the workforce.

Closing the gap between the labour force participation rates of men and women has been a factor in driving growth as the workforce expands. However, globally the labour force participation rate for women between 25 and 54 is still just 63pc compared to 94pc for men.

A McKinsey report in 2015 estimated that $12 trillion could be added to annual GDP by 2025 if every country matched the rate of improvement seen in their respective region’s top performer. It is not just an issue for developing countries, however.

There remains a large gap in participation rates in Britain too while gender pay problems have also leapt on to the agenda. The UN estimates that GDP could be boosted by $6 trillion if all Organisation for Economic Co-operation and Development (OECD) countries had levels of female employment seen in Sweden – just under 70pc. In late 2019 the female employment rate in the UK reached a record high of 72pc, but is still eight percentage points lower than that of males.

Researchers are warning that the Covid-19 crisis is setting back vulnerable groups.

Women are more likely to work in harder-hit industries, such as hospitality, retail and tourism, while they are more likely to bear the burden of childcare when schools are closed.

Stefania Fabrizio of the International Monetary Fund says women are more vulnerable “not only because of their jobs, but also because of gender inequalities within housework division, education, and health”. 

She calls on Governments to impose “gender-responsive fiscal policies” to regain “the lost ground in gender equality”.

Hudson says research shows persistent disadvantages against Black, Asian, and minority ethnic (BAME) groups in the UK.

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