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 / Spring 2013 / Issue 70(originally published by Booz & Company)


How to Keep the Promise of the Third Billion

Next we looked at “outputs,” or indications of how well women had been integrated into national economies. Our three output groups were inclusion (female labor force participation); advancement (the number of women among professional workers, business leaders, and company owners); and equal pay for equal jobs in practice.

The central hypothesis of the Third Billion Index was that stronger inputs should correlate with stronger outputs: The stronger the policies for their empowerment, the greater the economic status of women would be. The findings strikingly backed up this hypothesis. Countries that have a solid foundation of inputs—policies aimed at giving women a footing equal to that of men in the workplace and in the national economy—have yielded significantly better results. The linkage is clear, and governments need not experiment or wonder what might work.

Some countries have already put these policies into place and are generating results. For example, Argentina, one of the countries that showed a strong correlation between inputs and outputs, was among the first Latin American nations to enact legislation regulating working conditions for women and children. It has a strong education system, in which more girls complete secondary and tertiary education today than boys. (Although this is true of some other emerging economies, it’s rare in Latin America.) Women have advanced in the political sphere as well: Since 2007, the country has had a female president, Cristina Fernández de Kirchner, and women account for 24 percent of the national parliament—the highest proportion in the world.

Similarly, Japan has a strong legal foundation of support for women. Its constitution mandates gender equality, and the country passed equal opportunity laws back in 1986. Additional policies have followed, such as the 2001 law on men and women’s common social participation, which aims to eliminate discrimination against women. As a result, Japan has a relatively high rate of female participation in the workforce.

More broadly, research on the Third Billion suggests that economically empowering women spurs GDP growth. Our estimates, which are conservative, indicate that if female employment rates were to match male employment rates in the United States, overall GDP would increase by 5 percent. In Spain, such a change could raise GDP by 10 percent. In developing economies, the effect is even more pronounced. The United Arab Emirates would see a boost of 12 percent in GDP, and the Egyptian economy would grow by 34 percent.

Finally, these policy initiatives don’t merely benefit women. Rather, they improve socioeconomic conditions for everyone. In addition to inputs and outputs, we analyzed a third set of data points that we called “outcomes,” such as per capita GDP, literacy rates, and infant mortality. These were independent of the input and output variables, but we hypothesized that countries with strong performance in economically empowering women, as measured by the first two sets of variables, would have stronger performance in these societal measures as well.

Again, the correlation that we had expected to see showed up clearly in the results. Positive steps intended to economically empower women not only contribute to the immediate goals of mobilizing the female workforce, but also appear to lead to more widespread gains for all citizens, such as economic prosperity and improvements in health, early childhood development, security, and freedom.

Relative Progress

The economic advancement of women doesn’t just empower women; it correlates with greater overall prosperity. This idea has been a consistent theme in the literature of women’s issues, but it is typically argued with anecdotal rather than quantitative results. Our findings suggest that economically empowering women is a key to greater societal gains. One reason is that women entering the workforce increase the overall labor force, making countries more productive and increasing GDP.

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