How Much Does Gender Inequality Cost Globally?

Giving Compass’ Take:

• The World Bank quantifies the economic cost of gender inequality around the world ($160.2 trillion) and identifies shifts that would reduce inequality. 

• How can philanthropists use this information to inform their giving? What are the most impactful steps toward gender equality? 

• Learn about policy shifts to reduce inequalities in care work. 

Globally, women account for only 38 percent of human capital wealth versus 62 percent for men. In low- and lower-middle income countries, women account for a third or less of human capital wealth.

On a per capita basis, gender inequality in earnings could lead to losses in wealth of $23,620 per person globally. These losses differ between regions and countries because levels of human capital wealth, and thereby losses in wealth due to gender inequality, tend to increase in absolute values with economic development. For these reasons, in absolute terms the losses are largest in OECD countries.

Globally, for the 141 countries included in the analysis, the loss in human capital wealth due to gender inequality is estimated at $160.2 trillion if we simply assume that women would earn as much as men.

These estimates of the losses from gender inequality are related only to differences in lifetime labor earnings and therefore human capital wealth between women and men. Many other costs are associated with gender equality apart from those estimated in this particular note.

Two main factors lead women to have less earnings and thereby lower human capital wealth than men: lower labor force participation rates and fewer hours worked in the labor market, and lower pay. These factors keep many women in a productivity trap due in part to social norms relegating them to unpaid care and informal work.

To increase women’s earnings and human capital wealth, investments throughout the life cycle are needed, from early childhood development and learning in schools to building job-relevant skills that employers demand, encouraging entrepreneurship and innovation, and ensuring that both women and men have equal access to opportunities and resources.

A review of the literature suggests that successful interventions can be implemented in multiple areas to improve employment opportunities and earnings for women. This includes: (i) reducing time spent in unpaid work (notably subsistence and household work) and redistributing care responsibilities; (ii) increasing access to and control over productive assets (particularly land, credit, insurance and savings but also key skills); and (iii) addressing market and institutional failures (access to information and networks, legal and fiscal impediments, and restrictive social norms).