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Last Updated : Mar 08, 2019 11:13 AM IST | Source: Moneycontrol.com

Gender equality could boost global GDP by up to 31% by 2025: BofA-ML

Much work is yet to be done as the gender pay gap is decreasing very slowly and if it continues at the current pace, it won’t be closed for 202 years

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Gender equality can bolster global GDP by 31 percent, or $28 trillion, by 2025, which is the size of the US and China GDP combined, according to a report by Bank of America-Merrill Lynch (BofA-ML). It stated that women accumulate assets 1.5 times faster than men, predicting that women will hold $72 trillion of the world's financial assets by 2020. This is twice the 2010 level.

The report added that much work is yet to be done to promote women's equality as the gender pay gap is decreasing very slowly. It states that if the current pace continues, the gender gap won't be closed for 202 years.

Women make up 49 percent of the population in Asia and contribute to 36 percent of GDP. However, only 12 percent of them are on companies' boards and a mere three percent make it to the chief executive positions. The report states that the information technology (IT) and consumer discretionary sectors see the most prevalent gender bias.

However, it has been seen that Asia Pacific stocks, where there are at least two female board members, have higher net profit margins and dividend yield.

In the US, there is much focus on diversity, but the results are not satisfying. In the corporate sector, on an average S&P 500 board, there are four men for every woman. Only five percent of women are at leading positions in companies. These numbers are worse for the S&P 600 Smallcap index.

On the other hand, companies that have promoted gender diversity have seen a higher return on equity (R0E) and lower earnings risk as compared to their peers. In Europe, the representation of women on corporate boards has gone up three times in the past decade and a half. The number of women in executive positions has also jumped by 60 percent since 2014. The European Commission hopes to boost women's employment to 75 percent by 2020 from the current 64 percent.

"Much needs to be done to close the gender gap but progress is being made in tertiary education and laws to support equal pay and government-assisted childcare. Industry sources value the potential uplift at $3.2 trillion to $4.5 trillion of incremental GDP," the report states.
First Published on Mar 8, 2019 11:13 am
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