Women Drive Economic Growth When We Remove These Systemic Barriers

Forbes

25-03-2025

As we approach the end of Women's History Month, it's crucial to recognize the pivotal role women play as creators of our economy. Research consistently demonstrates that investing in women yields substantial returns, not only for individual businesses, but for entire economies and societies.
Investing in women's economic participation has the potential to dramatically boost global GDP. A 2023 report by Goldman Sachs suggests that just cutting the current pay and employment gap between men and women by half could boost GDP levels across developed and emerging markets by approximately 5% to 6%.
A more modest scenario of countries matching the fastest-improving country in their region is estimated to still add $12 trillion. These figures underscore the immense untapped potential that we could unlock if women are fully integrated into the workforce.
In the entrepreneurial sphere, another Forbes contributor recently covered how women-led startups generate more than twice the revenue per dollar invested compared to their male counterparts. Despite this impressive performance, women-owned businesses receive only 2% of venture capital funding. This disparity represents a significant market failure and a missed opportunity for not just women, but investors and economies alike.
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Barriers To Women's Impact As Economic Growth Drivers
Despite these benefits, structural barriers continue to hinder progress, most clearly in the impact of care responsibilities that result in women being five to eight times more likely than men to have their employment affected by caregiving. This is also closely related to the motherhood penalty, in which moms make less than women without children despite having the same experience and qualifications. This wage impact is significant, with the Century Foundation estimating that each child under 5 cuts a mother's salary by 15%.
But penalizing mothers is a losing economic strategy, as their success generates profound ripple effects that extend beyond the workplace, including improved outcomes for their children, such as sons taking on more care work as adults and daughters more likely to succeed in their own careers.
Improving women's health is another important factor that translates to tremendous economic benefits. Most of us know women live longer than men, but those lives are not lived in equal health; with women spending 25% more of their lives in poorer health. This isn't due to health conditions that primarily affect women, but in large part to the fact that men are the subject of most health studies, and therefore treatments are designed to work best on them. The World Economic Forum's recent research on the issue estimated that solving for the women's health gap could generate $1 trillion globally in GDP within 15 years. This increase would come in large part from reducing the number of years women spend in poor health, thereby increasing their ability to generate income through work—with researchers estimating that closing the women's health gap would have an impact equivalent to women accessing 137 million full-time positions by 2040.
Despite the clear economic case for governments and businesses focusing more on the economic advancement of women, significant challenges remain, such as the wage gap and the related lack of leadership representation.
How To Invest In Women's Economic Potential
To fully harness the economic potential of women, a multifaceted approach including both public and private participation is needed:
By recognizing women as drivers of economic growth and actively investing in their potential, we can create a more prosperous and equitable future for all. The data is clear: Empowering women is not just the right thing to do; it's a smart economic strategy with far-reaching benefits for society as a whole.