Through World War I—and in fact through much of the first half of the 20th century—demonstrations for women’s suffrage and better working conditions rippled through the world. Women entered the labor force, and they gained the right to vote and hold political office in most countries.
So, more than a century later, where do we stand?
Beyond voting rights, women’s participation in the workforce is probably one of the most significant outcomes of this effort. In the US, the average annual labor force participation rate for women of working age went from 32.7% in 1948 to a high watermark of 57.4% in 2019. 1978 was a milestone year: 50% of women became part of the civilian workforce. 2020 was a step-back year: for the first time, the trend reversed with the participation rate dropping back to 56%, as COVID-19 disproportionally pushed women out of the workforce.
Globally, the labor force participation rate for women has hovered at around 50% since the 1990s, compared to around 80% for men, according to the World Bank. The gap varies across regions. In the places it has begun to close it is largely because of drop in male labor participation, rather than more women choosing to work.
This matters. The IMF estimated in 2018 that closing the gender participation gap for the bottom half of countries in their sample could increase GDP by an average of 35%. And the GDP boost is not driven solely by the increase in labor participation, but also from productivity gains coming from higher diversity.
Which leads to the next point: As we discuss in the Diversity and Equality longer term investment theme, closing the gender gap not only benefits society, but also companies and investors.
While change comes slowly, it is on the way. In 2022, for the first time women made up 32% of directors of companies in the US S&P 500, up from 17% in 2012. The last company to have an all-male board added a female director in 2019. In January and February, women gained another 34 boards seats on the S&P 500— the strongest start since 2019—according to Bloomberg. Similarly, the UK FTSE 350 also reached a milestone with 40% of directors being female, three years ahead of the UK government plan.
In our view, investor pressure and consumer attention, a shifting societal environment, a growing body of evidence and regulatory efforts to drive gender equity have combined to create a compelling case for companies to invest in transparency and gender equity.
International Women’s Day is a good opportunity to take stock and celebrate these achievements. Yet, we can’t rest on these laurels. Board or executive level diversity on gender, race, or other metrics is only the tip of the iceberg. As more companies reach these top-line representation milestones, those with robust and transparent policies to source, train and retain diverse talent will be the ones to differentiate.
In a world of more diverse and discerning consumers and employees, and a shifting future of work, identifying these companies should bring investment opportunities—while also continuing the century-old effort toward equality.
Main contributor: Amantia Muhedini
Read the original blog 115 years of effort for gender equality 8 March 2023.
This content is a product of the UBS Chief Investment Office.