Women have won five presidential elections in Latin America—an impressive feat. Yet much more still needs to be done to advance women's equality in the region. The economic benefits alone would be huge—by our calculations more than $1 trillion over the next decade. At a time when many Latin American economies are struggling, that’s too good a dividend to pass up.
Today, in Latin American legislatures and government ministries, there is roughly one woman for every three men—slightly higher than the global average of about one woman for every five men. Meanwhile, Latin American women spend about three times more time engaged in unpaid work than men, about in line with the worldwide average. (In comparison, Indian women spend ten times more time than men in unpaid work.) However, Latin American women’s workforce participation rate is less than 70 percent of that of men. That compares to about 80 percent or more in China, sub-Saharan Africa, North America and Western Europe.
Some countries are making faster progress toward gender equality than others. For example, ILO data suggests that Chile is closing the gender gap in labor-force participation, and Ecuador is pulling women out of agriculture faster than other countries. We calculate that, if all countries in Latin America were to match similar rates of improvement, the region could boost its gross domestic product by 14 percent, or $1.1 trillion, by 2025. The findings come from our recent global study at the McKinsey Global Institute (MGI), The power of parity: How advancing women’s equality could add $12 trillion to global growth. Latin America’s potential economic gain from such a scenario is the second highest of any region (the highest is in India).
MGI calculated the economic impact of closing the gender gap in labor markets in 95 countries covering 93 percent of the world’s female population and 97 percent of its GDP. Every country would receive a GDP boost of at least 9 percent.
If Latin American women were to participate in the economy identically to men, the full potential boost to GDP could be $2.6 trillion, or an additional 34 percent of GDP. Worldwide, the full potential is $28 trillion or 26 percent of GDP. This assumes that gender gaps in labor-force participation rates, hours worked and representation within each economic sector (which impacts productivity) are erased.
Countries that wish to achieve the economic prize of gender equality must also focus on closing gender gaps in society. Latin American countries show moderate levels of equality on both. In a comprehensive mapping of gender equality, MGI has compiled a Gender Parity Score, or GPS, that ranges from zero (no equality) to 1.0 (full equality). The lowest GPS is 0.44 in South Asia and the highest 0.74 in North America and Oceania. Latin America’s average score is 0.64, indicating room for improvement.
Action in four priority areas could accelerate progress toward gender parity in Latin America because each has a knock-on effect on other types of inequality. They are: improving women’s access to education, access to finance and digital services like the Internet, more legal protection, and reducing the amount of time women spend in unpaid work. The latter two are especially important for Latin America.
Governments have traditionally been at the forefront of efforts to promote gender equality. But companies now need to step up and lend their expertise and marketing clout to this effort in order to seize the significant economic benefits that are being left on the table.
This article originally ran in Americas Quarterly.