Closing the gender gap could mean a £5,500 pay rise for every working woman in Scotland – PwC
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New research shows that the UK is missing out on up to £170bn worth of economic benefits by not having enough females in employment.
PwC’s annual Women in Work Index shows that the UK could boost its GDP by 9 per cent (£170bn) if it could increase the number of women in work to match that of Sweden, the highest performing country.
The research shows that the main area where the UK underperforms is the low share of women in full-time employment. The UK performs below the OECD average and ranks in 30th place out of 33 countries on this indicator (see table below).
The information comes as it was revealed by the Scottish Government that more women than men – 54 per cent to 46 per cent - were appointed to the boards of public bodies in 2015.
PwC’s Women in Work Index shows that although the UK’s overall female employment rate is higher than the OECD average, many women are struggling to return to work after having children or career breaks.
The number of mothers in work in the UK lags behind Sweden and is slightly behind the OECD average (66.6 per cent in the UK, versus 83 per cent in Sweden and 66.8 per cent OECD average) and ONS data show that there are 1.5m women in the UK who want to work more hours than they currently do.
More work needs to be done in the UK to encourage dual-earner households and to keep mothers in employment. Businesses and the Government could learn from the Nordic countries, which continue to lead the Index due to their high levels of overall and maternal employment. These countries are reaping the economic and business benefits of introducing family friendly policies, such as paternity leave, as early as the 1970s – allowing more women to get back into full-time employment.
Lindsay Hayward, tax partner at PwC, said: “It is encouraging that the UK is making progress on the employment prospects for women – including the fact that in Scotland we now have more women than men appointed to the boards of public bodies - but there is still a way to go before we match the Nordic countries.
“There are considerable benefits to more women being in the workplace and having parity of pay, both for the UK economy and for individuals. Achieving parity of pay for women and men would result in an average increase of 18% to the income of working women.”
Lindsey Paterson, who leads PwC’s Gender Balance Initiative, added: “Improvement is always welcome but we have a long way to go in considering ourselves one of the most progressive as we are still not making the most of one of the most talented and capable parts of the workforce.
“This isn’t just about recognising them financially, it’s about looking at the other issues, including affordable access to childcare but also supporting people at work and enabling them to rise to senior positions.
“It’s not just about ensuring women are back at work and are on pay parity with their male counterparts, it’s about ensuring that they feel comfortable in progressing their career into senior positions, where females are – on the whole – still incredibly under-represented.”
The UK’s overall position on PwC’s Women in Work Index has climbed to 16th, from 21st last year, due to progress on narrowing the gender pay gap since 2000 and a significant reduction in female unemployment as a result of the improving economy.
Although the UK has reduced its gender pay gap since 2000, it is still above the OECD average and is the 21st largest out of the 33 countries. PwC’s analysis shows that closing the gender pay gap in the UK could boost overall female earnings by around £80bn. This would mean a £5,500 pay rise, on average, for every woman working in the UK.
Yong Jing Teow, economist at PwC, added: “The focus in the UK on tackling the gender pay gap should help the UK continue to rise up the Index and could add £80bn of economic benefits.”
Gaenor Bagley, head of people and executive board member at PwC, said: “We know that women are confident and ambitious – to make real progress, we need workplaces and a society that help support those aims.”
The Women in Work Index is now in its fourth year and tracks female economic empowerment across five key indicators, including: the gender pay gap, the proportion of women in full time employment, the proportion of women in work, the gap between male and female labour force participation and female unemployment.
The results are then ranked across 33 OECD countries.
The UK’s ranking for each indicator in PwC’s Women in Work Index
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