The Economic Benefits of Gender Equality in the EU. Estimating the Macroeconomic Benefits of Gender Equality

The study commissioned by EIGE assesses how improvements to gender equality could impact on the European economy. It focuses on three potential improvements to future gender equality: 1. more women graduating with degrees in science, technology, engineering and mathematic (STEM graduates), 2. more women actively participating in the labour market, 3. reduced gender pay gaps. Underpinning the three pathways is an assumption that there is a shift to a more equal distribution of unpaid work. Such a shift could also have a noticeable impact on fertility rates across Europe and so this is also included in the analysis. In each pathway two scenarios are formed that show different rates of progress towards a more equal society, reflecting possible differences in the level of ambition. The scenarios are quantified based on historical trends and differences between EU countries, reflecting the increased scope for countries that currently lag in gender equality to catch up. The E3ME macro-econometric model is used to assess these scenarios over the period up to 2050. A key part of the exercise is translating the scenarios into model inputs, for example changes in productivity, wage rates or labour market participation rates. The model then estimates the impacts on the wider labour market and on macroeconomic indicators including GDP, investment and trade. The model results show that there are potentially large economic benefits from improving gender equality in the EU. GDP could increase by more than 12 percent in the most ambitious scenario by 2050, compared to a baseline case, if all the pathways are combined. There could be a substantial increase in both the size of the labour force and the number of people in employment. Notably, there could be benefits for men as well as women. The study does not address particular policy options but shows that the potential benefits are large enough to warrant further investigation.