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Want to accelerate GDP? Employ more women

An assembly-line worker at a General Motors factory in Wentzville, Missouri February 7, 2012.

Sarah Conard/REUTERS

Maybe it would be presumptuous to answer for any other country, but I can say with some confidence that Canada could use a 5-per-cent boost in gross domestic product. So I read with interest a new analysis from the Harvard Business Review (HBS) which suggests that a lot of countries could have all that and more if they just used all their human resources – which is to say, fully employ women as well as men.

To be fair, the 5-per-cent boost is a reference to the United States, not Canada. According the HBS article, research by Booz and Allen (which was released last fall) suggests that the U.S. would see a GDP boost of that size if its women were employed at the same rates as men. Japan would see a 9-per-cent hike; Egypt a whopping 34 per cent.

These data were part of an update of how women are faring, in terms of economic equality, the world over. Canada comes off as further along the spectrum than most.

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According to their "Equality Matrix," which graphs "Support for Women" (in terms of formal equality policies) vs. the "Economic Success of Women," Canada lands nicely in the upper right-hand corner, along with countries such as New Zealand and the Netherlands. On the Booz Allen list of 128 countries, Canada scores 70.5 in economic success (behind only Australia, Norway and Sweden), and 60.3 for support for women (which puts it 22nd on the list, one behind the United States).

But it is the "boost in GDP" point that really gets my attention. We talk a lot about the coming demographic shift that will potentially slow the Canadian growth rate. We talk about the skills mismatch out there, which means the jobs that need to be filled are not being filled. Surely we cannot afford to have women who would rather be in the labour force be shut out of it, for whatever reason.

So what are the reasons that women are not employed at the same rates as men? In some cases, it is because they choose to take a break from the labour force, primarily to care for their families. In others, it is because they have no choice but to take that break because the cost of childcare or elder care (the latter a fast-growing category) is too high to make it worth their while to work. It is that second case that could potentially be influenced by policies, whether by employers or government.

I would argue that the problem is a complicated one and cannot be solved simply by slapping on a daycare subsidy here and there. In a truly productive, high-value-added economy, jobs would pay more in real terms anyway, and people (men and women) would be able to make different choices about work. Both sexes might even choose to work less – which would pose a whole different set of problems.

Getting to that higher-productivity economy, however, means a bunch of different and less simple choices, such as cutting taxes (business and personal), encouraging innovation and finding ways to raise productivity.

The country that figures out how to do all of those things would find itself pretty squarely in the upper right-hand corner of success for everyone.

Linda Nazareth is the principal of Relentless Economics Inc. and a senior fellow at the Macdonald Laurier Institute.

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About the Author

Linda Nazareth is the principal of Relentless Economics and senior fellow for economics and population change at the Macdonald Laurier Institute. More


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