Good morning and welcome to the launch of the OECD Development Center’s 2012 Social Institutions and Gender Index, or SIGI. Before I start, I want to commend the OECD for the crucial role you play in promoting policies that improve the lives and livelihoods of people around the world. I would also like to thank specifically: Carlos Alvarez, Johannes Jutting and Somali Cerise of the OECD Development Center for the hard work that went into the creation of the SIGI Report.
As a former businesswoman, the cause of women’s economic participation–of women’s access to capital, markets and opportunities to rise according to their talents–has always been personal for me. Now, as the first Chief Economist for the Department of State, my mission is to advise the Secretary on international policies that foster global growth and prosperity. It should come as no surprise to many of you that a key, and underdeveloped, source of global economic growth is women.
From Nike to Nick Kristof, there is a growing public recognition that unlocking women’s economic potential creates enormous financial gains not just for women, but for entire communities and nations. It’s an argument Secretary Clinton has made around the world.
And in fact, the research supporting it is compelling. There are more than 200 million female entrepreneurs worldwide today. According to The Economist, over the past decade, women entering the workforce in developed nations have added more to total global growth than China has. A Goldman Sachs report shows that reducing barriers to female participation in the labor market would increase America’s GDP by 9 percent. Which is remarkable until you learn that taking down these same barriers would increase the Euro-zone’s GDP by 13 percent and Japan’s GDP by 16 percent.
McKinsey recently found that, over the past 40 years, American women went from holding just over one-third of all jobs to nearly one-half. What did that modest increase mean for the American economy as a whole? Productivity gains that account for about one quarter of America’s GDP. That’s more than three and a half trillion dollars, more than the GDP of Germany.
And this shouldn’t be surprising. When barriers distort the efficient allocation of talent and skills in a society, why should we expect a distorted labor market to yield a maximized and efficient outcome? When half of our talent is constrained economically, how can we, or any country, expect to compete in a globalized market?
But when we allow women to unleash their potential as workers, entrepreneurs and business leaders, our collective economic performance rises. And when a woman prospers, the benefits do not stop with her. Women are more likely to invest what they earn back into their families, with a multiplier effect throughout their communities and their economies. As Secretary Clinton has noted, “A rising tide of women in an economy raises prosperity for families and nations.”
The data is clear. Unfortunately, data doesn’t drive the world. Too many barriers in too many places prevent women, their communities and their countries from fully realizing their full economic potential. Less than 3 percent of the CEOs from Fortune Global 500 companies are women. In 2011, only 19 percent of parliamentary seats were held by women. Less than 5 percent of heads of state were women. Women around the world face discrimination in making decisions about their children, choosing where they live, getting bank loans and–in some cases–simply walking alone in public. Daughters lack the inheritance rights their brothers enjoy. Mothers can’t confer citizenship on their children.
And don’t think the economic costs end with the women themselves. To give just one example from the OECD Development Center, countries where women are denied the right to own land have on average 60 percent more mal-nourished children.
Constraints on women take many forms: formal and informal, cultural and political, social and legal. Some are legacies carried over from a different time and context. Many haven’t adjusted to the economic realities we face today. Some are designed purposefully by those for whom the economic empowerment of women threatens deeply held beliefs on social order. But all have the effect of eroding the growth and success of communities and nations.
They diminish the social and economic gains that come from women supporting their families as innovators and entrepreneurs. And they hold back the progress that comes from widespread economic freedom and individual enterprise. This is especially true in developing countries, where economic empowerment of women is a prerequisite for sustainable development. And the research shows that investments in gender equality yield the highest returns as compared to other development investments.
Social and economic systems are organic in nature; they evolve and change over time. These changes are driven by the decisions we make, as voters, as policymakers, as political leaders, and as business executives. But good decision making depends on access to good information. In government, they say, what gets measured, gets funded. If we want economic opportunities for women to improve, we must begin with sound economic data that addresses–specifically and systematically–the challenges that women face. We have to move from the anecdotal to the comprehensive. Armed with the facts, we have to explain why, if you care about growth, you must care about women. We have to explain why it matters. Winning the argument on the merits won’t always be enough. But it is a very good start.
That is why Secretary Clinton and the United States support the launch of the OECD’s Social Institutions and Gender Index. We want to study these barriers and identify solutions. While other measures of gender inequality tell us about gender gaps in education or employment, the SIGI is unique in measuring what drives those gaps, such as women’s status in the family, the legal age to marry, inheritance discrimination, access to credit, and restrictions on right to own land and property. The index provides a tool for policy-makers and researchers to dive into the data and discover the true constraints blocking progress toward gender equality.
We are also pleased that the OECD will release the results of a 2-year study at its Ministerial later this month on Gender in Education, Employment and Entrepreneurship. This Gender Initiative offers policy recommendations to governments to create a more level playing field.
Now it’s true that data and the facts alone cannot substitute for the actions needed to address the challenges of economic exclusion experienced by women. Institutional and cultural changes require collaboration and leadership by governments, civil society, faith community leaders and the private sector. But studies like this provide the intellectual framework to inform and guide our efforts. Because this data comes from the OECD, it gives us a credible benchmark for conversations to promote women’s economic empowerment of women around the world.
We won’t always be successful–at least not right away. Change like this doesn’t happen overnight. But it does happen. It has happened already. Our progress has been uneven and imperfect. But it has also been undeniable. And we have seen how it enriches communities.
As a former businesswomen and the mother to an 8 year-old girl who deserves to succeed every bit as much as the boys in her class–I am committed to support the rise of women leaders.
As Chief Economist to the State Department, I know it not just the smart thing to do, but the right thing to do. Your work will help us make the case. I thank the OECD and all of you for your work to win the argument, empower women and make the world a more peaceful, prosperous and fair place, one data set at a time.