Narrowing gender gap can add S$26b to Singapore’s GDP by 2025: Report

Narrowing gender gap can add S$26b to Singapore’s GDP by 2025: Report

Increasing the number of hours worked by women and their participation in higher-productivity sectors can help to boost Singapore’s growth rates over the coming years, says a new study.

Singapore CBD crowd
Office workers in the central business district of Singapore. (Photo: Sutrisno Foo)

SINGAPORE: More action to advance gender equality could help to grow Singapore’s gross domestic product (GDP) by an additional US$20 billion (about S$26 billion), or 5 per cent, by 2025, said a new report released on Tuesday (Apr 24). 

This growth potential can be achieved mainly by increasing the number of hours worked by women and having more females employed in higher-productivity sectors, according to new research from McKinsey Global Institute (MGI), the business and economics research arm of consulting group McKinsey. 

Boosting the labour-force participation of women will also help though researchers estimate that this will only contribute to about one-fifth of the potential growth given that Singapore has already made "major progress on this front”. 

From 28 per cent in 1970, female participation in Singapore’s workforce has doubled to 58 per cent in 2016, according to the report. 

MGI’s study, which assessed 18 economies in Asia-Pacific with 15 indicators of gender equality, also gave Singapore a Gender Parity Score of 0.68 when it comes to workplace metrics. This is well above the regional average score of 0.44. 

PROGRESS MADE BUT BARRIERS REMAIN

Despite that, barriers remain when it comes to “women working, working full-time and working in sectors where they can earn higher pay and improve their economic prospects”, said McKinsey’s Southeast Asia managing partner Oliver Tonby.

The report noted an “unusual” pattern of workforce participation in Singapore.

The gender gap in the local labour-force participation shrinks to reach parity from the ages of 25 to 29, but widens when women are in their 30s and beyond. By contrast, the gender gap in workforce participation among Organisation for Economic Cooperation and Development (OECD) countries tends to take a small dip when women are in their 30s but rises again when women enter their 40s and return to the workforce likely after starting families. 

The rate of decline in Singapore’s female-to-male workforce participation ratio is also steeper than in other advanced economies, noted the report.

Other observations include the higher tendency for women workers to be involved in part-time work, and not necessarily by choice. Citing data from the Ministry of Manpower, females accounted for 64.3 per cent of part-time workers in 2016.

Meanwhile, married women, especially those with children, are less likely to work. In 2016, the labour-force participation rate for married women in Singapore was 63.6 per cent, compared with men’s 83.8 per cent.

Child-rearing responsibilities play a major factor, according to MGI’s report which had 41.7 per cent of women citing that as a main reason. The lack of flexible workforce policies does not help, with only 47 per cent of firms in Singapore offering full-time flexible work arrangements.

The report also noted that females in Singapore are more likely to be present in lower-paying and lower-productivity jobs that are most prone to being displaced by automation. For instance, the female-to-male ratio in clerical support jobs is 3.18, while cleaning and labouring sectors see a ratio of 1.45.

Researchers estimate that automation could potentially displace 800,000 full-time jobs in Singapore by 2030. “Automation is likely to have a less marked impact on jobs that involve managing people, applying expertise, and social interactions – professional roles that machines cannot so easily replicate – but Singaporean women are relatively underrepresented in these jobs,” the study said. 

Women are also least represented in high-growth sectors, such as information and communications where the female-to-male ratio is 0.63. The exception is finance and insurance, where the labour-force participation rate between women and men is near parity.

​​​​​​​CLOSING THE GENDER GAP

As such, MGI’s report recommended several measures that Singapore could take to advance gender equality.

For one, more could be done to help women juggle family and work. These include having more flexible work options, programmes to ease the transition for mothers returning to work and expanded leave options that include more gender-balanced parental leave policies.

Economic incentives for women to remain in the workplace could also be increased, with companies auditing employee pay to identify gender wage gaps in similar roles and create programmes to close them. MGI also recommends the Government to create an equal remuneration clause for men and women to hold corporations accountable.

Efforts to equip women with essential skills that would increase their representation in higher-paying jobs and higher-growth sectors will also be essential, said Ms Lin Diaan-Yi, McKinsey’s managing partner for Singapore. 

Upgrading of skills is one way to protect women’s employment and income prospects though many are reluctant to study science, technology, engineering and mathematics (STEM) subjects, Ms Lin added.

For instance, while undergraduate women in Singapore recognise the value of digital and technology skills, they often lag behind men in increasing their digital fluency, the report showed.

Only 68 per cent have taken a coding or computing course, compared with 83 per cent of men. When it comes to quick adoption of new technology, only 46 per cent gave a positive answer – well below the 63 per cent of men. Less than half of females surveyed said they would continue to learn digital skills.

“As demographic change threatens to put more pressure on women’s family responsibilities and as automation displaces low-skilled jobs, the government and companies can pursue a rich agenda of action to make further progress towards gender parity in Singapore,” said Ms Lin.

Apart from a review of university policies and job requirements to encourage more women to study and work in STEM-related fields, Ms Lin added that employers can do more to encourage female employees to tap on SkillsFuture to acquire relevant skills.

“A lot of companies have started to embrace SkillsFuture but can we skew women to more technical programmes, rather than just the generic ones?”

Apart from that, MGI’s study called for investments to shift attitudes towards the role of women in society and in the workplace.

“Without effort on this front, further advances will be hard to achieve,” researchers said.

This can take the form of public awareness campaigns to foster recognition and redistribution of unpaid care work, as well as forums for corporate leaders to share best practices on gender equality.

COST OF GENDER INEQUALITY FOR ASIA-PACIFIC

Across Asia-Pacific, progress in gender equality has similarly been made over the past decade on the back of economic development, government measures, technogloy, market forces and activism. 

But countries remain varied in their advancements. For instance, while the Philippines, New Zealand and Singapore have done well in promoting gender equality at work, the same cannot be said for countries like Japan, India and South Korea. 

Women also have low representation in leadership position. In Asia-Pacific, there is only one women in leadership positions for every four men. 

As such, the report said policies to improve women’s equality in Asia-Pacific could add US$4.5 trillion to the region’s collective GDP by 2025 - a 12 per cent increase from a business-as-usual scenario. 

“From an economic perspective, trying to grow without enabling the full potential of women is like fighting with one hand tied behind one’s back,” the report said. 

“Already a powerful engine of global growth, pursuing the goal of gender parity can lift many more women out of poverty, unleash the economic potential of many others, and reinforce the region’s dynamic growth story.” 

Key factors for this growth potential include increasing women’s participation in the workforce (60 per cent), as well as getting more females involved in higher-wage jobs (25 per cent) and full-time work (15 per cent).

Source: CNA/sk(ms)

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