How Women Could Solve the Aging Worker Problem

By: Anneken Tappe · July 10, 2024 · Reading Time: 2 minutes

Female Force

Advanced economies around the world are seeing demographic change: As fewer babies are born, and older workers retire, working-age populations are growing more slowly or even shrinking, leading some economists to predict that labor shortages are here for the long-haul.

But a new Goldman Sachs (GS) report reveals what might help offset this trend: increasing the number of working women.

Policy Progress

Over the past 25 years, women’s workforce participation in the labor force has increased in most developed economies, and it’s already helping to offset labor shortages. The report suggests working women are the reason why Italy’s workforce grew rather than shrank in recent decades, for example.

But to sustainably increase the share of women in the workforce, governments need to invest in family-friendly policies to support those women who are unable to join the labor force due to care responsibilities.

In Japan, the government has expanded its childcare programs in recent years, while mandating a set number of female executives at major companies, per the report. Japan showed the sharpest rise in women’s labor participation rates of all countries in the report, surpassing the U.S.

Workforce Parity

While this trend is promising, there is still more work to be done.

Looking some 35 years into the past, the U.S. was a leader in women’s workforce participation. But as its peers caught up, the share of working American women has held relatively flat since 1991.

Meanwhile, significant pay gaps and the motherhood penalty persist, particularly in high-paying jobs and older age groups. Women’s share of unpaid work is also substantially higher than men’s across countries.

One bright spot is this: The number of female CEOs in the S&P 500 has doubled over the last five years, while 40% of board members in Europe are now women, per the report.

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