The B(usiness)20 Taskforce on Employment and Education has been promoting female employment steadily over the past years. Among other things, it has recommended that, in order to close the gender gap,  governments and regulators should put in place policy frameworks that stimulate female entrepreneurship and labor market participation.

There are obvious and clear economic reasons for this. Significant talent challenges are looming in the next decade. In many countries and sectors, shortages of available talent are already being felt. Economic growth expectations coinciding with projected waves of retirement will make it increasingly difficult for employers to find, attract and retain scarce talent. And, worryingly, in this ‘war on talent’, society is underestimating and undervaluing half the population! Let me illustrate this by providing you with some data.

the male-female gap

In the G20 countries, female participation in the labor market is, on average, a staggering 26 percentage points lower than male participation. Of course, there are significant differences between countries, but there is not a single major country to be found where male and female participation are on a par. In Argentina, female participation stands at almost 60%, compared to 73% for males – a 13-point gap. In Brazil, the gap is ten points (62% versus 72%). In the US and several European countries, the gaps are smaller, but they’re still gaps. In the US, it’s 73% versus 79%, in Germany it’s 79% versus 83%, and in my home country, the Netherlands, almost 80% of women participate in the labor market, compared to 84% of the male population.

This male-female gap is also reflected in other labor market data. On average, women earn less than men. US Labor Department data show that women who work full-time on average have median weekly earnings that are 82% of their male counterparts. Recent UK data show that 78% of UK companies pay men more than women, with a median pay gap of 9.7% on average.

Regulation that promotes equal pay and equal opportunities has been around for some time in most of the countries just mentioned, but it still doesn’t pay off, apparently. Let’s dig a little deeper into some of the underlying causes and consider some solutions that might actually work. Some of the recommendations that the B20 taskforce may put to G20 leaders in order to really close the gender gap.

underlying causes

One underlying cause of the gap is education. Although in OECD countries women are overrepresented among tertiary graduates, they remain underrepresented in certain fields of study, such as science and engineering. And these are exactly the skills that guarantee good career options. Research shows that in Latin American countries the root cause of this lies in culture and gender stereotypes. Parents, it seems, are still more prone to picture their sons having a career in science, math and engineering rather than their daughters. My personal impression is that this is the case in the rest of the world as well, with China possibly being the only exception. We need to ensure that girls have good access to science and engineering studies, from a very early age. This would require a substantial improvement in educational standards, so that both boys and girls will be able to acquire the core competences needed. And, perhaps even more importantly, we need to address our own cultural norms.

Another underlying cause is the fact that woman are still over represented in informal employment, particularly in developing countries. And women are also over represented in part-time jobs. The latter issue may not be a problem if this is by choice, as it seems to be in the Netherlands, where 80% of females work less than 35 hours a week. But more often than not, the root cause here lies in the difficulty of combining work and care. In their economically most productive years, women are often ‘sandwiched’ between raising their children and taking care of their elderly parents. In my view, society needs to invest more in improving supportive mechanisms for these women, such as daycare centers that are within reach, affordable and have long, flexible opening hours. 

Another key investment of governments and regulators in the labor market that would promote female employment would be to create more formal job opportunities for women. These opportunities do not necessarily mean ‘standard’ open-ended full-time jobs, but rather a broader choice of diverse forms of work that are all well regulated. A diversity of work contracts allows companies to react adequately to market changes and quickly create new jobs. At the same time, it allows workers (both male and female) to live and work in accordance with their personal situation and preferences. Diverse forms of work, such as agency work and fixed-term contracts, are often a stepping stone to the formal economy. There is a clear positive correlation. Restrictions on these formal flexible forms of work are therefore counterproductive when it comes to creating more – and more decent – jobs in the formal economy. In the future of work, the people’s career paths will be less linear. Ideally, we’ll not only have more jobs, but also more diversity in types of contracts and employers. 

Of course, at the micro-economic level, many employers already recognize the significant benefits of having more women in leadership positions, and they’re implementing diversity initiatives that improve hiring strategies and close the gender gap. I suggest that one highly useful task that could be carried out by the B20 Employment and Education Taskforce will be to draw up an inventory of these best practices to show circumstances and factors that promote the participation of women in the labor market. To be continued!

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