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Narrowing gender salary gap 'could boost UK economy by more than £600bn'

Published 29/09/2016

The findings underscored the benefits of putting gender pay on an equal footing, researchers said
The findings underscored the benefits of putting gender pay on an equal footing, researchers said

Narrowing the yawning salary gap between men and women could bolster the UK economy by hundreds of billions of pounds, a report has revealed.

Research by McKinsey Global Institute found that more than £600 billion, or 26%, could be pegged on to gross domestic product (GDP) in 2025 if women and men played an identical role in the UK labour market.

The British economy could even benefit from a more modest rise of £150 billion in the period if all areas of the UK matched the performance of the fastest-improving region over the past decade.

The move would be enough to add 840,000 female workers to the labour market in 2025.

Vivian Hunt, UK managing partner of management consulting firm McKinsey & Company, said the findings underscored the benefits of putting gender pay on an equal footing.

"R ealising economic benefits will mean addressing significant gender inequality in society and in attitudes, as well as in work.

"Gender inequality is a national problem that requires targeted, national solutions."

The pay gap between men and women has been exacerbated by more women working in low-pay jobs and in less productive sectors of the economy, the report said.

If Britain continued at current levels it would not achieve parity between men and women within the next 30 years.

The new data suggested women generated 39% of Britain's GDP despite making up 51% of the working age population.

It comes after a separate report published on Saturday said Britain's gender pay gap would not close until 2069 unless more women were encouraged to take up careers in industries such as science and engineering.

Research by accountancy giant Deloitte suggested that women should take advantage of technology-driven changes in the labour market by studying and working in areas like science, technology, engineering and mathematics (STEM), where pay was more balanced.

Deloitte's study showed that the hourly pay gap between men and women was closing at a rate of just 2.5 pence per year - with pay parity not expected until 2069.

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