LONGSTANDING global societal and business inequities have disproportionately affected wealth accumulation for women. Despite an increased focus of business leaders on diversity, equity and inclusion (DEI), and gender equity in particular, women worldwide are expected to have significantly lower accumulated wealth than men at retirement.
According to a new global Wealth Equity Index report from WTW in collaboration with the World Economic Forum, women upon retirement are expected to have only 74% of the wealth that men have.
While boards of directors, companies and governments worldwide have acknowledged career gender inequities such as the gender pay gap and the under-representation of women in board and leadership roles, and are making progress to narrow these inequities, more progress is needed.
Additionally, these inequity drivers – and the corresponding actions to narrow them – are often considered in isolation of one another, and actions taken do not measure or address outcomes.
By providing a holistic view of disparities, across women’s working lifetimes and consistently measuring wealth at the end of their careers, the new global Wealth Equity Index illustrates how women are disadvantaged throughout their working lifetime.
The model projects the expected outcomes for women along with the key drivers – and will help drive actions from the public and private sectors to address the specific factors causing inequitable outcomes.
The new metric models wealth inequity for women and calculates a wealth index for 39 countries worldwide. For each country, it establishes a value between 0 and 1 that represents the ratio of female to male accumulated wealth at retirement.
The model projects wealth accumulation during a career life cycle – incorporating state and mandatory benefits, employer-sponsored retirement plans, real estate and personal savings.
This quantifiable measure is critical for assessing accumulated wealth outcomes and ultimately illustrates how women are cumulatively disadvantaged throughout their working career.
Key findings from the new Wealth Equity Index:
1. The average global Wealth Equity Index across the 39 countries included in the analysis is 0.74.
This means that upon retirement women will only accumulate 74% of the wealth that men have. With the country indices ranging from 0.60 to 0.90, we see a significant variation of gender wealth equity within individual countries.
2. Primary drivers contributing to gender-based wealth disparity include gender pay gaps and delayed career trajectories.
Additionally, gaps in financial literacy and responsibilities outside the workplace (e.g., child and elder care) influence women’s participation in paid employment and therefore their ability to build wealth.
3. Women in senior positions have the largest gaps in accumulated wealth.
The index considers different roles to measure the impact of gender on wealth accumulation across different career paths. For frontline operational roles, the overall gender wealth gap averages 11%; for professional and technical type roles, the gap nearly triples, averaging 31%; and for senior experts and leadership, it grows further to an average of 38%. Wealth inequity is greatest for women in senior expert and leadership positions as they face the compounded effect of greater pay gaps and more limited career progression.
4. Caregiving has a negative impact on women’s ability to accumulate wealth.
Caregiving responsibilities leading to part-time work and career breaks affect women disproportionately compared to men, as they lower their rate of workforce participation and time spent employed. Such gaps in wage earning have the knock-on effect of lower wealth accumulation at retirement. Structural differences in statutory leave provisions related to childcare exacerbate the gender inequities.
5. Retirement plans are a significant component of accumulated wealth.
All 39 countries included in the wealth index provide state retirement benefits, and some provide mandatory retirement benefits. Employer-sponsored plans are also prevalent.
The index revealed the importance of employer-sponsored plans – and the impact that pay inequity between genders, delayed career progression, caregiving and financial literacy have on wealth at retirement. Women typically have lower financial awareness, investor confidence and risk tolerance throughout their careers, resulting in a compounding effect on their wealth.
The Wealth Equity Index clearly illustrates a global inequity in wealth accumulation for women at retirement and the need for focused efforts from individuals, governments and businesses to close this significant gap.
Providing an objective metric showing gender wealth inequity at retirement and the intermingled drivers for the gap, the index gives a momentum for action and sets a baseline to track future progress.
What's the World Economic Forum doing about the gender gap?
Purpose-driven leadership and programmes, equitable total rewards (pay, benefits, careers) and flexible work approaches, comprehensive social infrastructure, equitable provisions for family leave and accessible financial instruments and education will help narrow the gap.
World Economic Forum
Sun Jul 17 2022
Wealth equity index and gender gap: Women experience cumulative disadvantages in their working careers, leading to less wealth at retirement. - Filepic
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.
NFOF will be operational in November 2024 with funding of RM1 bil
PM Anwar Ibrahim said NFOF will support venture capital fund managers to invest in startup companies with RM300 million set aside for 2025.