Economic benefit to increasing women's employment rate - report

Closing the gap between men and women's employment rates could improve New Zealand's GDP by 10%, a new report has found.

Closing the gender gap: plenty of potential economic upside was released by investment bank Goldman Sachs today, ahead of a Tasman Business Circle meeting on in Auckland on August 25 that will look at how to increase women's participation in the economy.

However, employment rates are not the only noticeable disparity that exist across the sexes, the report said.

“A large gulf exists in the average level of male and female productivity growth in New Zealand.

“We believe this has nothing to do with the relative educational achievement or work experience of the sexes.”

Instead, it found that women, particularly younger women, were on average more highly educated than their male counterparts.

“We feel it is the result of the tendency for females to be employed in community based sectors of the economy, where outputs can be more difficult to measure and output itself may not necessarily be the biggest economic priority, and disincentives them to remain in the workforce.”

The report called on the government to take a proactive approach to closing some of the gaps as there were significant economic benefits to be gained, at a time when the country was about to embark on a massive reconstruction project to rebuild Christchurch.

“Without any change, earthquake reconstruction will absorb a massive amount of resource for this small country and potentially act as a handbrake on other sectors,” the report said.

“Unlocking a pool of highly educated labour in conjunction with a lift in female productivity performance could lift the country's speed limit before capacity constraints are reached.

“All else being equal, this will potentially reduce the extent that the [Reserve Bank] needs to tighten monetary policy in the future and therefore take some pressure off the $NZ to appreciate.”

Potential policy initiatives it called for included finding ways to encourage highly educated women to work in sectors outside their traditional areas, look at ways to encourage women to stay in the workforce and minimise issues such as childcare costs and high effective marginal marginal tax rates for women on family assistance that deter them from re-entering the workforce.