America’s most powerful economist has a solution for slow growth: Get more women working.
If women worked at the same rate as men, the US economy would be 5% bigger, according to Federal Reserve Chair Janet Yellen, who cited a 2012 study.
“We, as a country, have reaped great benefits from the increasing role that women have played in the economy,” Yellen said Friday at Brown University, her alma mater, which is celebrating 125 years of admitting female students. “But evidence suggests that barriers to women’s continued progress remain.”
Yellen shed light on the legacy and challenges faced by women in the workforce.
Her chief point: America needs better policies to encourage more women to work full careers. Sustained careers could help narrow the gender wage gap and boost growth overall.
Women working full-time still earn about 17% less than men per week, Yellen said. Even when comparing men and women in the same job positions with similar backgrounds, the wage gap is 10%.
Yellen also warned that the US is falling behind other advanced economies in Europe. The rate of working women in the US economy — known as female labor force participation — ranks 17th out of 22 advanced nations.
What’s troubling is that female participation among those who could be working has declined since 2000. Participation of “prime age” women between 25 and 54 years old is at 74.7% today, down from its peak of 77.3% in 2000, though it did make progress last year.
Male participation is much higher at 88.8%.
Yellen argued that European economies are seeing more working women due to expanded parental leave policies, increased affordability of child care and more opportunities for part-time work.
Citing research, Yellen said if the US had such workplace policies as those in Europe, female participation could jump to 82% from 74.3%.
That would boost the economy, she argued.
“We cannot all succeed when half of us are held back,” Yellen said, quoting Malala Yousafzai, the Pakistani advocate for women’s education and Nobel Prize winner.