This measure can be compared in dollar values such as dollars earned by gender or in percentages such as participation rates in the workforce. When the values for the same financial indicator for different genders are on par, this indicates parity. In contrast, disparity occurs when the values aren’t equal. Some indicators used to assess gender parity in finance focus on workforce participation, income, pay raises, executive positions, debt levels, retirement savings, and net worth. For example, Q1 2022 data from the U.S. Bureau of Labor Statistics (BLS) data showed that men earned a $1,118 median weekly wage vs. just $937 for women. This means a woman made 83.8 cents for each dollar a man made.
How Gender Parity in Finance Works
Several cultural and socioeconomic factors can affect gender parity in finance. For example, cultural beliefs on gender roles can encourage or discourage employment for women or limit their access to certain job roles. This, in turn, can affect labor participation rates, wages, and representation in leadership positions. In addition, access to education can both affect a person’s lifetime earnings as well as their job opportunities. Developing countries, primarily developing countries, may have logistical challenges for women, such as a lack of safe transportation or affordable child care. For example, women who have trouble affording child care might not work at all or they may only be able to work part time. This is especially the case in cultures where men are seen as the primary earners in the family. In addition, gender discrimination in hiring, compensation, and promotion decisions can put someone at a financial disadvantage based on their gender. Discrimination can affect their potential income, job security, and advancement opportunities. Laws in some countries that prohibit workplace gender discrimination can positively contribute to equality.
Gender Parity Indicators in Finance
Gender parity numbers can underscore challenges that make it harder for someone to save money, pay off debt, and cover everyday expenses. Here are some everyday examples of gender parity in finance using different indicators. (Keep in mind that several factors may contribute to the disparities.)
About 68% of men aged 16 and older participated in the workforce vs. about 57% of women in early 2022, according to the U.S. Department of Labor (DOL). Women had 55% of the median net worth of men before adjusting the raw data in 2021, according to the Federal Reserve Bank of St. Louis. Lender Earnest found that its female loan applicants had an average net worth of $5,541 versus $12,188 for male loan applicants. Men had a debt level of $103,702 vs. $85,169 for women in Q2 2019, according to Experian.
Use of Gender Parity Indicators
You can look at data on gender parity for insight into how employment and financial conditions differ between genders. Governments and businesses can look at financial indicators by gender to make decisions that promote gender parity and then monitor their progress. For example, governments can pass laws to ensure equal pay and job access, so that people will be paid fairly for the same work. Government safety net programs that subsidize child care costs can make it easier for women to work. At the same time, government or company rules on paid parental leave can reduce the burden of parents losing income for time off after adoption or childbirth. In addition, policies that make education more accessible and affordable can help women train for higher-paying jobs. However, keep in mind that gender parity indicators alone don’t provide a complete picture of equality. For example, the gender differences in labor participation rates don’t address job quality differences. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
