Business Case for Closing Gender Gaps Presented at Harvard Kennedy School Conference

October 25, 2010
by Doug Gavel

New and compelling evidence documenting the economic benefits of gender equality took center stage at a recent two-day conference Oct. 15-16 at Harvard University. "Closing the Gender Gap: The Business Case for Organizations, Politics and Society," hosted by the Women and Public Policy Program (WAPPP) at the John F. Kennedy School of Government in collaboration with the World Economic Forum and the Council of Women World Leaders, brought together scholars and business leaders from across the globe.

"Unequal rights to work, political participation, education and health violate human rights and may also negatively affect societal development, political outcomes and corporate performance," said Iris Bohnet, professor of public policy at Harvard Kennedy School (HKS) and director of WAPPP. "WAPPP is defining a new research agenda based on the economic value of gender diversity. An efficiency lens opens a new perspective on the issue – it is no longer only about constraints but also about missed opportunities; not only about rights but also about returns; not only about sameness about also about difference, benefitting from women’s and men’s comparative advantages that can make everyone better off."

Conferees presented evidence on a range of topics to advance the business case for closing gender gaps. Some of the more compelling findings included:

  • Development: The returns on investment in women can be higher than on investments in men because women tend to have preferences and make choices more aligned with general development goals, such as decreasing the number of children or spending income on children’s nutrition, Mayra Buvinic of the World Bank showed. At the same time, Professor Abhijit Banerjee of MIT reminded the audience that microfinance has likely been overrated in its impact on poverty alleviation and the empowerment of women.
  • Politics: Women politicians provide more public goods that women care about and that are also aligned with general development goals, Professor Esther Duflo of MIT argued. For example, women village leaders in India focused more on the provision of clean water than men.
  • Education: The gender gap in education has reversed with women now being better educated than men in many countries. Thus, the opportunity cost of not hiring and retaining talented women has increased. Business has more incentives than ever to design organizational practices inclusive of women. For example, Ricardo Hausmann, professor of the practice of economic development at HKS, discussed evidence on the impacts of the reversal of the gender gap in Latin America on women’s labor force participation and other societal developments, such as marriage patterns. In particular, he highlighted the need for making work compatible with motherhood.
  • Demography: Due to demographic change, the current fertility rates in developed countries in particular imply that the labor force is shrinking. Competition for talent is stiffer than ever, and closing gender gaps in economic opportunity is paramount to replenishing the labor force. Lara Warner of Credit Suisse and the Harvard Kennedy School’s Women’s Leadership Board described the demographic change as a “demographic tsunami.”
  • Diversity: There is strong evidence for a diversity premium, with diverse teams performing better than homogenous teams, research by Professor Scott Page of the University of Michigan demonstrates. However, diverse teams also “mean work”, as Associate Professor Katherine Philips of the Kellogg School of Management reminded the conference participants. Remarks offered by representatives of Carlson, Credit Suisse, Daimler, Deloitte, Deutsche Telekom, Exxon Mobil, Goldman Sachs, Heidrick&Struggles, McDonalds, Pfizer, and Temin and Co. emphasized that corporations increasingly take these benefits seriously and create organizational structures to enable diverse teams to live up to their potential. Indeed, diversity in senior management is related to organizational performance, the research by Assistant Professor David Ross of Columbia Business School showed. Gender equality nudges, a concept developed by Bohnet, help organizations become more diverse.

More information can be found on the conference website.

Drew Faust and Iris Bohnet

Harvard University President Drew Faust (left) with Iris bohnet, director of WAPPP. Photo credit, Martha Stewart.

Iris Bohnet (left) and Davia Temin, Temin and Company.

Iris Bohnet (left) and Davia Temin, Temin and Company. Photo credit, Martha Stewart.

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