Employment, Earnings and Wealth: Trends and Outlook for Women in the Canadian Economy

Social arguments in favour of gender equality abound. But the economic arguments are no less compelling. Canada simply cannot afford to waste productive human capital. Increasing labour force participation of women—who are more highly educated than men on average—is a key component to optimize utilization of human capital. Like diversity in general, gender diversity in the workplace and management has been associated with greater innovation, superior productivity growth and higher profits.

• Participation in the labour force among prime-age women has grown from 76% to 86% over the past three decades and is even higher in Quebec (89%) thanks to subsidized universal childcare. We expect to see the rest of the country catch up as childcare programs announced in the 2022 federal budget roll out. Our calculations show that bringing women’s national employment rate up to match Quebec’s by 2030 could add nearly 350,000 jobs and could boost the level of real GDP by as much as 1.5% by the end of the current decade.
• Despite being highly educated, Canadian women face a larger gender wage gap than most of their Organisation for Economic Co-operation and Development (OECD) peers. Canadian women earn an average of 17% less than men—and the difference is even more stark for immigrant and Indigenous women.
  
• The “mommy tax” is steep and persistent. Research has found that moms earned about 20% less than dads and women without kids, even 10 and 20 years after childbirth. Our aging population could further impact women’s careers as women are more likely to take on unpaid caregiving work for elders.
  
• Women entrepreneurs are still a minority, but there’s an opportunity for more women to take the reins as businesses are handed down to the next generation and baby boomers retire.
  
• Only 87 women are promoted to manager for every 100 men. This gender disparity in early promotions leaves a “broken rung” with fewer and fewer women available to promote to director and higher positions. Across all management positions in Canada, the share of women has declined slightly over the past decade, falling below 36%.
  
• These factors combine to impact their senior years, with women’s retirement income stuck at about 70% of men’s since the late 1970s. Not only are women less able to put funds aside before retirement, but with a longer average lifespan, they need to make the funds last several more years.
  

Additional progress in certain key areas where gender gaps persist would help ensure a more prosperous future for Canada given its demographic and productivity trends. Organizations and policymakers should focus on decreasing the earnings cost of flexibility and maternity. They should also ensure that jobs critical to the digital and green transitions are gender-diverse, removing bias at multiple levels, including business financing and management pipelines, while implementing childcare and eldercare programs that are effective and affordable.