5 key findings from the new global Wealth Equity Index
Longstanding global societal and business inequities have disproportionately affected wealth accumulation for women. Despite an increased focus of business leaders on diversity, equity and inclusion (DEI), and gender equity in particular, women worldwide are expected to have significantly lower accumulated wealth than men at retirement. According to a new global Wealth Equity Index from WTW in collaboration with the World Economic Forum, women upon retirement are expected to have only 74% of the wealth that men have.
While boards of directors, companies and governments worldwide have acknowledged career gender inequities such as the gender pay gap and the underrepresentation of women in board and leadership roles, and are making progress to narrow these inequities, there is more progress needed. Additionally, these inequity drivers – and the corresponding actions to narrow them – are often considered in isolation of one another, and actions taken do not measure or address outcomes.
By providing a holistic view of disparities across women’s working lifetimes and consistently measuring wealth at the end of their careers, the new global Wealth Equity Index illustrates how women are disadvantaged throughout their working lifetimes. The model projects the expected outcomes for women along with the key drivers – and will help drive actions from the public and private sectors to address the specific factors driving inequitable outcomes.
The new metric models wealth inequity for women and calculates a wealth index for 39 countries worldwide. For each country, it establishes a value between 0 and 1 that represents the ratio of female to male accumulated wealth at retirement. The model projects wealth accumulation during a career lifecycle – incorporating state and mandatory benefits, employer-sponsored retirement plans, real estate and personal savings. This quantifiable measure is critical for assessing accumulated wealth outcomes and ultimately illustrates how women are cumulatively disadvantaged throughout their working career.
The Wealth Equity Index clearly illustrates a global inequity in wealth accumulation for women at retirement and the need for focused efforts among individuals, governments and businesses to close this significant gap. Providing an objective metric showing gender wealth inequity at retirement and the intermingled drivers for the gap, the index gives a momentum for action and sets a baseline to track future progress.
Purpose-driven leadership and programs, equitable total rewards (pay, benefits, careers) and flexible work approaches, comprehensive social infrastructure, equitable provisions for family leave, and accessible financial instruments and education will help narrow the gap.