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Economic Viewpoint

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

March 7, 2024
Florence Jean-Jacobs, Principal Economist • Kari Norman, Economist

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. 

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.