With the economic fallout from Covid-19 disproportionately hurting women, governments will need to step up gender equality efforts to repair damaged economies, Moody’s Investors Service says.
In a new report, the rating agency said its research on the links between gender metrics and credit risk revealed that narrowing gender gaps are correlated with an array of macroeconomic benefits.
The pandemic has widened that gap, as women lost jobs at a higher rate than men.
“Globally, employment loss for women was 5% in 2020, compared with 3.9% for men,” Moody’s reported, as female-dominated industries, such as retail and hospitality, have been among the hardest hit by physical distancing demands.
“With the economic crisis triggered by Covid-19 disproportionately affecting women, we expect louder calls in some countries for targeted steps to improve gender equality as part of economic recovery plans,” the report said.
Government efforts to improve inclusion have included measures to encourage female participation in the labour force through spending on schools and childcare, along with ensuring that their tax regimes don’t penalize dual-earner households.
Moody’s said its research indicates that the payoffs from greater inclusion of women in the labour force include a boost to economic output, “while their rising incomes support consumption and strengthen household finances.”
Additionally, greater workforce participation can help offset the negative economic effects of population aging, while expanding a country’s tax base.
At the corporate level, Moody’s also reported that companies with a larger percentage of female board members tend to have higher credit ratings.
“Our analysis of the board composition and ratings distribution of Moody’s-rated companies in Europe and North America suggests a correlation between board-level gender diversity and credit quality,” it said.
The rating agency said it views “the presence of women on boards — and the potential diversity of experience and opinion they bring — as a factor that contributes to good corporate governance.”
Given the benefits of greater equality, once the pandemic recedes, Moody’s said that “government and investor focus on gender inclusion will likely increase.”