Women in the workforce: Analyzing the gains and gaps

Episode Summary

Executive Summary: The episode revisits Womenomics 25 years after Kathy Matsui’s original thesis, showing major gains in female labor participation, pay, and leadership across many countries, though progress remains uneven. Sharon Bell highlights policy, childcare, and cultural shifts as drivers; Asahi Pompei adds that women entrepreneurs still face capital, mentorship, and structural barriers, making targeted public and private action essential.

Main Topics: Womenomics and the 'quiet revolution' in labor participation (Priority: 5/5): Sharon Bell argues that female workforce participation has risen dramatically over 25 years, especially in Japan and several developed markets, but the change has been underappreciated. Policy changes behind Japan’s progress (Priority: 5/5): Japan’s gains are linked to labor-policy reforms, childcare support, overtime limits, disclosure requirements, and incentives for firms that advance women. Global patterns and the U.S. comparison (Priority: 4/5): Female participation has increased globally, but more slowly in emerging markets; Europe has overtaken the U.S. in participation, while the U.S. has largely flatlined. Pandemic effects and flexible work (Priority: 3/5): The pandemic initially threatened women’s participation due to caregiving burdens and service-sector exposure, but remote/hybrid work and recovery in services mitigated long-term harm. Gender pay gap and remaining inequality (Priority: 5/5): Pay gaps have narrowed in most OECD countries, yet remain double-digit in many major economies and are not fully explained by occupation or hours worked. Women in leadership and corporate boards (Priority: 4/5): Women’s representation among CEOs and senior leaders has improved sharply from extremely low levels, but women still remain a small minority in top corporate roles. Women entrepreneurs, financing, and structural barriers (Priority: 5/5): Asahi Pompei outlines how women-owned businesses drive job creation, yet face a persistent credit gap, smaller networks, limited mentorship, and unpaid care burdens.

Key Arguments: Female labor-force participation has risen substantially in Japan and other developed economies, making the transformation real even if it has been less visible than headline reforms suggest. Japan’s policy package—shorter working hours, childcare support, free preschool, overtime caps, disclosure rules, and tax incentives—helped create conditions for women to enter and stay in work. The U.S. is no longer clearly leading on female participation; countries such as Germany, the UK, and Japan have caught up or overtaken it, though work-hour differences complicate direct comparisons. Lower participation rates can be misleading because many European women work part time; total hours worked and job structure matter when comparing countries. The pandemic disproportionately burdened women at first through caregiving and service-sector exposure, but remote work and sector reopening reduced the chance of lasting damage. Gender pay gaps have narrowed but remain stubbornly high; some of the gap reflects occupation and hours, but not all of it is explained by those factors. Women’s presence in top leadership has improved from near-total male dominance, but CEOs and boardrooms are still overwhelmingly male. Women entrepreneurs are an underrecognized engine of growth and innovation, yet they face a $1.7 trillion credit gap and weaker access to customers and mentorship. Targeted policies and private-sector action are needed because broad prosperity does not automatically lift women-owned businesses. Internal corporate accountability matters: Goldman Sachs says it is using aspirational goals, tracking, and transparency to improve representation in senior ranks.

Data Points: Female workforce participation in Japan: roughly 50% to 75% - Sharon Bell says Japan moved from about half of women participating in the workforce to three quarters in one generation. Women’s share of additions to Italy’s workforce: all additions for the last 20–30 years - Bell says Italy’s workforce growth has come entirely from women joining; without them, the labor force would have been flat or shrinking. Female labor-force participation gap in Japan pay/participation policies: 2009 - Bell cites 2009 as the year shorter working hours became obligatory in most professions to help reduce long-hours culture. Female participation in the U.S.: basically flatlined - Bell says U.S. women’s participation has not risen much compared with other developed economies. Part-time work among women in Germany: 50% - Bell notes that about half of German women work part time, affecting comparisons with the U.S. Part-time work among women in the U.S.: 25% - Bell compares U.S. women’s part-time rate with Germany’s to show differences in aggregate hours worked. Gender pay gap in Japan: 30% to 21% - Bell says Japan’s pay gap fell from about 30% twenty years ago to 21% now. Gender pay gap in the U.S.: 20% to 17% - Bell says the U.S. gap narrowed only modestly over 20 years. Gender pay gap in France: about 15% to high single digits - Bell cites France as having cut its gap roughly in half. Women CEOs in S&P 500: 9% - Bell says women now hold 9% of CEO roles in the S&P 500. Women CEOs in S&P 600: 7% - Bell gives the share for smaller U.S. listed companies. Women CEOs in large listed Japanese companies: 1% - Bell says Japan remains especially male-dominated at the CEO level. Women-run companies globally: 1 in 3 - Pompei says one in three companies globally is run by a woman. High-growth companies run by women: 25% - Pompei cites women leading a quarter of high-growth firms worldwide. Women intending to open a business: 1 in 6 - Pompei says one in six women say they intend to start a business. Gender credit gap: $1.7 trillion - Pompei describes a large financing shortfall for women entrepreneurs. Mentorship impact in 10,000 Women: over 90% mentor women in their communities - Pompei says program graduates create a substantial local ripple effect. Black women businesses are solopreneurs: 96% - Pompei says most Black women-owned businesses in the data are single-person operations. Failure rate for those businesses: 97% - Pompei says 97% failed within three years, motivating Goldman’s Black in Business effort. 10,000 Women participants served: over 200,000 - Pompei says the program has reached more than 200,000 women globally. 10,000 Women program age: 16th year - Pompei says the initiative is in its 16th year. Goldman Sachs partner MD promote class women share: 29% - Pompei says the latest partner/MD promote class had the largest number of women ever. Goldman Sachs executive MD class women share: 31% - Pompei cites this as evidence of internal progress.

Pivotal Quotes: "I think it's that the progress has been so stunning, even if people don't realize it, which is partly why I called it the quiet revolution." — Sharon Bell: Bell explains the central thesis of her Womenomics 25 Years report. "Women and small business owners are the hidden engines of job creation, growth, and innovation." — Asahi Pompei: Pompei summarizes why women entrepreneurs matter economically. "The notion that a rising tide lifts all boats does not happen." — Asahi Pompei: Pompei argues for targeted policies rather than broad, undifferentiated solutions.

Implications: Female participation, pay, and leadership have improved, but the remaining gaps are large enough to warrant policy, employer, and investor action. The biggest upside now lies in childcare, flexibility, capital access, and targeted support for women entrepreneurs.