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A look at the Forbes list of the world’s billionaires lays out a stark disparity: none of the top 10 richest people worldwide are women.

That reflects underlying issues that cover both stereotypes and policies: we as a society have decided that risk-taking and competition are both “masculine,” and that those traits are what we are going to reward with financial success. But a world where risk-taking and competition weren’t considered quite so admirable or so male, and where more stereotypically “feminine” traits like cooperation were properly recognized and rewarded, would be better for both women and men.

The formal labor force remains predominantly male worldwide. But the most striking gender gaps are in business leadership and innovation. Across the world, less than one in five formal enterprises are managed by a woman. Women account for only 21 percent of the boards of directors of businesses in progressive countries; the numbers are far lower elsewhere. Looking at innovation, women accounted for about 10 percent of patent authorships worldwide. And, finally, the very top of the global economy is still overwhelmingly a men’s club. In Forbes’ listing of the world’s billionaires only 244 out of 2,153 are women.

This labor force gap is a global problem: World Bank Enterprise Survey data suggests that among high-income OECD firms, the proportion of women-managed firms is below the global average at just 15 percent. And while 50 percent of Chinese patent applications include a female inventor, only 29 percent do in the US. 

Prevailing gender norms limit women’s opportunities

These gaps don’t exist because women make bad business leaders. Firms managed by women are as profitable as firms run by men in the same sector, but Enterprise Survey data suggests women tend to set up firms in low-capital sectors where there is greater flexibility in hours worked and timing. (Capital-intensive firms like factory operations have to be run long hours to recoup the costs—an idle factory is wasted investment.) And that will be related to the fact that women still do most of the unpaid household work

And the low share of patents authored by women doesn’t exist because women “can’t do science”: fully 57 percent of biotech patent applications worldwide include a woman inventor. Instead, men dominate high-patent areas of science. Women account for just one fifth of engineering and computer science degrees in the United States, for example.   

When they have the opportunity to innovate or lead in the market, women are quite as capable as men. But gender norms push against those opportunities across the world of work. For example, when asked “if jobs are scarce, do men have more right to a job than women?” Only 61 percent of men in the United States disagree, alongside just 77 percent of women. The numbers are considerably worse in many developing countries. Other norms that can disadvantage women in the workplace are expressed by women themselves: across many countries, women on average have a substantially lower self-reported preference to enter competitive situations than men—although evidence regarding real-life behavior around risk is both more varied and more nuanced

And while the stereotype suggests that women shouldn’t or won’t take market risks, society has created an economic system that richly rewards risk-taking through patents and bankruptcy laws alongside bailouts for big financial institutions. All of these interventions in the marketplace ensure huge payouts for people who make the right call on a new innovation by granting them a monopoly to exploit it (like the world’s richest man, Jeff Bezos), or who gamble successfully in stocks (like the world’s third richest man, Warren Buffett), or who use bankruptcy protection to force others to pay for their mistakes (like the world’s most powerful man, US President Donald Trump). 

There are broader costs to these rewards to risk. Take finance: the top jobs in banks (filled overwhelmingly by men) are given bonus payments that are based on their total investment returns with little or any accounting for the risk taken in generating those returns. When the risks turn bad and banks start defaulting, the public pays the costs. And those costs are huge: in a paper for the National Bureau of Economic Research, economists Carmen Reinhart and Kenneth Rogoff suggest that paying for bank bailouts to get the economy back on track creates an average 86 percent rise in government debt.

Shifting attitudes and norms to empower women

None of this is inevitable. Attitudes aren’t driven by biology, but rather by social norms. And even to the extent women in some (often experimental) contexts take fewer risks, those contexts can change. While there is a 71 percent gap between girls and boys in co-ed schools in the UK in terms of taking a more risky option in a bet, girls in single-sex schools are equally as likely as their male peers to take risky options. And women born in Beijing in 1958 are both significantly more competitive than women in Taipei and as competitive as their male peers—perhaps explained by the fact that the women in Beijing in the late 1950s had the most exposure to the Cultural Revolution and its focus on gender equality.

Societal attitudes need to shift so that women are equally empowered to take reasonable risks, and competition isn’t seen as masculine. As important, there is work to be done on norms around men. The same surveys that suggest women are usually less competitive also suggest they are more cooperative and less likely to take advantage of the work of others. Everyone would be better off if men around the world caught up on those characteristics—both in the workplace and at home.   

And policymakers should also revisit subsidies, banking and corporate safety nets, and intellectual monopolies including patents to better sustain economic growth overall. Society provides excessive returns to risk and competition while downplaying the economic importance of cooperation and collaborative solutions. A world where competition and cooperation were more equally rewarded and men and women felt equally empowered to take both approaches would be a richer, fairer, and less frustrating one for all.

Disclaimer

CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.