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Women represent 49.6 per cent of the world’s population and 40.8 per cent of its work force, according to the World Bank.isuaneye/Getty Images/iStockphoto

There's more to Canadian economic policy than fiscal prudence and competent banking regulation.

In 1995, about 68 per cent of Canadian women were in the work force, roughly equal with the United States. A decade later, the U.S. rate had barely changed. Canada, on the other hand, was doing its best Nordic impression: Almost 74 per cent of women were working, a level that put it on par with Sweden, Finland and the other darlings of progressive social policy.

The shift didn't go unnoticed. Evridiki Tsounta, an economist at the International Monetary Fund, concluded that the jump was more than an accident. Governments changed tax laws that punished two-income households. There also was a wave of spending on early-childhood education and daycare that had the effect of creating time for stay-at-home parents – almost entirely mothers – to become income-generating economic actors.

Canada's experience is important because the world is desperate to generate more economic growth. A critical mass of research suggests greater gender equality can achieve just that. Governments need only get serious about it.

Growth came easily for a couple of decades as several once-in-a-lifetime factors converged to create the mother of all economic tailwinds. They include globalization, financial innovation, China's emergence as the world's second-biggest economy and the postwar addition of women to the labour force.

In his book When the Money Runs Out, HSBC chief economist Stephen King argues that the world should take seriously the possibility of a "stagnation trap." All the good luck of the past couple of decades has been used up, and fiscal and monetary stimulus are spent forces, Mr. King says.

One can disagree with Mr. King that the possibility of a dystopian future should be taken seriously. There's little denying that his central theme is correct: The globe's potential to generate wealth is no longer what it was.

The IMF says the world's gross domestic product will grow 4 per cent in 2014, a nice increase from 3.3 per cent this year, but well shy of the growth that was produced before the financial crisis. Between 2004 and 2007, the global economy expanded an average of 5.1 per cent a year. The IMF sees an annual growth of no more than 4.5 per cent through 2018.

That's why Heidi Crebo-Rediker, chief economist at the U.S. State Department, last month delivered a nearly 45-minute lecture on the importance of finally making women equal partners in the global economy.

"The bottom line is there are limited options out there when we are looking for sources of growth," Ms. Crebo-Rediker told me in an interview in her office at the State Department. "In order to do what we need to do, it's imperative to look at all sources of growth. A lot of research shows that greater inclusion of women in the labour pool is low-hanging fruit."

Women represent 49.6 per cent of the world's population and 40.8 per cent of its work force, according to the World Bank, the anti-poverty lender. Yet gender inequality hardly unique to the developing world, where women often are held back by tradition and patriarchal legal systems.

Barely 50 per cent of Italian women participated in the labour force in 2011, compared with 70 per cent of men, according to the World Economic Forum. Closing the gender gap in the 34 rich countries that make up the Organization for Economic Co-operation and Development would generate wealth the equivalent of 12 per cent of GDP over the next two decades, Ms. Crebo-Rediker told her audience at the Peterson Institute for International Economics.

There is a movement afoot to cast gender as an economic issue, rather than simply a matter of fairness. Ms. Crebo-Rediker says the State Department has observed that officials from paternalistic societies tend to shrug at the moral arguments for granting women fair access to the labour market. But point out the correlation between gender equality and economic growth, and they perk up.

Ms. Crebo-Rediker thinks "mainstreaming" that idea would have noticeable results. She wants policy makers to think about helping women get credit the same way they way they think about infrastructure spending. "It really is the next frontier," she said.

The IMF is leading the charge. The fund's managing director, Christine Lagarde, makes a point of talking about gender equality as an economic issue. More and more, the IMF is calling on its member countries to address failings related to women. (In its latest review of Italy's economy, for example, the fund said the government should lower tax rates on second-earners to create an incentive for spouses to seek employment.) The World Bank and the OECD also have isolated gender discrimination as a barrier to economic growth.

Private lenders such as Goldman Sachs Group Inc. and Bank of Montreal also are studying the issue, suggesting a realization that women are growing force in the economy.

Canada's great leap in gender equality now is almost a decade old. The percentage of women in the labour force has changed little since then.

Making further gains will be harder, but surely not impossible. Canada did adopt subsidized maternity/paternity leave for a year. Research shows such programs have a negative correlation with women's labour participation rates. Policy matters.