MEN like to believe that they run the world. They are not deluding themselves. In politics, men still dominate most of the planet's governments and legislatures. In economic life, they rule its boardrooms and have most of the best-paid jobs. Women, meanwhile, do by far the greater part of the world's unpaid work. Granted, some details of the canvas are changing: women's share of the workforce is much higher than it was a generation ago, and they comprise the majority of university students in some countries. Nevertheless, it is still a man's world.

And a wasteful one. Were more women in paid employment, according to a run of recent studies, the world would be better off. The waste is surely worse in poor countries than in rich ones. A report this week by the United Nations Economic and Social Commission for Asia and the Pacific concludes that sex discrimination costs the region $42 billion-47 billion a year by restricting women's job opportunities. A gap of 30-40 percentage points between men's and women's workforce participation rates is common. The poor state of girls' education costs a further $16 billion-30 billion. And those are just the economic costs, before violence against women and access to health care are counted.

But rich countries undervalue women as well. Just look at the gap between male and female employment rates in America, Japan and western Europe, as Kevin Daly, an economist at Goldman Sachs, does in a recent study (see the left-hand chart). In Sweden, where around 70% of females aged 15-64 are in work, the gap is less than five percentage points. In America and Britain it is around a dozen points. In Italy, Japan and Spain it is over 20 points. Suppose, says Mr Daly, that women's employment rates were raised to the same level as men's; and suppose that GDP rose in proportion with employment. Then America's GDP would be 9% higher, the euro zone's would be 13% more, and Japan's would be boosted by 16%.

That may be a bit of an overstatement. Add so many people to the workforce and average productivity would probably fall. Given the chance to work, many women may do so part-time rather than full-time; some men with working partners may make the same choice. Nevertheless, the boost to GDP would still be substantial. Mr Daly notes that were euro-zone productivity raised to American levels—a commonly cited idea—the single-currency club's GDP would rise by only 7%.

You might object that looking at GDP itself overstates the benefits. With more women in work, some of what they now do unpaid—caring for children, cleaning, preparing meals—would be bought in. So some work would be counted, and added to GDP, simply because it was supplied in the market not the home. True, says Mr Daly, but only to a limited extent. Pay in child care tends to be low, so the offsetting factor is not very great. Even in Sweden pre-school care accounts for only 1.2% of GDP, a small sum compared with the gains on offer.

A taxing question

None of this would matter much if low female employment rates and the output forgone were purely a matter of choice. Mr Daly argues that they are not. Many women would like to work, or to work more, if they could find affordable child care; subsidies for child care, not surprisingly, tend to raise the probability that a mother returns to work. And in many countries, second earners (usually women) face higher average tax rates than the main breadwinner. In Sweden, an exception, average tax rates are the same; in Italy and Spain second earners' rates are 60% more than their partners'. Alberto Alesina and Andrea Ichino, two Italian economists, have suggested going further than merely equalising tax rates. Because women's labour supply is more sensitive to tax rates than men's, theory suggests that their rates should be lower—in Italy, they say, as much as 32% lower.

A higher rate of female employment could help to deal with the difficulties posed by an ageing society. With a higher share of people in work, the ratio of retired people to workers would fall. And Mr Daly argues that it would not reduce fertility rates, as some people may fear. In fact, where the gap between male and female employment rates is small, women tend to have more babies (see the right-hand chart, above). The reason seems to be that in countries where taxes on second earners are high or affordable child care is hard to find, women must often choose between children and work, especially if their incomes are low. Where second earners are not penalised by taxes or where child care is cheap (or subsidised), they can have both.

As Mr Daly says, he is describing a changing picture. Even in Italy and Spain, female employment rates have climbed rapidly in the past decade. A narrowing of the gap between men's and women's employment rates has accounted for half of the rise in the euro area's overall employment rate and for 0.4 points of its 2.1% trend annual increase in GDP since 1995. This has done more for Europe's labour markets, he avers, than have “conventional” reforms. America's female employment rate, meanwhile, has recently declined—perhaps for cyclical reasons. Japan's low rate has not risen much.

Even with no change in policies, the employment sex gap is likely to close further. Probably the biggest changes are under way in Spain. The participation rates of Spanish women of different ages are similar to France's or Germany's 15 years ago. Those in their 20s are now more likely to work than their American sisters. A continuation of this trend, Mr Daly thinks, may add almost half a percentage point to Spain's annual growth rate over the next ten years, and maybe more if policies change. In the euro area as a whole, a quarter of a point is on offer.

The countries with most to do are Italy and Japan. But by the same token they also have most to gain. In Italy, even on recent trends an extra 0.3 points a year of GDP growth may be had. Japan is heading for only an extra tenth of a point, but could gain half a point a year if policies change. Men run the world's economies; but it may be up to women to rescue them.