Iceland moved up the rankings as more women took on senior jobs
Iceland is the country that has made the most progress in closing the gender gap - knocking Norway off the top spot - a World Economic Forum survey said.
Across the 134 countries surveyed, most progress was made in closing the health and schooling divide in the past year.
But 60% of the pay and work status divide and only 17% of the political involvement gap has been closed.
The WEF measures progress in the areas of politics, education, economy and health for the report.
More women breaking into senior and technical posts helped Iceland edge ahead of its Nordic neighbours.
Iceland, Finland, Norway and Sweden remain the four countries that have done the most to close the gender gap.
Elsewhere, the UK, US and Germany continued to slip back in the rankings.
The UK slipped two places to 15 and the US three places to 31 as the involvement of women in the economy declined.
Meanwhile, Germany fell one place to 12 due to the lack of political participation for women.
Italy at number 72 continues to hold one of the lowest positions among European countries. It dropped three spots relative to 2008 due to persistently poor scores in economic participation.
On the upside, South Africa has made the biggest steps towards narrowing the gender gap, particularly in the labour force and political participation.
Political gains were driven by the new government with more women in parliament and female ministers in the new government.
"Countries that do not fully capitalize on one-half of their human resources run the risk of undermining their competitive potential," said report co-author Saadia Zahidi, head of the WEF's Women Leaders and Gender Parity Programme.
Amongst the fallers, Venezuela (69) sank 10 places on the index as fewer women were taking part in the workforce - down to 55% from 64% last year.
GENDER GAP INDEX - TOP 5
1 - Iceland
2 - Finland
3 - Norway
4 - Sweden
5 - New Zealand
Meanwhile, most Middle Eastern and North African countries continue to feature far below the global average, with little or no improvement over the last year.
However, there are exceptions in the region. Israel, Bahrain, Algeria, Morocco, Egypt and Saudi Arabia have all improved on last year's scores.
Yemen continues to occupy the last place of the 134 countries in the rankings as it remains the only country in the world to have closed less than 50% of its gender gap since the survey began in 2000.
This year it fared even worse as its performance had weakened compared with last year.
"Girls and women make up one half of the world's population and without their engagement, empowerment and contribution, we cannot hope to achieve a rapid economic recovery nor effectively tackle global challenges such as climate change, food security and conflict," said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.