Women and the world economy

2014.06.24

Photo credit: www.m.c.lnkd.licdn.com

Photo credit: www.m.c.lnkd.licdn.com

In many countries, public debate about gender equality focuses mainly on women’s access to oppositions and high-powered career opportunities. But the “glass ceiling” is only a small part of the issue. The broader question is whether women have the same opportunities as men to participate in labor markets in the first place. In other words, are women empowered to contribute fully to global economic growth and prosperity?

Unfortunately, the International Monetary Fund’s latest study by its staff, “Women, Work, and the Economy,” shows that, despite some improvements, progress toward leveling the playing field for women has stalled. This is bad news for everyone, because it translates into lower economic growth – amounting to as much as 27% of per capita GDP in some countries.

Around the world, the number of women in the workforce remains far below that of men; only about half of working-age women are employed. Women account for most unpaid work, and when they are paid, they are overrepresented in the informal sector and among the poor. They continue to be paid less than men for the same jobs, even in OECD countries, where the average gender wage gap is about 16%. And in many countries, distortions and discrimination in the labor market restrict women’s chances of equal pay and rising to senior positions.

The potential gains from a larger female workforce are striking. In Egypt, for example, if the number of female workers were raised to the same level as that of men, the country’s GDP could grow by 34%. In the United Arab Emirates, GDP would expand by 12%, in Japan by 9%, and in the United States by 5%. According to a recent study based on data from the International Labor Organization, of the 865 million women worldwide who could contribute more fully to their economies, 812 million live in emerging and developing countries.

Raising women’s labor-market participation rate boosts economic performance in a number of ways. For example, higher incomes for women lead to higher household spending on educating girls – a key prerequisite for faster long-term growth. Employment of women on an equal basis with men provides companies with a larger talent pool, potentially increasing creativity, innovation, and productivity. And, in advanced countries, a larger female labor force can help to counteract the impact of a shrinking workforce and mitigate the costs of an aging population.

 

Article prepared by Klaus Cooper

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