INCREASE WOMEN'S INCOMES

 WOMEN, EMPLOYMENT AND DEVELOPMENT

Most women live in societies where access to money determines quality of life. Money is required to buy food and clothing, housing, healthcare, education and transportation. But most women do not enjoy the same access to money as men do and the freedom and control it offers. Globally far fewer women than men are employed (5 out of 10 women compared to 7 out of 10 men), the global workforce is still predominantly male (only 4 out of 10 workers are women), and in many countries women are overrepresented among “vulnerable” workers (e.g. unpaid family and self-employed workers) where payment for labor can be sporadic or non-existent (World Bank).

As a consequence, women’s wages are lower than men’s across all 131 countries measured in the latest Global Gender Gap Report where the female to male ratio of wages ranges from 83% in Burundi to 40% in Angola. Of great concern are the very high income gaps between what men and women earn in several high-population countries including India, Pakistan, Indonesia, Iran, Egypt, Turkey and Mexico, where women’s incomes all fall below 50% of men’s.  Recent evidence suggests that mothers pay a special price as gender pay gaps are highest for women with dependent children. Michelle Budig’s study of the “motherhood pay gap” in the United States revealed that married mothers earn only 76 cents to a married father’s dollar and global analysis by the International Labor Organization concluded that, “the motherhood pay gap tends to be larger in developing countries” rising with the number of children a woman has. The motherhood pay penalty explains as much as 50% of the gender pay gap according to Jane Waldfogel.

The stubborn persistence of barriers to employment for women, and particularly for mothers, is one of the reasons no country has closed the economic participation gap for women, and why women have not experienced significant employment or earnings progress in the last two decades. This is all the more frustrating because of the body of evidence that finds a positive relationship between women’s employment and economic growth and development.  In the words of a 2013 International Monetary Fund (IMF) report. “there is ample evidence that when women are able to develop their full labor market potential, there can be significant macroeconomic gains.”

So powerful is this relationship between women’s employment and economic growth that the IMF report cites research that if as many women as men were employed, GDP would rise by 5% in the United States, by 9% in Japan, and by a massive 34% in Egypt. Productivity could also improve as in many countries women with tertiary qualifications now outnumber men. The IMF argues that when you put these economic gains together with women’s propensity to spend more of their incomes on the education and health of their households, higher female employment can result in increased survival, enhanced development and higher school enrollment for children triggering the much sought after “virtuous cycle” of development.  For all of these reasons, women’s employment has been described as “the single most important factor keeping many households out of poverty,” by the International Labor Organisation.

Further, the recent Lancet series on Violence Against Women and Girls reported that increases in women’s incomes can contribute to reductions in intimate partner violence. This implies that improving women’s earnings through employment could  reduce the high rates of partner violence that exist in most countries. More than 1 in 3 women in the world experience physical and/or sexual violence by their husbands or boyfriends in their lifetimes with the rate rising to over 60% in some regions.  If Valerie Hudson is correct and there is a direct relationship between these high levels of partner violence and a nation’s propensity for civil and international conflict, increasing women’s employment could even contribute to improvements in national, regional and global security over time.

1.4 BILLION “NON-EMPLOYED” WOMEN

Despite the evidence that increasing women’s employment can accelerate development, 53% of the 2.7 billion women aged over 15 in the world today are “non-employed,” meaning they do not earn and control their own money. In contrast, just 28%, or 750 million, of the 2.7 billion men aged over 15 are non-employed (World Bank and UN Population Prospects).

These 1.4 billion non-employed women face enormous risks as they are often totally dependent on others, typically family members, for financial support and for the survival and development of the children they care for.  As many of these women work very long hours caring for their children, other family members and households, they are constrained in their ability to minimize these risks and pursue income-earning activities. Their precarious situation has its roots in the family division of labor and in the unpaid nature of the “family work” that is assigned to women. In societies that hold fast to the traditional family division of labor, women are expected to gain access to money through marriage and not paid employment. Often the only women in these societies who are employed have lost their connection to a male earner through death, divorce or separation. And women without husbands are often the most vulnerable of all because if they are not not able to find work they, and their children, are among those at highest risk of poverty.

And yet research suggests that a majority of non-employed women do in fact want to work.  A recent Kaiser Family Foundation study of the 32 million non-employed people in the United States (almost 70% of whom are women), revealed that “family responsibilities” was the top reason for non-employment. But when asked, a majority of non-employed women said they did in fact want a job and would consider returning to employment if flexible hours or working from home was part of the deal.  Similar studies have found the same desire for paid work among women in low and middle income countries (World Bank).

Six of every ten non-employed women live in just ten countries with India, China, the United States and Pakistan accounting for almost 50% of all non-employed women in the world. As all of these countries are experiencing some combination of slow economic growth, high poverty, rising inequality, rapidly aging populations and civil conflict, failing to capitalize on the productive capacity of large populations of working-age women represents a major missed opportunity.  And for those countries that have the lowest (<20%) proportions of women employed, including Syria, Iran, Afghanistan and Egypt, increasing women’s employment could yield major national and regional development returns, including increased economic growth, improvements in health and education, reductions in poverty and inequality and potentially and very critically, a decline in conflict and insecurity.

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WOMEN’S EMPLOYMENT: A NEW DEVELOPMENT PRIORITY

To harness the development power of women’s employment, countries should establish a new goal to increase the female employment ratio to above 50% by 2020 and to above 60% by 2030. For countries who have already achieved this level (e.g. China and several African countries) the goal should be to lift the female employment ratio to the level enjoyed by men and to improve the quality of female employment (i.e. regular pay and improved working conditions). Getting back on the convergence track with women’s and men’s employment could drive the next wave of global growth and development and accelerate the arrival of the final chapter of Claudia Goldin’s “grand gender convergence”, closing the remaining gender gaps in women’s labor market participation and remuneration everywhere.

Accordingly, all countries should make increasing women’s employment a central plank of national development policies.  A specific target for the female employment to population ratio should be set and the ultimate goal should be to equalize women’s and men’s employment ratios over time. Policies and programs that simultaneously increase the supply of women who are “work-enabled” and demand for their labor should be implemented. Increasing the supply of women who are able and who want to work could include reducing fertility and early marriage rates as well as maternal mortality rates, increasing women’s literacy and educational performance, and increasing women’s wages and the general return to work by reducing barriers and penalties to employment, especially those that relate to women’s “family responsibilities”.

Cash supplements linked to employment including earned income tax credits and conditional cash transfers should be considered in this context alongside programs that reduce the childcare costs for employed women (e.g. childcare subsidies, parental leave, flexible work schedules, aligning school and work hours etc).  Care should be taken to design programs that do not have unintended negative effects on women’s incomes (e.g. too generous parental leave provisions may actually reduce women’s long-term promotion and pay prospects).

Policies and programs that increase the demand for women’s labor will be important, including stimulating jobs growth in “female-friendly” industries (e.g. services, manufacturing, agriculture etc) and in urban locations where ever larger pools of non-working women may be looking for more formal employment, especially if offered more flexible hours.  Reducing any legal barriers that prevent, restrict or discourage employers from hiring women will also be critical.  Governments may also wish to explore specific incentives (e.g. tax or subsidies) to employers to locate new jobs in areas with high populations of non-employed women and/or for employing women to fill new jobs, especially if they are from the lowest income households or members of other disadvantaged groups (e.g. women with dependent children). It is critically important that both supply and demand-side policies and programs are designed to benefit women in the lowest income households and women with dependent children to maximize the impact on reducing poverty and inequality.

ELEVATE FEMALE EMPLOYMENT IN THE NEW GLOBAL GOALS

The United Nations and its agencies should support this new country focus on women’s employment by elevating the female employment ratio to center stage in the Sustainable Development Goals, by ensuring that all agencies understand the primacy of women’s incomes to development outcomes and by incorporating a women’s employment agenda into their programs. The UN should also support the collection of new data on women’s “own-incomes”, by income quintile and family status (e.g. number of dependent  children), and explore the development of new indicators of women’s income security, control and independence, which would allow for better measures of women’s economic position and progress in and across countries.

This would be a dramatic improvement on the Millennium Development Goals (MDG), which stressed poverty reduction measured at the household level. Although the MDG poverty reduction goal was met early (largely because of China’s economic growth performance), we know very little about how women’s poverty changed over the MDG period.  We don’t know the change in the proportion of women living in poverty and the proportion of people in poverty who are women, and we don’t know how women’s incomes have changed since 1990. It is possible given what we know about the unequal distribution of resources within many households that female poverty has not fallen at the same rate as household poverty since 1990, especially in very low income countries.

A final note.  One of the ugliest realities in too many counties is that women function as substitutes for money; their bodies treated as “income-generating assets”, to quote a young Tanzanian girl (World Bank). And it is true that when women and girls are offered as unpaid domestic servants or as brides to repay a debt, or murdered to cancel an injury to another, real or perceived, they are effectively functioning as money.  Securing their own sources of income may be one of the best ways women can lower or even eliminate the risk that these extreme forms of exploitation will violate their rights and derail their lives.