INCREASE WOMEN'S INCOMES
WOMEN, EMPLOYMENT, AND DEVELOPMENT
Most women live in societies where access to money determines the 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 that men do and the freedom and control it offers. Globally far fewer women than men are employed. Less than five out of every 10 women are employed compared to almost seven out of every 10 men, according to the International Labour Organization (ILO).
The global labor force is still predominantly male with less than four out of every 10 workers female. And in many countries, women are overrepresented among “vulnerable” workers (e.g., unpaid family and self-employed workers). For these women payment for their labor can be sporadic or non-existent, according to the ILO.
In only two countries (Albania and Burundi) was the gender wage gap for similar work perceived as more than 80% closed, according to the latest Global Gender Gap Report. Just one quarter of the 146 countries measured scored between 70% and 80%. Of great concern are perceptions of the very high gaps in equal pay remaining in several high-population countries including India, Iran, Brazil, Bangladesh, Mexico, South Africa, and Democratic Republic of Congo where survey respondents reported less than 60% of the equal pay pay had been closed.
Recent evidence suggests that mothers pay an even steeper price as gender pay gaps are highest for women with dependent children. Michelle Budig’s study of the “motherhood pay gap” in the USA revealed that married mothers earn only 76 cents to a married father’s dollar. The motherhood pay penalty explains as much as 50% of the gender pay gap in the USA, according to Jane Waldfogel. Analysis by the ILO confirmed that the motherhood pay gap is larger in low- and middle- income countries and rises with the number of children.
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 the International Monetary Fund (IMF), “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 if as many women as men were employed, GDP would rise by 5% in the USA, by 9% in Japan, and by a massive 34% in Egypt, according to the IMF. Productivity could also improve as in many countries women with tertiary qualifications now outnumber men.
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 ILO.
Increases in women’s incomes can also 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 one in four women in the world experience physical and/or sexual violence by their husbands or boyfriends in their lifetimes, and the number rises to one in two in some regions, according to the World Health Organization (WHO). 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.
1.7 BILLION “NON-EMPLOYED” WOMEN
Despite the evidence that increasing women’s employment can accelerate development, 55% of the 3 billion women aged over 15 in the world today are “non-employed,” meaning the vast majority do not earn and control their own money. In contrast, just 32% of the 3 billion men aged over 15 are non-employed, according to the World Bank. These 1.7 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 their children.
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 unable to find work they, and their children, are among those at the highest risk of poverty.
And yet research suggests that a majority of non-employed women do in fact want to work. A Kaiser Family Foundation study of 32 million non-employed people in the USA (almost 70% are women), revealed that “family responsibilities” was the top reason for non-employment. But when asked, a majority of non-employed women said that they did in fact want a job and would consider returning to employment if flexible hours or working from home were offered. Similar studies have found the same desire for paid work among women in low- and middle-income countries, according to the World Bank.
More than seven out of every 10 non-employed women live in just 20 countries with India, China, Pakistan, the USA, and Indonesia accounting for 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 the 20 countries that have the lowest proportions (<20%) of women employed, 12 in the Middle East and North Africa, 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. Increasing women’s employment could be especially important to peace and stability in the Middle East and North Africa, especially in Yemen, Iraq, West Bank and Gaza, Egypt, Iran, Syria, Afghanistan, Sudan, and Lebanon.
WOMEN’S EMPLOYMENT: A NEW DEVELOPMENT PRIORITY
To harness the development power of women’s employment, countries should establish a new goal: increase the female employment to population ratio to above 60% by 2025, and to above 70% 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 to population ratio to the level enjoyed by men and to improve the quality of female employment (e.g., 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” by 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 and security 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 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 GLOBAL GOALS
The United Nations (UN) and its agencies should support this new national focus on women’s employment by elevating the female employment to population ratio to center stage in the Sustainable Development Goals (SDGs). All agencies should understand the primacy of women’s incomes to development outcomes and incorporate a women’s employment agenda into their programs. The UN should also support the collection of new data on women’s “own-incomes” relative to household income and family status (e.g., number of dependent children) and explore the development of new indicators of women’s income security, control, and independence. There is an urgent need for better measures of women’s economic position and progress in and across countries.
This would be a dramatic improvement on the SDG goal which measures poverty reduction at the household level. We still 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 countries is that women function as substitutes for money; their bodies treated as “income-generating assets” to quote a young Tanzanian girl in a study by the World Bank. 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.
Updated January 2024