## Closing the gender gap

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### Key findings on economic impact
- Women make up almost half of the world’s working-age population of nearly 5 billion people.
- Only about 50 percent of those women participate in the labor force, compared with 80 percent of men.
- Women who are paid are disproportionately employed in the informal sector and earn less than male counterparts even in the formal sector.
- Early IMF estimates: losses from economic disempowerment of women were estimated to range from 10 percent of GDP in advanced economies to more than 30 percent in South Asia and in the Middle East and North Africa.
- More recent IMF research (Ostry and others 2018) finds complementarities between men and women that raise productivity:
  - Among countries where gaps in participation rates are the largest, closing them adds 35 percent to GDP, on average.
  - Four-fifths of the gains come from adding workers to the labor force, but fully one-fifth arises from the boost to productivity brought by greater gender diversity.
  - Increasing women’s labor force participation produces large gains in economic welfare; these gains exceed 20 percent in South Asia and the Middle East and North Africa.
- When more women participate in the labor force, men also benefit because women’s complementary skills raise productivity, boosting wages for everyone.

### Risks from technological change and sectoral distribution
- Hard-won gains may be eroded if women are overrepresented in jobs at high risk of automation.
- The IMF study (Brussevich and others 2018) finds:
  - Women perform more routine tasks than men across all sectors and occupations, with significant cross-country variation.
  - The risk of displacement is particularly high for less-educated women, those aged 40 and above, and those in low-skill clerical and sales jobs.
  - Women are underrepresented in professional and managerial positions that face lower risk of displacement.
- Specific statistics on representation and automation risk:
  - Globally, women hold fewer than 20 percent of board seats in banks and bank supervision agencies.
  - Women account for fewer than 2 percent of bank CEOs.
  - In the fast-growing tech sector, women are 15 percent less likely than men to be managers and professionals and 19 percent more likely to be clerks and service workers.
  - Given current technology, 26 million women’s jobs in 30 countries (28 OECD countries plus Cyprus and Singapore) have a greater than 70 percent chance of being displaced by technology within two decades.
  - On a global scale, this suggests that 180 million women’s jobs are at risk.
  - While more men than women are at risk in absolute numbers, the number of female jobs lost represents a larger proportion of the female labor force.

### Policy recommendations: three broad areas

- First, policies to bring more women into the workforce
  - General principle: use institutional, legal, regulatory, and fiscal levers to foster opportunity and remove barriers; make it easier to reconcile work and family life.
  - Emerging market and developing economies (examples and evidence from the source):
    - Invest in infrastructure: in rural South Africa, electrification increased female labor force participation by 9 percent.
    - Improve sanitation: in India, building adequate sanitation facilities narrowed gender gaps in education and in female labor force participation.
    - Improve safe transport: Mexico introduced public buses exclusively for women to ensure safe travel.
    - Support female entrepreneurs by increasing access to finance: Malaysia’s Women Entrepreneur Financing Programme and Chile’s simplified deposit accounts helped close the gender gap in borrowing rates.
    - Promote equal rights: Malawi, Namibia, and Peru revised legal frameworks reducing gender discrimination; in the decade that followed, female labor force participation rates increased substantially in all three countries.
  - Advanced economies (examples and evidence from the source):
    - Push for greater parity between maternity and paternity leave (Sweden example).
    - Promote access to affordable, high-quality childcare: Japan expanded childcare leave benefits from 50 percent to 67 percent of salary.
    - Tax policy: move away from family taxation that penalizes the secondary earner toward individual taxation (examples: Canada, Italy, Sweden); use tax relief measures for low-income families (examples include the earned income tax credit in the United States and combinations of tax credits and transfers in Belgium, Germany, and the United Kingdom).
    - Evidence: Research shows that cutting the cost of childcare by half could increase the number of young mothers in the labor market by 10 percent.

- Second, policies to provide women with the right skills and to empower women in the workplace
  - Ensure gender parity in investments in education and health to enable access to quality jobs.
  - Example: IMF research suggests female labor force participation in India would rise by 2 percentage points if Indian states increased education spending by 1 percent of GDP.
  - Build skills early to guard against displacement by technology and to allow women to benefit from new opportunities.
  - Fiscal instruments to support lifelong learning:
    - Tax deductions for training (Netherlands).
    - Portable individual learning accounts (France).
    - Consider subsidizing training by private companies via dedicated payroll taxes and public grants.
  - Promote advancement into managerial and leadership roles:
    - Set recruitment and retention targets, promotion quotas (Norway), and mentorship and training programs.
  - Close the digital gender divide:
    - 60 percent of the global population, mostly women in emerging market and developing economies, still have no access to the internet.
    - 250 million fewer women are online than men.
    - Example: Finland’s approach—universal broadband connectivity, digital education for all, and digital access to business and government services.

- Third, easing transitions for displaced workers
  - Ensure equal support for displaced men and women through labor market policies to improve skills, connect workers with jobs, and promote job creation.
  - Adapt social protection systems to more flexible forms of work, such as telework.
  - To address deteriorating income security from rapid technological change, some advanced economies may consider:
    - Expanding noncontributory pensions.
    - Adopting basic income guarantees.

### Concluding observations
- Recent decades have seen considerable progress in leveling the playing field for economic opportunities, but much more work remains.
- Countries, policymakers, governments, and corporations increasingly recognize the benefits for economic growth and development of giving women equal opportunities.
- The IMF is committed to working with other international organizations, governments, civil society organizations, and the private sector to reduce barriers to gender equality by providing policy advice and analysis.

*Source: "Closing the Gender Gap," Finance & Development, March 2019*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2019/march/closing-the-gender-gap-dabla.pdf_