Countries That Close Gender Gaps See Substantial Growth Returns

IMF Blog, September 27, 2023

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Empowering women economically is framed as "a powerful engine of inclusive growth."
Date and authors as presented: Antoinette M. Sayeh, Alejandro Badel, Rishi Goyal; September 27, 2023.
The piece emphasizes narrowing the gap between the share of men and women who work as an important reform to revive economies amid the weakest medium-term growth outlook in more than three decades.

Global growth is predicted to languish at just3 percent over the next five years.
Labor force participation rates: Only47 percent of women are active in today’s labor markets, compared with 72 percent of men.
The average global gap has fallen by only 1 percentage point annually over the past three decades.
Estimated GDP gain: Emerging and developing economies could boost gross domestic product by about 8 percent over the next few years by raising the rate of female labor force participation by 5.9 percentage points—the average amount by which the top 5 percent of countries reduced the participation gap during 2014-19.
The potential gain ("about 8 percent") is described as larger than the economic "scarring," or output losses, inflicted on countries by the pandemic.
Under present policy trajectories, gender gaps in labor force participation will narrow but never close; gaps would remain large for most countries, exceeding 16 percentage points in one out of ten countries.

Causes identified: unfair laws, unequal access to services, discriminatory attitudes, and other barriers that prevent women from realizing their full economic potential.
Progress over three decades has been uneven; economies of all income levels experienced several setbacks due to shocks, crises, and policy reversals.
The pandemic eroded progress closing gender gaps, especially forwomen with young children.
Setbacks cause scarring that slows and often reverses progress toward gender equality.

Countries must step up efforts to break down barriers to women’s participation in the labor market, including limited access to education, health, assets, finance, land, legal rights, and care services.
Policymakers should systematically take account of how macroeconomic, structural, and financial policy packages impact women.
Complementing governance and financial reforms (to strengthen institutions and unlock capital for investment) with measures to narrow gender gaps would greatly amplify growth returns.

Source: Countries That Close Gender Gaps See Substantial Growth Returns (IMF blog post, September 27, 2023).