IMF Survey : Lagarde Calls for Reforms to Unleash Economic Power of Women

IMF News, September 15, 2014

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“Excluding women simply makes no economic sense—and including them can be a tremendous boon to the 21st century global economy,” said IMF Managing Director Christine Lagarde at the “World Assembly for Women” in Tokyo.
Lagarde identified three main ways to unleash the economic power and potential of women: change economic policies, change laws and institutions, and change attitudes and culture.

Policy levers cited to lift female labor participation:
- Move more from family to individual taxation.
- Provide more affordable child care and parental leave.
- Provide a flexible working environment.
Country examples:
- Sweden devotes a full one percent of GDP to child care and pre-primary spending—more than most (and three times more than Japan).
- Netherlands: female labor force participation rose sharply as part-time work was given the same status as full-time work—the same social security coverage, the same employment protection, the same rules.
- Chile: female labor force participation rose by 20 percentage points over the past quarter century fueled by large increases in social spending, including on early childhood education, childcare, and longer maternity leave.

IMF research cited by Lagarde shows gender gaps are lower when men and women are treated equally under the law in areas such as inheritance, property, and economic opportunity.
Issues highlighted as especially important:
- Equal property rights for married women.
- Women’s freedom to pursue a profession, get a job, or open a bank account—without prejudice or partiality.

Eliminating gender gaps in labor force participation can lead to significant increases in income per capita, especially in lagging regions like the Middle East and North Africa, and South Asia.
Japan-specific figures and implications:
- Japan female participation rate is 65 percent, 20 percentage points lower than for males.
- IMF research suggests that raising Japan’s female labor force to the level of the Group of 7 advanced industrial countries would raise income per capita by 4 percent—permanently.

Japan’s working age population projected change:
- Fall from a peak of 87 million in the mid-1990s to 55 million by mid-century.
Lagarde’s conclusion for Japan: empowering women is an “obvious option” to address demographic decline; Japan’s women are among the highest educated and most talented and can contribute more if enabled.
Recognition of policy momentum: “Thanks to the great leadership shown by Prime Minister Abe, he and his team have set ambitious targets for empowering women—and I am convinced that they can be met.”

Source: IMF Survey : Lagarde Calls for Reforms to Unleash Economic Power of Women (September 15, 2014).