Women’s Empowerment: An Economic Game Changer

IMF News, November 14, 2016

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Empowering women is a critical economic priority, not only a moral imperative.
If women participated in the labor force to the same extent as men, national income could increase by:
- 5 percent in the U.S.
- 9 percent in Japan
- 27 percent in India
Global statistics and gaps:
- Only half of the world’s working-age women are employed.
- Women who work in the formal sector earn, on average, three-quarters as much as men.
- The G-20 account for 85 per cent of world GDP and two-thirds of its population.
- G-20 pledge: reduce the gap in women’s labor force participation by 25 percent by the year 2025 — estimated to create 100 million more jobs by 2025.
- Iceland example: women still earn 14‑18 percent less than men; protest action timed at exactly 2:38 pm to signal the unpaid portion of the work day.
- New research indicates that, at current rates, full economic equality may not be reached for another 170 years — i.e., by 2186.

Christine Lagarde’s background highlights three pivotal “gender moments”:
- Told she would never make partner at a top French law firm because she was a woman; she left and later built her career.
- Deferred partnership by one year in Chicago to accommodate childcare (stopped working Wednesday afternoons), signaling workplace flexibility choices.
- At the IMF over five years, she led efforts to build the economic case for gender equality and expand institutional engagement.
Role models cited: Chancellor Merkel, Aung San Suu-Kyi, Nadia Murad.

Research-backed macroeconomic gains from gender equity are cited as central to growth and shared prosperity.
Equal pay and better opportunities for women:
- Boost economic growth and reduce inequality.
- Increase diversity and shareholder value in firms (evidence: adding one more woman on a corporate board is associated with between 8 and 13 basis points higher return on assets).
Persistence of a “triple-disadvantage” for women globally:
- Lower labor force participation.
- Higher likelihood of informal sector employment.
- Substantially lower earnings even with similar education and occupational profiles.

Governments should prioritize policies that create economic incentives for women’s participation:
- Promote affordable childcare.
- Implement and support parental leave.
- Encourage workplace flexibility.
- Increase women’s access to finance.
- Remove legal barriers that restrict women’s economic activity.
- Pursue smarter tax policies:
- Reforms to help low-income families (disproportionately headed by women).
- Reduce taxation on secondary earners in households (who are mostly women).
Private-sector and individual actions:
- Hire, promote, and invest in women.
- Mentor others and build cross-sector coalitions.
- Use civic engagement (voting, entrepreneurship, public service) and consumer choices to advance equality.
- Promote civility in public and private discussions.

The G-20 commitment to reduce participation gaps by 25 percent by the year 2025 could create 100 million more jobs by 2025 and materially boost growth and reduce poverty and inequality.
Despite high-profile examples and pledges, progress is painfully slow; new research warns full economic equality could take 170 years at current rates — a future date of 2186 is given to highlight urgency.
The speech frames the next generation as essential actors to accelerate progress through leadership, consumer choices, political engagement, and cultural change.

Christine Lagarde speech, Los Angeles, November 14, 2016; IMF Communications Department.