Women's Economic Empowerment and Inclusive Global Economic Growth: COVID-19 and Beyond
IMF News, March 8, 2021
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- Published: March 8, 2021
Overview
- Keynote Speech by Chief Economist Gita Gopinath at the Inaugural Dr. Hansa Mehta Lecture, March 8, 2021.
- Addresses disproportionate pandemic impacts on women and the economic benefits of gender equity.
- Emphasizes shared responsibility among governments, the private sector, and international organizations to advance gender equality.
Major findings and evidence
- Women disproportionately affected by the pandemic due to concentration in sectors hit hardest (restaurants and hospitality) and increased caregiving responsibilities when schools closed.
- In developing countries, women are over-represented in the informal sector with lower pay, less job security, and lower social protection.
- Reports indicate intensified violence against women and girls since the outbreak of the pandemic.
- Pre-pandemic gender gaps remain large despite progress in education, economic and political participation, and leadership roles.
Key statistics and quantitative estimates
- Labor market participation: "Globally, only 55 percent of women are engaged in the labor market as opposed to 78 percent of men."
- Financial barriers: "In 72 countries, women are barred from opening bank accounts or obtaining credit."
- Wage gap: "Women continue to earn about 50 percent less than men for the same type of work."
- Political representation: "They represent only 25 percent of parliamentarians."
- IMF pandemic assistance: "In just this pandemic we have provided financial assistance to 85 countries, in addition to debt relief for our poorest members."
- Institutional history: IMF "has been promoting policies to support growth and stability for more than 70 years."
- Board and CEO representation in banking: "Women globally account for less than 20 percent of board seats in banks and banking supervision agencies, and account for fewer than 2 percent of bank CEOs."
- Legal impediments and outcomes:
- "In more than 100 countries, women encounter at least one legal impediment to their participating in the economy."
- "75 percent of countries in Francophone Africa have regulations restricting women’s employment."
- "12 countries in the Spanish-speaking countries have decrees prohibiting female employment in some sectors."
- "In half of the countries we studied, when legal impediments to women undertaking economic activities were reduced, their labor force participation rose by at least 5 percentage points in the following 5 years."
- Women-owned business finance gap: "It is estimated that in developing countries, 70 percent of women-owned businesses are under-served by financial institutions."
Economic impact estimates and channel effects
- Potential national income gains from equal labor force participation:
- "By as much as 5 percent in the United States."
- "9 percent in Japan."
- "As much as 15 percent in countries with the lowest female labor force participation rates."
- Japan-specific transition and productivity effects:
- "Raising female labor force participation rates to the levels of Northern Europe could boost GDP growth by up to 0.4 percentage points in the transition years."
- Canada-specific productivity effect:
- "The impact of employing more highly educated women could boost labor productivity by up to 0.4 percentage points per year."
- Inequality channel:
- "Moving from a situation of perfect gender inequality to perfect gender equality is estimated to be equivalent to lowering income inequality from levels prevailing in Venezuela to those in Sweden."
- Financial sector resilience:
- Greater share of women on banks’ boards and supervisory boards is associated with "greater financial sector resilience, lower probability of insolvency, and greater profitability."
Policy recommendations — Governments
- Use fiscal policy to advance women in education, health, financial inclusion, and economic empowerment.
- Implement gender budgeting to ensure tax and spending policies include provisions for women’s access to opportunity.
- Increase spending on childcare: IMF research links higher childcare spending to positive contributions to female employment in the Czech Republic, Poland and Norway.
- Promote flexible working arrangements: examples cited include Japan.
- Adopt workplace regulations that:
- Protect women under the law.
- Encourage parental leave parity between men and women.
- Provide access to affordable childcare and health services.
- Ensure equitable treatment in courts and protection against violence.
- Reform tax policies that penalize secondary earners to encourage labor force participation by women.
- Evidence cited: reforms supporting secondary earners, boosting tax incentives for part-time work, helped support female employment in Korea, Norway, and the United Kingdom.
- Remove legal, regulatory, and institutional impediments that restrict women’s economic participation (noting the prevalence in "more than 100 countries" and specific regional examples).
Policy recommendations — Private sector
- Ensure equal pay for equal work.
- Implement work-life policies to support women’s labor force attachment: mentoring, leadership opportunities, flexible schedules, travel and childcare subsidies, and zero tolerance for workplace harassment.
- Financial sector role: address the financing gap where "70 percent of women-owned businesses are under-served by financial institutions" in developing countries.
Policy recommendations — International organizations
- Support the United Nations Sustainable Development Goal on gender equality among the 17 SDGs to achieve inclusive growth by 2030.
- Provide training, technical advice, and peer-learning workshops with country authorities.
- Internal institutional actions: IMF increased female directorship to "over 30 percent," appointed "the IMF’s second consecutive female Managing Director, and its first female Chief Economist," and increased the number of women in leadership positions in the Chief Economist’s Department.
Examples and case studies
- India (1993 village council reservations): reservation of a fraction of village council leadership positions for women led to:
- Significant rise in parents’ aspirations for their daughters.
- Erasure of the gender gap in adolescent educational attainment.
- Girls spending less time on household chores.
- Weakening of stereotypes about gender roles in public and domestic spheres.
- Historical reference to Dr. Hansa Mehta’s contributions: correcting UN language from “All men are born free and equal” to “All human beings are born free and equal,” championing the Sarda Act, better educational opportunities for girls, and personal law reforms.
Conclusion
- Women have made critical contributions during the crisis as leaders, health professionals, first-responders, and caregivers, but have been hit disproportionately hard.
- Empowering women is both a moral imperative and an economic game changer that can deliver stronger, more inclusive, and more resilient growth.
- Progress requires urgent and determined action by governments, the private sector, and international organizations to honor the legacy of Dr. Hansa Mehta.
Women's Economic Empowerment and Inclusive Global Economic Growth: COVID-19 and Beyond — Keynote Speech by Chief Economist Gita Gopinath, March 8, 2021