Gender Equality Boosts Economic Growth and Stability

IMF News, September 27, 2022

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Global crises have widened gender gaps: the war in Ukraine, the COVID-19 pandemic, the current food and energy price surge, and long-standing factors such as climate change.
World Economic Forum projection: it will now take more than 130 years to close gender gaps worldwide, up from about 100 years before the pandemic.
Pandemic and climate impacts:
- Globally, 64 million women lost their jobs during the pandemic (twice as many as men).
- An estimated 80 percent of people displaced by climate change are women (UNDP, 2016).
Gender equality is linked to macroeconomic and financial stability, can stimulate economic growth, boost private and public sector performance, and reduce income inequality.

Labor market gender gaps in Korea remain among the largest in OECD countries in terms of earnings and labor force participation.
Exact statistics cited:
- Gender pay gap: 32 percent in 2020.
- The gender pay gap is almost 20 percentage points higher in Korea than the OECD average.
- Women hold only 16 percent of managerial positions compared to 32 percent of comparable countries in 2017.
- Women’s labor force participation rate increased from 53 to 60 percent between 2001 and 2021.
- Gender labor participation gap: 18 percentage points in Korea, compared to 15 percentage points among OECD countries.
Macro impact estimate:
- IMF analysis suggests that if Korea’s female labor force participation rose to the same level as male labor force participation by 2035, real GDP would grow by more than 7 percent.

Macroeconomic, structural, and financial policies should be well-designed to support efficient and inclusive outcomes that equitably benefit women, girls, and society.
Key measures supported to increase female labor force participation focus on retention and redeployment:
- Strengthen the quality and affordability of childcare services.
- Promote shared parental leave.
- Broaden measures to improve work-life balance, including through a reduction in working hours and more flexible working environments.
- Mitigate labor market duality.
- Provide career transition assistance and upskill training targeted to women’s needs and tailored to a broader range of sectors and positions.
- Make the tax treatment of second earners more neutral.
- Introduce benchmarks for employment and leadership of women by corporations.

Reforms and initiatives already implemented:
- Expanded parental leave and childcare services.
- Reduced working hours for expecting women.
- Encouraged more equitable sharing of childcare duties between spouses.
- Improved work-life balance measures.
- Provided more employment services tailored to women.
- Expanded employment insurance coverage to self-employed, freelance, and part-time workers.
- Since 2005, gender impact assessments have been used to understand policy impacts on women.
- Since 2010, a gender budgeting system has been used to design fiscal policies and frameworks with a gender perspective.
Recent measures by the new administration highlighted as welcome:
- Expanding parental leave and services with government support and public-private partnerships.
- Supporting women professionals in new, digital and high-tech industries.

Additional steps recommended to prevent labor market and career disengagement:
- Support women’s return to the labor force and career reengagement through sector-specific training.
- Further improvements in the quality of childcare.
- Public education for early school ages.
Continued focus on tailored employment services, training, and removing barriers to leadership positions.

The IMF Executive Board approved the first comprehensive IMF Strategy for Mainstreaming Gender.
Strategy premises and aims:
- Starts from the premise that gender equality has positive macroeconomic benefits and recognizes that economic and financial policies affect women and men differently.
- Provides a framework for integrating gender into the core work of the IMF, including economic surveillance and policy advice, the design of IMF-supported programs, and capacity development (for example, training on gender budgeting).
- Aims to give IMF staff better tools to:
- Systematically assess the macroeconomic consequences of gender gaps where they are macro-critical.
- Evaluate the gender-differentiated impact of shocks and policies.
- Provide granular and tailored macroeconomic and financial policy advice.
- Recognizes the importance of collaboration with external partners.
Implementation approach:
- Timeline is expected to be gradual and measured: "We will take the time needed to get this right."

IMF staff stand ready to continue supporting Korea to identify measures that foster resilience and inclusive growth by narrowing gender gaps and improving women’s economic empowerment.
The Fund will continue producing research on gender issues and applying a more systematic approach through the new strategy.

Remarks by Gita Gopinath, IMF First Deputy Managing Director; Delivered at the Korea Gender Equality Forum; September 27 - 28, 2022