## Fiscal Policies For Women’s Economic Empowerment _IMF Blog, February 18, 2020_ ## Source details **Canonical URL:** [Fiscal Policies For Women’s Economic Empowerment](https://www.imf.org/en/blogs/articles/2020/02/18/fiscal-policies-for-womens-economic-empowerment) ## Other formats - [Markdown version](/en/blogs/articles/2020/02/18/fiscal-policies-for-womens-economic-empowerment/index.md) - [Structured JSON version](/en/blogs/articles/2020/02/18/fiscal-policies-for-womens-economic-empowerment/index.json) - [Bundle manifest](/en/blogs/articles/2020/02/18/fiscal-policies-for-womens-economic-empowerment/bundle-manifest.json) ## Bibliographic details - Authors: Stefania Fabrizio, Daniel Gurara, Lisa Kolovich - Published: February 18, 2020 --- ### Overview - Making sure that opportunities to enter the workforce are fair and rewarding for women benefits everyone. - The average female workforce participation rate across countries is still 20 percentage points lower than the male rate. - Fiscal policy choices that address gender equality—such as investing in education or infrastructure, developing better sanitation facilities, implementing individual-based tax regimes, and offering parental leave—create more economic opportunities for women, increase growth, and reduce poverty and inequality. - Most measures pay for themselves in the long run without additional costs for governments; a larger workforce leads to higher economic activity and growth, which generate additional tax revenue. ### Inclusive fiscal policies: evidence and examples - Since the mid-1980s, at least 80 countries across all levels of development and regions have adopted fiscal policies to promote gender equality. - Previous IMF research suggests that in advanced economies, when governments actively promote policies to increase female labor force participation, more women join the labor force. - Country examples: - Canada, Czech Republic, and Sweden increased women’s paid work when switching from family to individual income taxation. - For low-income and developing countries: - Programs aimed at reducing gender gaps in education, particularly for secondary and university education, have supported more economic opportunities for women. - Better infrastructure decreases the time spent on unpaid care work and provides more women the choice to enter paid employment. - Greater gender parity across occupational levels can foster new ideas and higher productivity. ### Competing demands and policy trade-offs - Policymakers face limited budget room and competing demands: investing in schools or roads, introducing new revenue measures, or offering free, high-quality childcare. - Decisions should consider effects on economic growth and how policies reduce income and gender inequality. - Examples of measured impacts: - Closing the gender gap in literacy rates in low-income countries: average literacy rate of men is about 70 percent while it is only 54 percent for women—closing this gap increases women’s productivity and equips more women for jobs in skill-intensive sectors. - Labor-saving infrastructure: in Malawi, women on average spend 54 minutes a day collecting water; better access to infrastructure can free time and enable paid work. - Tax structure: removing tax distortions for the lower-earning family member (usually the woman) by shifting from family to individual taxation creates incentives for more women to work and increases workforce diversity. ### Securing the future: targeted measures and distributional effects - Not all gender-responsive fiscal policies benefit women equally; some measures have larger effects on poorer women. - Subsidizing childcare and providing paid maternity leave have greater impact on poorer women who face higher childcare costs relative to income. - In the US, poorer women spend 17.4 percent of their income on childcare compared to 7.8 percent for richer women. - Time horizons matter: - Long-term measures: investing in education to equip girls with the same skills as boys boosts women’s human capital and future labor productivity. - Short- to medium-term measures: cash transfers targeting poorer working women can help reduce poverty and inequality now. - Tackling gender-biased social norms amplifies the positive effects of gender-responsive measures and improves human rights and women’s economic empowerment. - According to the Organization for Economic Co-operation and Development: - Discriminatory laws and social practices reduce women’s years of schooling by 16 percent. - They decrease labor force participation by 12 percent. - They result in a global income loss of 7.5 percent of the global GDP. - Progress examples: - Under the Promundo initiative, 34 countries have introduced programs to engage men and boys on gender norms with participants responding very positively. ### Key findings and takeaways - Fiscal policies that promote gender equality can: - Increase female labor force participation. - Raise growth, reduce poverty, and lower inequality. - Often pay for themselves over time through higher economic activity and tax revenue. - Policy design should consider distributional impacts, time horizons, and the role of social norms to maximize effectiveness. - Coordinated efforts by policymakers and citizens can foster equality, equity, and brighter prospects for all. *Source: Fiscal Policies For Women’s Economic Empowerment, Stefania Fabrizio, Daniel Gurara, Lisa Kolovich, February 18, 2020* --- ## Content in this bundle - **Family Taxation and the Female Labor Supply: Evidence from the Czech Republic** - [Family Taxation and the Female Labor Supply: Evidence from the Czech Republic (Markdown version)](/pdf/wp/Wp496.pdf.md){rel="alternate" type="text/markdown"} - [Family Taxation and the Female Labor Supply: Evidence from the Czech Republic (PDF)](/pdf/wp/Wp496.pdf){rel="external" type="application/pdf"} - **Staff Discussion Note** - [Staff Discussion Note (Markdown version)](/-/media/files/publications/sdn/2020/english/sdnea2020003.pdf.md){rel="alternate" type="text/markdown"} - [Staff Discussion Note (PDF)](/-/media/files/publications/sdn/2020/english/sdnea2020003.pdf){rel="external" type="application/pdf"} --- ## References - [https://www.imf.org/wp-content/uploads/2020/02/infographic-1.jpg](https://www.imf.org/wp-content/uploads/2020/02/infographic-1.jpg) - [Previous IMF research](https://www.imf.org/en/Publications/Policy-Papers/Issues/2018/05/31/pp053118pursuing-womens-economic-empowerment) - [https://www.imf.org/wp-content/uploads/2020/02/infographic-2.jpg](https://www.imf.org/wp-content/uploads/2020/02/infographic-2.jpg) _Source: https://www.imf.org/en/blogs/articles/2020/02/18/fiscal-policies-for-womens-economic-empowerment_