Bridging the Gender Gap at work would add more economic growth

Empowering women to engage in productive employment is critical to achieving not only this SDG but is also pivotal to economic growth, poverty eradication, reducing child mortality, improving maternal health, and attaining universal primary education.

Economic crises affect women more than men

• Women are often laid off first as men are traditionally considered to be the main breadwinners.

• Economic shocks that worsen infrastructure, physical and human, affect women more than men by reducing their access to markets and basic services.

• Girls are often withdrawn from schools to help with household work and informal enterprises during times of economic crisis, reinforcing gender gaps in education.

Gender as a new growth driver

• It has begun to attract the attention of policymakers in recent years.

• Economic growth and development depend upon successfully utilizing the workforce, both male and female. Recent estimates suggest that increasing the female participation rate to that of men could potentially raise economic growth by as much as 5%.

• While achieving economic growth sometimes requires tough structural reforms and choices (e.g., progressive taxation that may discourage effort), the opposite is true for gender as a driver of growth.

• Multilateral global institutions have scaled up the importance of gender in their growth work. The International Monetary Fund (IMF) has increased the focus on gender and growth in Article IV consultations in a diverse group of countries, including Chile, Costa Rica, Egypt, Guatemala, Hungary, India, Iran, Jordan, Mali, Macedonia, Mauritius, Morocco, Niger, Nigeria, Pakistan, Poland and Rwanda.

• The World Bank has also increased its focus on gender-informed lending and advisory services.

• A range of structural policy reforms are being implemented to eliminate gender distortions to promote sustainable growth.

• The international community, under the aegis of the UN, has been pursuing gender equality since 2000, which now features as one of the primary Sustainable Development Goals (SDGs).

Issues

• India is simultaneously a leader in promoting women’s participation in government but also a laggard in gender issues in the workplace. Its growth rate for manufacturing has been disappointing compared to its potential.

• Gender-based segmentation has not subsided in India. India’s gender balance in entrepreneurship and jobs remains among the lowest in the world. Improving this balance is an important first step for India’s development and its achievement of greater economic growth and gender equality.

• Globalization and trade policy reforms have made a limited contribution towards India’s convergence in gender segmentation, while domestic pro-competitive reforms are strongly associated with lower segmentation among male employees. Policies targeting the domestic competitive environment have been more effective in mitigating gender discrimination in the labour market.

India Status

• Gender gap includes the differences between women and men, as reflected in social, political, intellectual, cultural, economic attainments or attitudes.

• India has climbed six spots to be ranked 108 out of 145 countries in the World Economic Forum’s (WEF) gender gap index 2015. But it still ranks lower than its neighbours -Bangladesh and Sri Lanka.

Gap in political participation

• The gap in political empowerment is close to 55%.

• The present government increased women’s representation in Parliament from the previous 11.4% to 12.8 % but still hasn’t passed the Women’s Reservation Bill to ensure 33% seats for women in Parliament and assemblies. Even Afghanistan, which democratically elected its first government post the war, boasts of a higher 28%.

Gap in economic participation

• The highest gap, the WEF analysis said, is seen in economic participation and opportunities (more than 60%). In the 61 Indian cities that have a population of more than 750,000, for every four men in a permanent job, there is one woman.

• The economic status of women has dipped five places from a 135 to 139 in the WEF gender gap index. It points to the rise in unemployment, wage disparity and poor access to financial institutions.

Gap in health and survival status

• Women’s health and survival status in India are almost hitting rock bottom (143 out of 145). Malnutrition, maternal mortality and poor antenatal care are some key factors for this.

Women in workforce: India lags behind others

• While marginally more women work in India than in Pakistan (27% and 25% respectively), Pakistan’s female labour-force participation rate is growing as India’s is declining. The percentage of women working in Bangladesh is three times higher than in India.

• India ranks last among BRICS countries in terms of women’s labour-force participation. Among G-20 countries, it is second to last- Saudi Arabia being last.

• Countries often experience a dip in women’s labour-force participation as incomes rises and women drop out of low-paying menial work, usually in agriculture.

• But as the economy develops further and education levels rise, more and more women enter the labour force. India’s economy is well beyond the point when large numbers of women would be expected to enter the labour force, based on evidence from other developing nations.

• Despite the increasing number of women pursuing secondary and post-secondary education, India’s women keep dropping out. Since 2005, more than 25 million Indian women have left the labour force.

Benefits of drawing women to the workforce

• Working outside the home is associated with a number of positive empowerment outcomes for women.

• At the household level, women who participate in the labour force marry and have children later, and their children stay in school longer.

• Women who work have greater decision-making power within the household, and make more decisions jointly with their partners.

• Gender equality (and more specifically, women’s increased labour-force participation) contributes to economic growth is strong.

• An International Monetary Fund study said India’s GDP can expand by 27% if the number of women workers increases to the same level as that of men. A 2015 McKinsey report gives a more ambitious projection: India could boost 2025 GDP by 60% by promoting gender diversity at work.

What is stopping them? What can be done?

• Women face discrimination and disadvantage across all aspects of work. They earn less, they participate less, their employment status is more tentative, and the quality of the jobs they perform is lower than men.

• The International Labor Organization estimates that at the global level, 48% of women’s productive potential is unutilized
1. Women want to work. National Sample Survey (NSS) data show that 31% of women who spend the majority of their time performing domestic duties would like some kind of job.If all women who expressed a desire to work did so, Female Labour Force Participation Rate (FLFPR) in India would rise 21 percentage points (78%).

2. Jobs near home attract women. MGNREGA which provide employment near home in villages has seen increased participation from women over the last five years, and now employs slightly more women (52%) than men (48%).

3. Social norms create many hurdles for women. But they are mutable and broader economic trends and government policies

• ‘The Operation Blackboard ‘ initiative was launched in the 1980s, alongside a 50% quota for women teachers. Since then, the education sector has grown to employ the most number of women outside of agriculture.

• The gender wage gap across sectors in manufacturing is high–much higher than in services which have to be brought down through policy initiatives.

• Marital rape is still not a crime here; a rape is reported every 30 minutes.

• While there has been an increase in reported rape cases since 2012, the conviction rate has increased abysmally from 24.2% (2012) to 28% (2014).The Criminal Law (Amendment) Act 2013 which widened the definition of rape and increased the punishment for rapists is a positive step in this direction.

• The gender gap has been narrowed significantly in many countries because of the high level of participation of women in the labour force, lowered pay gaps and increased opportunities for women to move into leadership roles.

• Also gender equality is on the national agenda of such countries (eg. Norway) and policies are focused towards achieving that goal. If India has to develop, India must also make gender parity a national priority.

India could add 60% to 2025 GDP by bridging gender gap at work

• India can increase its 2025 gross domestic product (GDP), estimated at $4.83 trillion, by between 16% and 60% simply by enabling women to participate in the economy on par with men, according to a new study by the McKinsey Global Institute (MGI).

• According to the study The upper end of that range—if everything works out the way it should, or a so-called full-potential scenario—could add $2.9 trillion to India’s 2025 GDP.

• The lower end—the so-called best-in-region scenario in which all countries only match the rate of improvement of the best country in the region—could add $700 billion.

• Conducted in 95 countries, home to 93% of the world’s women, the study places a definitive value to increased women’s participation in the workplace.

• India has one of the world’s largest gender gaps when it comes to labour force participation, with women accounting for only 23-24% of the total labour force and generating a mere 17% of the share of GDP, finds the MGI study.

• This is far below the global average where female workers generate 37% of the world’s GDP.

• But India also has the biggest relative scope to add GDP at 16% in a best-in-region scenario.

• The full potential boost would be as much as 60%. Boosting female labour force participation in India would contribute 90% of gains in the full-potential scenario.

• In 46 of the 95 countries studied by MGI, the best-in-region outcome could increase annual GDP in 2025 by more than 10% over the business-as-usual case. But full participation in the workplace cannot take place without gender parity in society.

• According to report Economic development enables countries to close gender gaps, but progress on four indicators in particular—education level, financial and digital inclusion, legal protection and the reduction of unpaid care work—could help accelerate progress,

Manifestation of The gender gap

The workplace gender gap manifests itself in three ways.

• First, women do not participate in the same numbers as men and simply increasing labour force participation would account for 54% of potential incremental GDP.

• Second, women work fewer hours than men and closing this gap would generate 23% of GDP opportunity.

• Finally, women are disproportionately represented in lower productivity sectors such as agriculture. Shifting women into higher productive sectors such as business services at par with the employment patterns of men would contribute another 23% of the total opportunity.

• Exacerbating the gender gap in paid work is the fact that 75% of global unpaid work—child care, caring for the elderly, cooking and cleaning—is done by women. The unpaid care work of women could be valued at $10 trillion of output per year—an amount that is roughly equivalent to 13% of global GDP.

• A lot of work done by women is invisible, unquantified, unrecognized and unrecognizable; for instance, are not recognized as ‘work’ and nor are income-saving activities such as collecting firewood or water. Add that to GDP calculations, and the gains will be impressive.

• Women tend to drop out of the workplace because of a lack of flexibility. As they advance in their careers, they find that they have to balance increasing workplace responsibility with increasing family responsibility like ageing parents or teenage children. They end up with two jobs and find that they cannot cope.

• Economist Ajit Ranade agrees. “When a woman’s career starts to peak, she is suddenly confronted with multiple conflicting situations, marriage, children and so on”

• There is also an inordinate focus on bringing women into the paid workforce but not enough on involving men more in family responsibilities. Companies such as Flipkart, Vodafone, Accenture and Godrej recently announced enhanced maternity leave policies, and minister for women and child development Maneka Gandhi recently said women should get eight months maternity leave.

• Companies have begun focusing on gender diversity—increasing paternity leave, for instance. Last month, Intel India increased paternity leave from five days to 10. Companies such as Accenture have women employee mentorship programmes, a women’s network and training and leadership development for its women employees, said a company spokesperson.

Interventions

• The MGI study also looks at interventions to bridge the gender gap by both governments and the private sector. “Women need to be equal partners in society for them to be equal participants in work.

• The economic benefits that come from equality in work can then create momentum toward a further narrowing of gender gaps, provided countries use the dividend of higher growth to boost investment in inclusive social spending and urbanization.” ‘
• Interventions from governments include the enactment of laws that would remove barriers to women entering the workforce, mandating protection of women at the workplace and legislating quotas for women in political office and on company boards.

• Governments need to increase the size of the cake, making the right to work a fundamental right for all citizens, men as well as women.

• Increasing access to education and addressing dropout rates by girls at the higher school levels is another way to increase women’s workforce participation.

• In some services sectors, regulatory issues like women not being allowed to work night-shifts also need to be addressed.

• But the private sector also plays a role by lowering barriers to women moving into positions of responsibility, providing for family leave and leadership training and sponsorship of women.

• Companies stand to gain since “boosting gender diversity within their own operations could enhance companies’ staffing and talent; research suggests that increasing the presence and responsibility of women is correlated with improved company performance, and that there is a connection between the representation of women in leadership positions and corporate returns”, states the report. For instance, focusing on women could help firms enhance their understanding of their customer base and target women consumers better.

• The report concedes that “economic development alone is not sufficient for women to achieve their full potential”. For instance, while violence against women does tend to decrease as per capita GDP increases, it remains a global priority issue where women are not immune from violence even in the richest economies.

• The relationship between gender equality at work and overall economic development is even more nuanced. For instance, women in the poorest regions of the world tend to engage in paid work out of necessity.

• But, as incomes rise, households start to trade off the economic value of this paid work against unpaid household work. Therefore, states the report, there is need to identify strategies over and above the role played by economic development that “accelerate progress toward gender equality in work and in society”.

• These strategies could include bridging the gender gap in education that not only reap enormous social benefits such as lowering the prevalence of child marriage and improving reproductive and maternal health, but also enable greater participation in the paid workforce.

• Similarly, increasing access of women to the Internet, mobile phones and financial services has moderate correlations to gender equality indicators at work. For instance, greater access by women to the Internet which is an essential tool to job searches, networking, conducting businesses and receiving microcredit would boost labour force participation among women.

• Any strategy to bridge gender gaps will need to recognize significant variations in inequality within countries. In India, for instance, the issue of sex ratio is largely concentrated in the north, while child marriage is an issue that plagues the east. Labour force participation shows larger gaps for urban women at 22%, against 38% for rural women.

• But without tackling gender equality in society, economic benefits cannot be realized. “The first challenge is to understand the gender equality landscape in sufficient detail to be able to prioritize action. The next is to use that knowledge to engineer change,” says the report.

Challenges in closing the gender gap

• Lack of resources to implement promising gender policy initiatives. Governments mobilize resources for gender equality from multiple sources, including taxes, overseas development assistance and through public-private partnerships. But progress has been slow from mobilizing resources to close the gender gap.

• Domestic resources are particularly important for accelerating progress on gender equality. First, investing its own resources signals that a country is committed to achieving gender equality, which is important for both economic and ethical reasons.

Second, only domestic resources can ensure longer-term sustainability for those interventions and activities that are needed to create the fundamental transformation in the way that societies conceive of and organize men’s and women’s roles and responsibilities.

Eliminating the obstacles faced by women in economic participation Fiscal and financial reforms that eliminate gender gap can play a vital role.

Gender budgeting

• Gender budgeting improves gender equality through well-structured fiscal policies and adequate and properly monitored spending on gender-related goals.

• In some countries, gender budgeting has inspired fiscal policies in key areas of the budget, such as education, health, and infrastructure, that contributes to the achievement of gender-related goals.

• It has also improved systems of accountability for public spending for gender-related purposes.

• Some 60 countries, including Rwanda and Mexico, have already introduced gender budgeting.

• Gender budgeting efforts need to address key gender-related education and health goals as well as public infrastructure deficiencies, such as household access to clean water or electricity, that impose high unpaid work burdens on girls and women.

• Gender budgeting efforts can also contribute to improved administration of justice, law, and order, to help reduce violence against girls and women.

Gender-focused structural reforms

• It can increase women’s contribution to productivity growth, job growth, and improve advancement practices that promote talented women into leadership and managerial roles.

Increasing female labour force participation

• National Sample Survey (NSS) data for India show that labour force participation rates of women aged 25-54 have stagnated at about 26-28% in urban areas, and fallen substantially from 57% to 44% in rural areas, between 1987 and 2011.
Improved access to land and bank loans

• Women disproportionately face financial access barriers that prevent them from participating in the economy and from improving their lives. Access to credit can open up economic opportunities for women, and bank accounts can be a gateway to the use of additional financial services. However, women entrepreneurs and employers face significantly greater challenges than men in gaining access to financial services.

Higher levels of political representation

• India ranks 20th from the bottom in terms of representation of women in Parliament, as per the World Economic Forum’s Global Gender Gap Report 2012.

• To remedy the low participation of women electors, India in 1994 established quotas (reservations) vide the 73rd and 74th constitutional amendments to reserve 33 per cent of the seats in local governments for women.

• The Women’s Reservation Bill (108th amendment) that seeks reserve 33 per cent of the Lok Sabha seats for women is yet to be passed.

• Though increasing the number of women in national government may not guarantee an impact on governance, a critical mass of women in power can bring about transformation in leadership.

Conclusion

Empowering half of the potential workforce has significant growth benefits that go beyond promoting just gender equality. While policy interactions can be country-specific, gender and growth are intimately linked. Policy and structural reforms to eliminate gender gap can be a powerful tool for accelerating growth. Simply put, empowering half of the potential workforce has significant economic benefits beyond promoting gender equality.

Expected Questions

• Empowering half of the potential workforce has significant growth benefits that go beyond promoting just gender equality.

Analyze.

• What are the challenges emerges in bridging the gender gap analyze.

By Gudipati Rajendera Kumar