The traditional economic rationale for increased female labour force participation is that it benefits women directly and society indirectly. A new argument looks at how increased female labour force participation can boost aggregate economic growth and hence, benefit everyone on average. Yet, several factors hinder women’s productive employment.
At 49%, the global female labour force participation (FLFP) rate is 27 percentage points below that of men. While the gap has narrowed since 1990, the rate of progress has been slowing and is expected to halt, or even reverse, by 2021. Further, there are considerable differences across countries at different stages of development (International Labour Organisation (ILO), 2018).
Innate abilities are presumably uniformly distributed across genders and firms should ideally be able to tap into the best talent. However, if half of the potential talent pool faces artificial barriers in joining the labour force, the choice set shrinks, which is sub-optimal for economic growth at large.
New International Monetary Fund research (2018) shows that if the strong complementarities between women and men in production are accounted for, the economic benefits of adding women workers are possibly larger than previously suggested. For countries ranking in the bottom-half for gender equality, closing the gender gap could increase gross domestic product by 35% on average – one-fifth of this gain is due to the gender diversity effect on productivity.
Women’s work participation is also intrinsically desirable: When women take up paid work outside the home, they are likely to have greater bargaining power within the household, which has positive effects on their well-being and that of their families (World Bank 2001).
This Growth Brief presents International Growth Centre (IGC) and related research on the key factors that constrain FLFP in developing countries and strategies to address these constraints. The discussion is structured by ‘spaces’, with a focus on social and cultural norms in the home space; issues of safety and mobility in the public space; and gender inequities and lack of enabling conditions in the workplace. Many of these barriers are cross-cutting – particularly norms – and interlink across spaces.
- Cultural and social norms, and their manifestations, prevent women from realising their full economic potential. In many societies, a preference for sons puts girls at a disadvantage in terms of human capital investment by families, and ownership and control of assets. Early marriage and childbearing also limits girls’ education and workforce participation. Moreover, married women face ‘time poverty’, as domestic chores and childcare are primarily considered ‘women’s work’.
- Safety concerns restrict women’s physical and economic mobility. In some contexts, women are unable to move around freely due to safety concerns and the perception that public spaces are ‘male spaces’. Besides weak rule of law, these challenges are linked to norms around gender segregation. This constrains women’s workforce entry and progression, access to education and skilling, and to professional networking opportunities.
- Gender inequities and lack of enabling conditions in the workplace keep women away. Women in the labour force are not given equal opportunities and remuneration vis-à-vis men. The workplace also lacks enabling conditions to support women in managing dual responsibilities at work and home effectively. Further, the insufficient creation of desired jobs interacts with norms around women’s role in home production to adversely impact female employment.