Key message 3 – Gender inequities and lack of enabling conditions in the workplace keep women away

Women in the workforce are often discriminated against in terms of opportunities and remuneration, even when they possess the required education and skills. According to the ILO’s Global Wage Report 2018/19, weighted global estimates of the gender pay gap range from about 16% to 22%, depending on the measure used.

Other forms of gender inequities exist in the workplace. Ashraf et al. (2018) hypothesise that female entrepreneurs may be disproportionately harmed, relative to men, by weak rule of law. For example, women may avoid dealing with men in business for fear of expropriation or violence. The experiment with entrepreneurs in Zambia shows improving legal institutions reduces or eliminates the gender gap in trusting business partners or other entrepreneurs in the context of economic activity.

Additionally, workplaces in many countries often lack conditions that can support women in fulfilling their dual responsibilities at work and home effectively. These conditions include the right to paid family leave and to come back to equivalent work; flexible hours; fairly compensated home-based work; and access to good quality and affordable childcare facilities. There is also the grave issue of sexual harassment in the workplace. The effects of these factors on FLFP are important areas for further research.

Demand side matters

In addition to the ‘supply-side’ factors discussed in the first two key messages, FLFP is influenced by the ‘demand side’: The nature of available employment options.

Goldin (1995) hypothesised that FLFP is U-shaped across the process of economic development: It first declines and then rises. Initially, when incomes are low and agriculture is dominant, FLFP is high as women work on family farms. As production moves to the wider market, FLFP falls because of the social stigma associated with women undertaking manual work away from home – the only kind of wage labour available to those with low levels of education.

Given the low potential earnings of manual work, which are effectively even lower for women because of the social costs, combined with the presence of higher household incomes, women retreat into the household. As women’s education improves, better work opportunities become available to them that are more socially acceptable and pay well, encouraging women to re-enter the workforce.

However, in some developing countries, the creation of desirable jobs has not kept pace with the supply of educated workers. This interacts with norms around women’s role in domestic production, resulting in an adverse impact on the employment prospects of women.

In IGC research, Afridi et al. (2018) analyse nationally representative data from India and find that despite a decline in fertility and broad increases in female educational attainment over the past two decades, the share of working women has fallen over time.

The trend is driven by rural, married women: A possible reason is that their work preferences and reservation wage (the lowest wage at which a worker would be willing to accept a particular type of job) have changed due to an increase in their education, but there has not been a commensurate increase in work opportunities outside of agriculture (Chatterjee et al. 2015). Hence, they are choosing to stay at home – higher incomes of spouses enable them to do so – and investing their time in developing the human capital of their children, for which the returns are rising.

Female factory workers in Bangladesh face a glass ceiling

Data from garment factories in Bangladesh show that four out of every five production workers are women. In contrast, just over one in 20 supervisors is a woman. In an IGC project, Naeem et al. (2014) worked with local training companies to provide supervisor training to four female sewing machine operators and one male operator per factory, in about 60 ready-made garment factories in Bangladesh.

While female trainees outperform male trainees in management simulation exercises, they are less likely to be tried out or promoted. They also find evidence from survey responses and exercises that suggests female trainees face some initial resistance as supervisors, which could account for lower initial performance on the line. The resistance is rooted in social and cultural norms that do not accept women in positions of authority, and also male workers considering this to be an impediment to their own career progression.

Figure 1: FLFP in selected South Asian countries (%)