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Friday, March 8, 2013

WHAT WE CAN DO TO IMPROVE WOMEN’S ECONOMIC OPPORTUNITIES



By Christine Lagarde

Christine Lagarde is a French lawyer and Union for a Popular Movement politician who has been the Managing Director of the International Monetary Fund since 5 July 2011

Today, I invite all of you to celebrate International Women’s Day. Let’s celebrate the incredible progress women have made over the past decades in different parts of society, playing a key role in economic life that our grandmothers worked for and dreamed about. Today, although men still dominate the executive suites in most professions, women all over the world hold high positions in the private sector and in public office. Women are no longer the Second Sex Simone de Beauvoir wrote about.

But far too many women face the most fundamental challenges: the right to safety and to choose the life they want.

Across the globe, fewer women than men are in paid employment, with only about 50 percent of working-age women participating in the labor force. In many countries, laws, regulations and social norms still constrain women’s possibilities to seek paid employment. And all over the world women conduct most of the work that remains unseen and unpaid, in the fields and in households.

Women who get paid for their work earn less than their male colleagues, even when doing the same work, which economists call the gender wage gap. Across the advanced and emerging economy countries that are members of the Organisation for Economic Cooperation and Development, the gender wage gap is about 16 percent. Many women take career breaks or work part time to take care of children and elderly family members, and therefore get lower pensions—a problem in itself, and one with implications for public finances.  And tax regimes often impose a higher tax on so-called “second earners” in the family, reducing the incentives for women to work.

The economic crisis has only complicated this picture. In developing economies, girls’ school completion rates have dropped more rapidly than those of boys.  In advanced economies female unemployment has been on the rise—for instance in Portugal and Spain. If these trends were to persist beyond the crisis, they could spell further trouble for women’s participation in the labor market.

Women have huge talents. Employers who don’t offer equal opportunities to women simply ignore a large part of the skilled workforce. In many countries, growth could be much higher if more women were in paid employment. In Japan, for example, raising the female labor force participation rate to Northern European levels would permanently raise per capita GDP by 8 percent.  Women also have great entrepreneurial potential.  For instance, women-owned companies represent between 30 and 40 percent of formal small and medium-sized enterprises in emerging markets.   Also, raising women’s incomes will improve education levels, as research  shows that women spend a larger share of their income on the welfare of their children.

This will take changes in a wide range of areas, and let me mention a few I think can begin to make a difference.

Politicians can change legislation to provide equal opportunities for women to own property, get credit, and work outside the home. And equal access to health services, education, and vocational training will prepare women for paid employment. Better infrastructure, transportation, and child care will also allow more women to seek paid work. In rural South Africa, for example, access to electricity gave women the opportunity to work less in the household and more outside the home, increasing women’s labor force participation by about 9 percent. And in Mexico, the federal daycare program for working mothers has helped low-income mothers.

In advanced economies, more women will work if they have access to parental leave and affordable child care. Sweden is a good example of this, with a difference in labor force participation rates between men and women of only 6 percentage points, compared to 25 percentage points in Japan. Breaking down the barriers between part-time and full-time work contracts also encourages women to join the work force. For example, in the Netherlands the female labor force participation rate increased from about 35 percent in 1980 to more than 80 percent in 2008, largely as a result of more attractive part-time work options. And flexible work arrangements help women to juggle their many responsibilities and to achieve a better work-life balance.

We can help. The International Monetary Fund is in continuous dialogue with its member countries on how to achieve stability and growth. Women’s labor force participation is one part of this equation—all the more so at a time when many countries are struggling with the fiscal impact of aging populations and high public debts.  Access to financing for small and medium-sized enterprises is another key issue.  We are not experts in all the complex elements at work in this area, but we can flag issues and draw on the expertise of others. In addition, we can use our fiscal expertise to look into ways to assess whether tax regimes and the allocation of public resources contribute to gender equality and better opportunities for women.

Today, on International Women’s Day, we see both amazing achievements and formidable challenges. But I am an optimist and see beyond these challenges; our daughters and granddaughters will have even better opportunities than women have today. And let us always remember that when women are allowed to develop their full potential, it is not only women who gain, but the whole world.

http://blog-imfdirect.imf.org/2013/03/07/what-we-can-do-to-improve-womens-economic-opportunities/

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