Women's Economic Roles And The Development Paradigm

Introduction

Women make up half of the world’s population and their full participation in economic activity is essential for achieving sustainable development and economic growth globally. Despite major progress in recent decades, women continue to face systemic barriers that restrict their economic opportunities and hinder development outcomes.

However, prevailing social, cultural and institutional norms still constrain women’s agency and economic potential. Persistent gender inequalities in earnings, employment, leadership and asset ownership continue to undermine inclusive growth. Tackling discriminatory laws and social norms, while expanding access to resources and opportunities for women, can yield a triple dividend - for women, their families, and nations’ economies.

The following sections will examine women’s roles in both the productive economy and the care economy, analyze gender gaps across economic indicators, and discuss policy approaches to promote women’s economic empowerment. The evidence affirms that achieving gender equality is not only a matter of rights, but smart economics. Unleashing women’s full potential can provide a powerful and transformative boost to development worldwide.

Women’s Labor Market Participation

Women’s labor force participation (LFP) rates have increased significantly over the past several decades in most regions of the world. However, there are still substantial differences in women’s LFP rates across regions.

In North America and Europe, women’s LFP rose steadily from the 1960s through the 1990s. While rates have plateaued or slightly declined in recent years, women’s LFP remains high in these regions at around 57-63%.

In contrast, women’s LFP in South Asia and the Middle East remains very low by global standards. Rates have slowly increased from extremely low bases of around 20-30% in the 1980s and 1990s to 33-35% today. Sociocultural norms that emphasize women’s domestic roles continue to constrain female participation.

East Asia has witnessed the most dramatic surge in women’s LFP, rising from the 50-60% range in the 1980s to over 70% today. Economic development and rising educational attainment have drawn more women into the labor force.

Latin America has also seen significant increases in women’s LFP, from around 40% in the 1980s to 54% currently. However, rates still lag those of other middle income regions.

Sub-Saharan Africa has high average rates of women’s LFP at over 60%, partly reflecting the predominance of informal and agricultural employment. Rates vary widely across countries in this diverse region.

The Feminization of Poverty

The feminization of poverty refers to the increasing prevalence and proportion of women among the world’s poor over the past few decades. This phenomenon is closely tied to persistent gender inequalities in economic participation, pay, access to resources, and vulnerability to poverty.

Global data shows that women are more likely to live in poverty than men. For example, estimates suggest over 600 million women live in extreme poverty globally compared to just under 500 million men. The prevalence and depth of poverty is often greater for women across regions like sub-Saharan Africa, South Asia, and Latin America.

Several factors drive the feminization of poverty. Women face significant barriers to paid work and decent jobs, and tend to be concentrated in informal, vulnerable, and low-paying sectors. Household dynamics often allocate more resources to male members. Globalization has adversely impacted women workers in sectors like agriculture and textiles. Discrimination in institutions like credit and financial markets also hamper women entrepreneurs and breadwinners.

Tackling the root causes of gender gaps in economic participation, wages, and access to resources is key to reversing the feminization of poverty. More equitable development policies, programs, and interventions are needed to uplift poor women out of poverty.

Women’s Unpaid Work

Women around the world disproportionately shoulder the burden of unpaid domestic and care work. This includes routine housework like cooking, cleaning, and laundry, as well as the physical, emotional, and educational care for children, the elderly, and the sick.

Time-use studies conducted in diverse countries have quantified women’s disproportionate responsibility for unpaid work. For example, time-use surveys in both developed and developing countries show that women spend between 2 to 10 times more time on unpaid work than men. In India, women spend around 352 minutes per day on unpaid domestic and care work compared to men’s 52 minutes. In South Africa, women spend almost 5 hours per day compared to under 2 for men. In Norway, considered one of the most gender-equal countries, women still spend around 3.5 hours per day versus men’s 2.5 hours.

This unequal division of unpaid work has significant implications. Performing a “second-shift” of domestic duties after a paid job restricts women’s leisure time and impacts health and well-being. In low-income contexts, long hours collecting water, fuelwood, and other domestic necessities leave little time for income-generating work. Caring for children and the elderly full-time often comes at the expense of girls’ education or women’s participation in the formal labor force. Thus, redistributing unpaid care work is critical for achieving gender equality and women’s empowerment across countries and income levels.

Gender Pay Gap

Despite significant progress in female educational attainment and labor market participation over the past decades, a persistent gender pay gap remains evident across economies. On average, women are paid only 75% of what men are paid. Significant variations exist across countries, ranging from over 15% in developed economies to 30-50% in some developing countries.

Several factors contribute to explaining the gender pay gap:

• Occupational segregation - Women are overrepresented in lower-paying occupations and underrepresented in higher-paying STEM fields. Horizontal segregation concentrates women in specific sectors such as education, healthcare and domestic work.
• Motherhood and care penalties - Women’s careers and earnings suffer due to time taken off for childbearing and caring responsibilities. Maternity leave and career breaks related to unpaid care work reduce women’s lifetime earnings.
• Discrimination and bias - Conscious and unconscious biases in hiring, compensation, promotion and career advancement directly impact the gender pay gap. Women are less likely to be promoted and take longer to attain senior roles.
• Access to education and skills - Lack of access to quality education and vocational training presents barriers to entry and career progression for women in higher paying jobs.
• Lack of wage transparency - Pay secrecy makes it difficult for women to contest pay discrimination and the gender pay gap.

Tackling occupational segregation, care penalties, discrimination and lack of wage transparency are critical to closing the gender pay gap. Enabling equal pay for work of equal value is vital for achieving gender equality.

Women’s Entrepreneurship

Women’s entrepreneurship has become an important driver of economic growth and job creation around the world. However, women entrepreneurs continue to face barriers that limit their potential.

Some key trends in women’s entrepreneurship include:

• The number of women starting businesses has increased significantly in recent decades. Women now represent over 30% of all entrepreneurs globally.
• Growth in women’s entrepreneurship has been particularly high in developing countries, where women often lack other economic opportunities.
• Women entrepreneurs tend to be concentrated in retail, services and care-related sectors like education, health care and beauty services.
• The majority of women-owned firms remain small, with little growth beyond the startup stage. Only 2.2% of women entrepreneurs have ventures that have scaled to $1 million or more in revenue.

Several obstacles continue to hinder women entrepreneurs, including:

• Lack of access to capital - Women have less savings, assets and collateral to obtain business financing from traditional sources. They are also less likely to attract venture capital.
• Limited networks - Women often lack connections to mentors, suppliers, distributors and other resources that are critical for growing a business.
• Unpaid work burden - Women carry a disproportionate share of household responsibilities, limiting the time available for business activities.
• Discrimination and gender bias - Women face direct and indirect discrimination in registering businesses, interacting with officials, and accessing services.

Despite these challenges, women’s entrepreneurship has huge potential for economic and social development:

• Women’s businesses create jobs and income opportunities for other women as employees and suppliers.
• Women reinvest up to 90% of their earnings into their families and communities, spreading benefits more broadly.
• Women entrepreneurs serve as role models and inspiration for future generations of women business leaders.

With appropriate policies and support systems, women’s entrepreneurship can thrive and make substantial contributions to sustainable and inclusive growth around the world.

Access to Financial Services

Women face substantial barriers in accessing financial services that enable economic participation and growth. A significant gender gap exists for formal account ownership at banks and other financial institutions. According to the World Bank, 65% of women have an account at a bank or financial institution, compared to 72% of men globally. This 7 percentage point gender gap persists across regions.

There are also substantial credit gaps for women-owned small and medium enterprises (SMEs). An IFC report estimates the global credit gap for women-owned SMEs at $1.5 trillion. Women face constraints in providing collateral for loans and receiving approval based on discriminatory lending practices. Access to credit allows women entrepreneurs to start and expand businesses, stimulating economic growth. However, women are disproportionately denied the required financial capital.

Initiatives to increase women’s access to financial services include reforms allowing alternative forms of collateral, requirements for banks to disclose gender-disaggregated data, financial literacy programs, and targeted lending to women entrepreneurs. Access to financial services empowers women economically and enables broader participation and leadership. Tackling gender inequality in finance is crucial for women’s economic inclusion.

Women in Decision-Making

Women continue to be underrepresented in leadership and decision-making positions in both politics and business. Despite progress in recent decades, women only make up around 25% of national parliamentarians globally. There are only 22 women serving as head of state or government out of nearly 200 countries.

The lack of women in politics impacts policies related to women’s rights and interests. Research shows that as the number of female politicians rises, more policies are passed related to issues like health, education, childcare, and violence against women. Having more women in office provides role models and inspires more women and girls to be politically active.

In the private sector, women face similar barriers reaching senior management and board positions. Less than 10% of CEOs in S&P 500 companies are women. However, studies demonstrate that companies with greater gender diversity, especially at the top, perform better financially.

Overall, empowering more women to take on leadership roles and having gender balance in decision-making is vital for economic development, strengthening democracy, and creating inclusive institutions. More must be done through policies like gender quotas and mentoring programs to open pathways for women leaders. Achieving equality in leadership will lead to better outcomes for women and for society as a whole.

Development Policies and Programs

Over the past few decades, there have been several initiatives aimed at empowering women economically and promoting gender equality through development policies and programs. Some examples of successful programs include:

• Microfinance initiatives that provide small loans, savings accounts, and other financial services to women entrepreneurs in developing countries. Studies show microfinance helps increase women’s income, savings, and household expenditure. Examples are the Grameen Bank in Bangladesh and FINCA International.
• Conditional cash transfer programs like Mexico’s Prospera that give money to poor families if they send girls to school. This boosts female education and improves gender equity.
• Quota laws that require a certain percentage of political candidates to be women. More than 130 countries have used gender quotas to increase women’s political participation and representation.
• Vocational training and skills development programs tailored specifically for women. For instance, the STRIVE program in India trains women for jobs in retail, hospitality and more.

However, there are still areas needing improvement when it comes to development policies for women’s economic empowerment:

• Eliminating legal and social barriers that prevent women’s equal participation in the workforce and control over assets/resources. Many countries still have discriminatory laws on inheritance, property ownership, opening a bank account, etc.
• Designing fiscal policies, taxation, and public spending in a way that benefits women and promotes gender equality. Government budgets often lack gender-responsive allocation.
• Ensuring equal pay, parental leave, and anti-discrimination laws to create an enabling environment for women at work. Enforcing pay transparency and closing the gender pay gap remains a challenge.
• Involving women directly in policy and program design. There is a need for greater representation of women in leadership roles in government, NGOs and the private sector.
• Improving collection of sex-disaggregated data. Better gender statistics are essential for evidence-based policymaking.
• Increasing accountability and monitoring & evaluation of gender impacts. This can help identify what works and what doesn’t in advancing women economically.