Workplace parity can help economic recovery
Policies to tackle structural gaps in women’s access to education, employment and finance will help to sustain the economic recovery of emerging markets after Covid-19, according to Moody’s Investors Service.
Governments in several emerging markets have factored gender into their recovery policies and introduced measures to address unpaid care work, job market participation and violence against women, a report by the credit rating agency said yesterday.
While gender-focused income support could improve the economic security of women, structural measures to improve their access to education and the workforce “are more likely to create enduring change and promote sustainable growth over the long term”, said Atsi Sheth, managing director of credit strategy at Moody’s.
Covid-19 affected employment in several sectors such as hospitality and tourism where women are highly represented. Many were forced to drop out of the workforce to take care of children and other family responsibilities after the pandemic led to school closures.
Several countries such as Chile, Colombia and Mexico have since introduced educational programmes to boost the workforce participation of women.
Moody’s said greater economic participation by women would boost growth and productivity, widen tax bases and mitigate household income volatility. This would support the broader credit environment for a range of debt issuers.
The coronavirus crisis threatens to undo years of hard-won economic and social gains for women, according to the International Monetary Fund.
In developing countries, women are over-represented in the informal sector where they are underpaid and have less job security and social protections, the fund said. In such countries, more girls have dropped out of school to help at home.
“These disparities worsen already-large gender gaps that persisted before the crisis,” IMF chief economist Gita Gopinath said in a speech on Monday.
While women have been successful in pushing the boundaries to lead corporations and countries, “there is much more than needs to be done to achieve gender equality”, she said.
The workforce participation of women worldwide is 55 per cent, compared with 78 per cent for men.
In 72 countries, women are barred from opening bank accounts or obtaining credit.
Female workers continue to earn about 50 per cent less than their male co-workers for the same type of work.
At a political level, only a quarter of parliamentarians are women.
Ms Gopinath said there is also a clear case for gender equity.
“Tapping into the huge potential of women is a win-win for both women’s empowerment and inclusive global economic growth,” she said.
She highlighted three main advantages, the first being that gender equity in the job market can significantly improve national income.
Secondly, better economic opportunities and equal pay will reduce gender and income inequality, leading to higher and more durable growth.
Thirdly, Ms Gopinath said banking boards with more female directors have been associated with greater financial sector resilience, a reduced chance of insolvency and increased profitability.
To achieve these economic gains, the responsibility of empowering women must be shared by governments, the private sector and international bodies, she said.
Ms Gopinath urged governments to use their fiscal policies to help advance the cause of women and improve their financial inclusion.
Gender budgeting can ensure that tax and spending policies improve the access of women to opportunities in education and the workplace.
Higher spending on childcare and flexible working arrangements were also listed as crucial to the reduction of gender gaps in labour market participation.
Well-designed workplace regulations backed by law and tax policy reforms that penalise secondary earners – who are often women – would boost the economic participation of female workers, she said.
Ms Gopinath also called on governments to “level the playing field for women” by removing outdated legal, regulatory and institutional impediments.
She encouraged the private sector to promote gender equity by ensuring equal pay for equal work. Companies were urged to offer women mentoring and leadership opportunities, flexible schedules, travel and childcare subsidies and to adopt zero tolerance towards workplace harassment.
The finance industry can also step up to improve the financial inclusion of women.
Currently, seven in 10 female-owned businesses in developing countries are underserved by financial institutions.
In a separate report, PwC said a “shecession” was unfolding due to the pandemic, which is expected to undo the progress made by women in the workplace and set it back to 2017 levels by the end of this year.
The consultancy said that if policies failed to address this disproportionate impact, women would be forced to return to low-paying positions that require lower skills.
The IMF said women’s empowerment must be championed by governments, the private sector and global bodies