Women’s empowerment drives development

Image: Flickr user ILO in Asia and the Pacific, CC BY-NC-ND 2.0

Lauren Woodbury

A growing body of evidence from around the world makes clear that progress towards gender parity contributes to overall economic growth. Therefore, policies designed to empower women are not merely a moral or social imperative, but are also worthwhile because they bring broader economic benefits. Women’s empowerment includes not only their participation in the labor force, but also women’s agency to “formulate strategic choices and to control resources and decisions that affect important life outcomes.”[1]

Globally, reducing the gender gap stimulates economic growth

The strong positive correlation between greater gender equality (especially in education and labor participation) and economic development holds across countries and time.[2] For instance, studies indicate that a reduction of the gap between males and females has been an important driver of European economic growth in the last decade, while greater female participation in the US labor force accounts for a quarter of its current GDP. From 1970 to 1990, Asian-Pacific economies grew by 1.96 percent for every 1 percent increase in women’s participation in non-agricultural employment. Women’s economic participation may have contributed 35 to 40 percent of the annual economic growth of newly industrialized countries over the last three decades.[3] Similarly, estimates show that economic output could increase by as much as 25 percent in developing countries if barriers against women working in major sectors are eliminated. Figure 1 below demonstrates the strong correlation between greater gender equality and GDP.[4]

Figure 1: Gender Gap and Per Capita GDP

WomenEmpowermentEconGrowth_WEFGenderGapReport2007Source: World Economic Forum Gender Gap Report 2007

How gender-equal access yields economic and social benefits

The overall benefit of improving women’s access to education and economic inputs is well documented.[5] Education not only makes women more productive workers, but it also has broader benefits. A year of primary education corresponds to a 10 to 20 percent increase in wages later in life, while a single year of secondary education increases wages by another 15 to 25 percent.[6] An additional year of a woman’s education also correlates with a 5 to 10 percent reduction in the risk of infant mortality for her children, and to a reduction in fertility rates and maternal mortality.

Moreover, there is a strong connection between improvements in women’s status and autonomy and investments in their children’s health and education (especially girls).[7] Mothers who had access to education are more than twice as likely to send their own children to school as mothers with no education. Women also tend to spend a greater portion of their income on family necessities including food, and improvements in women’s status corresponds to lower rates of child malnutrition.[8]

Studies also show that gender inequality in education directly harms economic growth by lowering the average level of human capital.[9] In the Asia-Pacific region it is estimated that between $16-30 billion is lost annually as a result of gender gaps in education.[10]

Equal access to economic inputs is also crucial. For example, the Food and Agriculture Organization estimates that agricultural output could increase by 2.5 to 4 percent in developing countries if women farmers had the same access as men to agriculture inputs such as land and fertilizers.  Figure 2 below maps out the relationship between gender equality and poverty reduction.

Figure 2: Relationship Between Gender Equality and Poverty Reduction

Source: UNWTO. Global Report on Women in Tourism, 2010

Ultimately, the global evidence indicates that gender equality is fundamental to whether societies thrive or not,[11] and a failure to develop and utilize the capabilities of its female population can be understood as a key inhibitor of Pakistan’s growth. Empowering women should be understood as a “prerequisite for sustainable development.” Therefore, if Pakistan’s policy makers are serious about maximizing growth, they cannot afford to treat women’s empowerment as a tangential issue. Policies to empower women and remove the barriers they face in the labor market must be top priorities. Moreover, investments in women generally create larger economic returns than those in men, making programs that target women a wiser investment in resource-strapped countries like Pakistan.[12]

A future blog will specifically address the implications of women’s empowerment for growth in Khyber Pakhtunkhwa.

Lauren Woodbury holds a Master of Public Policy and is currently the Program Manager at the Women’s Health Intervention and Development Initiative.

[1] Malhotra, A. and Schuler S.R. (2005) Women’s Empowerment as a Variable in International Development. in Narayan, D. (2005). Measuring Empowerment: Cross-disciplinary Perspectives. The World Bank. p. 73

[2] See for example Doepke, M. and Tertilt, M. (2014). Does Female Empowerment Promote Economic Development? Working Paper 19888. National Bureau of Economic Research. Cambridge, MA.;  Kabeer, N., 2005, “Is Microfinance a ‘Magic Bullet’ for Women’s Empowerment? Analysis of Findings from South Asia,” Economic and Political Weekly.; Lawson, S., 2008, “Women Hold Up Half the Sky”, Goldman Sachs Global Economics Paper No.164.; and Duflo, E., 2012, “Women Empowerment and Economic Development,” Journal of Economic Literature, Vol. 50, No. 4: pp. 1051-079.

[3] USAID. (July 2007). Pakistan’s Agenda for Action, Developing the Trade and Business Environment 2007 Assessment, Booz Allen and Hamilton.

[4] The author modeled per capita GDP and GGI score data for several additional years and found the correlation remained consistent.

[5] Cuberes, D. and Teignier-Baque, M. (2011). Gender Equality and Economic Growth: Background Paper for the World Development Report 2012.

[6] Sperling, G. and Herz, B. (2004). What Works in Girls’ Education: Evidence and Policies from the Developing World. Council on Foreign Relations.

[7] Durrant, V. and Sathar, Z. (2000). Greater investments in children through women’s empowerment: a key to demographic change in Pakistan? Population Council Policy Research Division. New York.

[8] Food and Agriculture Organization of the United Nations (FAO). (2011). The State of Food and Agriculture 2010-2011: Women in Agriculture- Closing the Gender Gap for Development.

[9] Klasen,S. (2002). Low Schooling for Girls, Slower Growth for All? Cross-Country Evidence on the Effect of Gender Inequality in Education on Economic Development. The World Bank Economic Review. Vol. 16, No. 3

[10] WEF p. 39

[11] WEF. p. 29

[12] Organization for Economic Cooperation and Development (OECD). (2008). Gender and Sustainable Development: Maximizing the Economic, Social, and Environment Role of Women. p. 18