Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Henriette Kolb, head of Gender Secretariat at the International Finance Corporation (IFC), the private sector financing arm of the World Bank. Here she discusses how gender equality can boost economic growth.
Worldwide, women’s labor force participation is lower than that of men. Moreover, women often work in the informal economy and are more likely to be unpaid for their work or face significant wage gaps. A recent report, “Women, Work and the Economy,” published by the International Monetary Fund, highlights how this gender inequality in the work force hurts economic growth.
The report reveals that closing gender gaps in the labor market would raise GDP in the United States by 5 percent, in the United Arab Emirates by 12 percent, and in Egypt by 34 percent. The economic benefits of gender equality are particularly high in rapidly aging societies, where boosting women’s labor force participation could help offset the impact of a shrinking workforce.
Similarly, another recent report, “Investing in Women’s Employment,” published by the International Finance Corporation (IFC), confirms that better employment opportunities for women can also contribute to increased profitability and productivity in the private sector. Companies that invest in women’s employment often find that it benefits their bottom line by improving staff retention, innovation, and access to talent and new markets.
Last fall, several global companies, including Anglo American, Mriya, Odebrecht, and Rio Tinto, came together to learn how they could boost women’s employment in their firms. These private sector actors partnered with IFC’s Women in Business (WIN) program, which aims to generate ideas, best practices, and peer-learning around women’s employment. The resulting WINvest coalition – comprised of business leaders and IFC investment and advisory leaders — have identified a number of concrete interventions, including targeted training, childcare support, health services, and alternative work arrangements,that can enhance business performance and improve working conditions for women and men alike.
When companies invest in women, it pays off. For example, after Nalt Enterprise, a Vietnamese garment factory, established a kindergarten for workers’ children, staff turnover fell by one third. By encouraging more women to apply to its pre-hire engineering and construction skills training programs, Odebrecht, a global corporation, was able to recruit more workers, engage with local communities, and provide women with a foothold in the construction industry.
Overall, better jobs for women benefit individuals, families, communities, companies, and economies. With more income and financial independence, women can increase household spending on children’s nutrition, health, and education. The potential for social and economic change is too good to pass up.