Family-friendly policies increase women’s labor
force participation, benefiting them, their families, and society at
Female labor force participation is mainly
driven by the value of women’s market wages versus the value of their
non-market time. Labor force participation by women varies considerably
across countries. To understand this international variation, one must
further consider differences across countries in institutions, non-economic
factors such as cultural norms, and public policies. Such differences
provide important insights into what actions countries might take to further
increase women’s participation in the labor market.
Subsidized childcare fosters maternal
employment, but employment status, childcare quality, and availability
Women’s labor force participation has rapidly
increased in most countries, but mothers still struggle to achieve a
satisfactory work−life balance. Childcare allows the primary caregiver,
usually the mother, to take time away from childrearing for employment.
Family policies that subsidize childcare and increase its availability have
different effects on female labor supply across countries. For policymakers
to determine how well these policies work, they should consider that policy
effectiveness may depend on country-specific pre-reform female employment
and earnings, and childcare availability, costs, and quality.
A mix of policies could be the solution to
reducing discrimination in the labor market
Discrimination is a complex, multi-factor
phenomenon. Evidence shows widespread discrimination on various grounds,
including ethnic origin, sexual orientation, gender identity, religion or
beliefs, disability, being over 55 years old, or being a woman. Combating
discrimination requires combining the strengths of a range of
anti-discrimination policies while also addressing their weaknesses. In
particular, policymakers should thoroughly address prejudice (taste-based
discrimination), stereotypes (statistical discrimination), cognitive biases,
and attention-based discrimination.
Individual and environmental factors can lead
women to start innovative market-expanding and export-oriented ventures—or
Female-led ventures that are market-expanding,
export-oriented, and innovative contribute substantially to local and
national economic development, as well as to the female entrepreneur’s
economic welfare. Female-led ventures also serve as models that can
encourage other high-potential female entrepreneurs. The supply of
high-potential entrepreneurial ventures is driven by individuals’
entrepreneurial attitudes and institutional factors associated with a
country’s conditions for entrepreneurial expansion. A systematic assessment
of those factors can show policymakers the strengths and weaknesses of the
environment for high-potential female entrepreneurship.
Gender quotas for women on boards of directors
improve female share on boards but firm performance effects are mixed
Arguments for increasing gender diversity on
boards of directors by gender quotas range from ensuring equal opportunity
to improving firm performance. The introduction of gender quotas in a number
of countries has increased female representation on boards. Current research
does not justify gender quotas on grounds of economic efficiency. In many
countries the number of women in top executive positions is limited, and it
is not clear from the evidence that quotas lead to a larger pool of female
top executives, who are the main pipeline for boards of directors. Thus,
other supplementary policies may be necessary if politicians want to
increase the number of women in senior management positions.
Despite major efforts at equal pay legislation,
gender pay inequality still exists in the developed economies. How can this
be put right?
Despite equal pay legislation dating back 50
years, American women still earn 22% less than their male counterparts. In
the UK, with its Equal Pay Act of 1970, and France, which legislated in
1972, the gap is 21% and 17% respectively, and in Australia it remains
around 17%. Interestingly, the gender pay gap is relatively small for the
young but increases as men and women grow older. Similarly, it is large when
comparing married men and women, but smaller for singles. Just what can
explain these wage patterns? And what can governments do to speed up wage
convergence to close the gender pay gap? Clearly, the gender pay gap
continues to be an important policy issue.
Can free-trade policies help to reduce gender
inequalities in employment and wages?
Women consistently work less in the labor
market and earn lower wages than men. While economic empowerment of women is
an important objective in itself, women's economic activity also matters as
a condition for sustained economic growth. The political debate on the labor
market impacts of international trade typically differentiates workers by
their educational attainment or skills. Gender is a further dimension in
which the impacts of trade liberalization can differ. In a globalizing world
it is important to understand whether and how trade policy can contribute
toward enhancing gender convergence in labor market outcomes.
An unequal distribution of resources within the
family is a special concern for female poverty
Transition to a market economy is accompanied by
a period of greater economic uncertainty. Women are likely to suffer
substantial disadvantages from this uncertainty compared to men as they are,
for example, more likely to lose their job. This not only implies a monetary
loss for the entire family, but also degrades female bargaining power within
the household, possibly further aggravating their well-being. When
intra-household inequality—an unequal distribution of resources among family
members—exists, female poverty might be significantly larger than what can
be deduced using standard household based poverty measures.