In both developing and developed countries, significant gender gaps remain in labor markets: women have lower rates of paid employment than men, they frequently earn less income for similar work, and they cluster in part-time employment and in more precarious sectors that produce low-value goods.
As a new USAID-commissioned report written by the International Center for Research on Women under USAID’s Improving Business Environments for Agile Markets contract argues, research shows that addressing these gender gaps can yield significant economic and social gains, including accelerated and more inclusive economic growth, increased efficiency and productivity, lower incidence of poverty, more equal income distribution, and a healthier tax base for government revenues. Yet the quest for improving women’s labor force participation must run parallel with efforts to recognize and address women’s disproportionate care burdens and to create decent jobs by fostering strong labor market institutions and social protection.
Most interventions designed to improve women’s labor force participation are often concentrated on the supply side, which include activities focused on improving workers’ skills through education, training, and workforce development. Without a doubt, women may have a particular set of needs in terms of workforce development: women tend to have more limited networks that they can use to access employment, they often have fewer marketable job skills, and their skills development is likely to have been focused on a narrower range of occupations.
Demand-side interventions can also be powerful as tools to increase women’s economic participation. Demand-side interventions stimulate the demand for employment and provide incentives for hiring and retention of workers. Some of these programs provide emergency employment or cash-for-work during the lean season in rural areas or in response to a disaster. Other demand-side interventions focus on providing credit to sectors that may disproportionately employ women with the aim of increasing both output and employment. Regulatory reforms can also increase women’s access to jobs, reduce discrimination, or remove barriers that prevent women from holding certain types of occupations; these can be used proactively to increase women’s employment in certain sectors and occupations. Moreover, increasing investment in care infrastructure and services can stimulate women’s employment in those services, and enable more women to enter the workforce. In fact, recent studies have shown that boosting investment in early childhood care and education and in elder care services in some countries would create more jobs — and more decent jobs — than an increase in investment of the same size in physical infrastructure, with a higher proportion of the new jobs going to women.
Yet investing in either the demand- or supply-side of the labor market is unlikely to ensure women’s access to better jobs without corresponding investments in stronger and more effective labor market institutions and social protection. Where women are disproportionately responsible for unpaid care work (e.g., cooking, taking care of children), social protection — in the form of healthcare, pensions, income support for the poor, and unemployment assistance — has the potential to both increase the demand for women’s labor and mitigate the costs of informal and precarious work for women and their families. Providing subsidized, affordable, and quality childcare has been proven to increase women’s entry into and continued participation in the labor force, particularly for low-income women. Flexible workplace practices can help improve the quality of part-time work, particularly for women (who are more frequently found in part-time jobs), and they can foster greater gender equality by allowing men to adjust their working hours to accommodate their responsibility and right to care for children and family members. Raising minimum wages in specific middle-income contexts may provide another effective way to promote greater gender equality in labor markets. Finally, organization and collective bargaining also have tremendous potential to yield improvements in the terms and conditions of employment for women.
Working on both the demand and supply side while also strengthening labor market institutions and social protection has the potential to secure meaningful improvements in the terms and conditions of women’s employment, reduce labor market segmentation by gender, and foster sustainable institutions that help to promote greater gender equality in the workplace. Making these investments through development and trade assistance, in procurement policy, and within global value chains will support more gender-equitable, inclusive, and sustainable economic growth.