omen make up at least 50% of all segments of society, including marginalized populations such as youth, religious or ethnic minorities, and the LGBTQI+ community. Empowering women economically makes markets more inclusive and resilient. It’s well-documented that women’s economic realities and experiences are often very different from men’s. This is, in part, due to gaps in women’s legal rights. In its 2021 Women, Business and Law report, the World Bank identified eight key areas where women are impacted by law: mobility, workplace, pay, marriage, parenthood, entrepreneurship, assets, and pension.
We must advocate for women’s rights and commercial interests to ensure their economic empowerment. Advocacy—whether aimed at public policy or public opinion—helps marginalized segments of the population make their voices heard, making possible more just laws, institutions, and social norms.
The World Bank report touted the potential of Women’s Economic Empowerment (WEE) programs. These programs work to ensure equality of access for women and men when it comes to petitioning governments and thereby shaping institutions and policies. The World Bank explained such programs are “…likely to lead over time to more representative, and more inclusive, institutions and policy choices.” This suggests that any programs that help ensure equal access to opportunities and resources for excluded or marginalized population segments will help to make for more inclusive democracies.
The United States Congress has prioritized women in foreign assistance through legislation such as the 2019 Women’s Entrepreneurship and Economic Empowerment Act (WEEE Act). The WEEE Act requires 50% of USAID resources supporting micro, small, and medium enterprises to target businesses owned, managed, or otherwise controlled by women. It also requires program and performance monitoring efforts to include goals with a gender disaggregated basis. Both the Trump and Biden Administrations have since championed women’s empowerment in their presidential budgets through their Women’s Global Development and Prosperity (W-GDP) and Gender Equity and Equality Action (GEEA) funds at USAID.
Yet these measures and many others around the world remain insufficient to cultivate a supportive ecosystem for women’s economic empowerment and specifically to promote women in the private sector. Women’s economic empowerment is best achieved through a holistic approach based on three levels of entrepreneurial communities. At the individual level this holistic approach involves fostering an entrepreneurial mindset, leadership development, and empowerment. At a community level it involves building relationships by linking community actors and creating collaborative spaces. In the broader business ecosystem, it involves improving the environment for women in business by promoting entrepreneur-friendly policies, lowering barriers, and garnering community and official support.
Women’s economic empowerment pays dividends because, as Boileau Loko and Mame Astou Diouf wrote in a Working Paper for the IMF, “in development economics, it is now fully acknowledged that educated women allocate a higher share of households’ resources to education and healthcare—two factors that are expected to boost productivity and growth in the long-run.” This means a growing investment in future generations. A 2016 report by UN Women highlighted this fact by explaining that “increasing the share of household income controlled by women tends to increase spending on children’s education and health.”
For example, in Ghana, the share of assets and the share of land owned by women are positively associated with higher food expenditures. In Brazil, women’s own nonlabor income has a positive impact on the height of their daughters. In China, increasing adult female income by 10 percent of the average household income increased the fraction of surviving girls by one percentage point and increased years of schooling for both boys and girls. In contrast, the World Bank finds that a comparable increase in male income had no statistically significant impact on survival rates and educational attainment for children.
Women sacrifice present consumption in order to enhance the future earning potential of children. This is yet another way that economically empowering women builds economic resilience in emerging markets.
One tool for empowering women is a Women’s Business Agenda (WBA)—adapted from U.S. Chamber of Commerce experiences and employed by the Center for International Private Enterprise (CIPE). The WBA has successfully been employed in such countries as Afghanistan, Bangladesh, Nigeria, and Pakistan. Other models showing big progress include networking programs and resource centers for women that provide business services, training, and mentorship opportunities.
These activities and outlets are likely to drive change. A 2018 study by the Group of Seven (G7) Ministers and Central Bank Governors documented that improvements in gender equality can lead to greater diversification of output, exports, and means of production.
Women in leadership positions can increase female labor force participation “by providing role models for other women, and by combating stereotypes. Once women are in charge, they can significantly change public attitudes toward women and, importantly, raise the aspirations parents have for their daughters and the aspirations teenage girls have for themselves,” as a 2009 article in the Quarterly Journal of Economics reported.
Women now represent more than 40 percent of the global labor force, more than 45 percent of the agricultural workforce, and more than 50 percent of the world’s university students. For an economy to function at its potential, women should be engaged in activities that best utilize their skills and talents. When this is the case (women’s abilities are more optimally utilized), these workers are more productive. Conversely, when women’s labor is underused or misallocated – due to discrimination that prevents them from completing school, entering certain occupations, dealing with the burden of care issues exacerbated by the COVID-19 pandemic, or otherwise earning the same incomes as men—productivity falls.
Clearly, expanding women’s access to inputs and means of business support drives down income inequality and reduces drag on economic growth. In addition to its impact on economic performance, greater inclusion of women directly contributes to greater economic diversification, which bolsters economic resilience. This is especially the case in emerging markets, which tend to have more concentrated economic structures.
The fate of any democracy is tied to the role of women in that society. Reducing gender inequality in economic opportunity, entrepreneurial activity and access to resources boosts economic growth, makes economic growth more widely shared, and enhances economic productivity. It’s the right way to build a better future for all people.
CIPE’s Connie Gonzalez and Nora Wheelehan also contributed to this article.
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More Resilient Markets and Democracies through Better Gender Inclusivity
Photo via Pixabay.
March 8, 2022
CIPE's Barbara Langley and John Morrell argue that the private sector has a major role to play as a partner to governments in empowering women entrepreneurs - and that women's economic empowerment has strong benefits for economies and democracies writ large.
W
omen make up at least 50% of all segments of society, including marginalized populations such as youth, religious or ethnic minorities, and the LGBTQI+ community. Empowering women economically makes markets more inclusive and resilient. It’s well-documented that women’s economic realities and experiences are often very different from men’s. This is, in part, due to gaps in women’s legal rights. In its 2021 Women, Business and Law report, the World Bank identified eight key areas where women are impacted by law: mobility, workplace, pay, marriage, parenthood, entrepreneurship, assets, and pension.
We must advocate for women’s rights and commercial interests to ensure their economic empowerment. Advocacy—whether aimed at public policy or public opinion—helps marginalized segments of the population make their voices heard, making possible more just laws, institutions, and social norms.
The World Bank report touted the potential of Women’s Economic Empowerment (WEE) programs. These programs work to ensure equality of access for women and men when it comes to petitioning governments and thereby shaping institutions and policies. The World Bank explained such programs are “…likely to lead over time to more representative, and more inclusive, institutions and policy choices.” This suggests that any programs that help ensure equal access to opportunities and resources for excluded or marginalized population segments will help to make for more inclusive democracies.
The United States Congress has prioritized women in foreign assistance through legislation such as the 2019 Women’s Entrepreneurship and Economic Empowerment Act (WEEE Act). The WEEE Act requires 50% of USAID resources supporting micro, small, and medium enterprises to target businesses owned, managed, or otherwise controlled by women. It also requires program and performance monitoring efforts to include goals with a gender disaggregated basis. Both the Trump and Biden Administrations have since championed women’s empowerment in their presidential budgets through their Women’s Global Development and Prosperity (W-GDP) and Gender Equity and Equality Action (GEEA) funds at USAID.
Yet these measures and many others around the world remain insufficient to cultivate a supportive ecosystem for women’s economic empowerment and specifically to promote women in the private sector. Women’s economic empowerment is best achieved through a holistic approach based on three levels of entrepreneurial communities. At the individual level this holistic approach involves fostering an entrepreneurial mindset, leadership development, and empowerment. At a community level it involves building relationships by linking community actors and creating collaborative spaces. In the broader business ecosystem, it involves improving the environment for women in business by promoting entrepreneur-friendly policies, lowering barriers, and garnering community and official support.
Women’s economic empowerment pays dividends because, as Boileau Loko and Mame Astou Diouf wrote in a Working Paper for the IMF, “in development economics, it is now fully acknowledged that educated women allocate a higher share of households’ resources to education and healthcare—two factors that are expected to boost productivity and growth in the long-run.” This means a growing investment in future generations. A 2016 report by UN Women highlighted this fact by explaining that “increasing the share of household income controlled by women tends to increase spending on children’s education and health.”
For example, in Ghana, the share of assets and the share of land owned by women are positively associated with higher food expenditures. In Brazil, women’s own nonlabor income has a positive impact on the height of their daughters. In China, increasing adult female income by 10 percent of the average household income increased the fraction of surviving girls by one percentage point and increased years of schooling for both boys and girls. In contrast, the World Bank finds that a comparable increase in male income had no statistically significant impact on survival rates and educational attainment for children.
Women sacrifice present consumption in order to enhance the future earning potential of children. This is yet another way that economically empowering women builds economic resilience in emerging markets.
One tool for empowering women is a Women’s Business Agenda (WBA)—adapted from U.S. Chamber of Commerce experiences and employed by the Center for International Private Enterprise (CIPE). The WBA has successfully been employed in such countries as Afghanistan, Bangladesh, Nigeria, and Pakistan. Other models showing big progress include networking programs and resource centers for women that provide business services, training, and mentorship opportunities.
These activities and outlets are likely to drive change. A 2018 study by the Group of Seven (G7) Ministers and Central Bank Governors documented that improvements in gender equality can lead to greater diversification of output, exports, and means of production.
Women in leadership positions can increase female labor force participation “by providing role models for other women, and by combating stereotypes. Once women are in charge, they can significantly change public attitudes toward women and, importantly, raise the aspirations parents have for their daughters and the aspirations teenage girls have for themselves,” as a 2009 article in the Quarterly Journal of Economics reported.
Women now represent more than 40 percent of the global labor force, more than 45 percent of the agricultural workforce, and more than 50 percent of the world’s university students. For an economy to function at its potential, women should be engaged in activities that best utilize their skills and talents. When this is the case (women’s abilities are more optimally utilized), these workers are more productive. Conversely, when women’s labor is underused or misallocated – due to discrimination that prevents them from completing school, entering certain occupations, dealing with the burden of care issues exacerbated by the COVID-19 pandemic, or otherwise earning the same incomes as men—productivity falls.
Clearly, expanding women’s access to inputs and means of business support drives down income inequality and reduces drag on economic growth. In addition to its impact on economic performance, greater inclusion of women directly contributes to greater economic diversification, which bolsters economic resilience. This is especially the case in emerging markets, which tend to have more concentrated economic structures.
The fate of any democracy is tied to the role of women in that society. Reducing gender inequality in economic opportunity, entrepreneurial activity and access to resources boosts economic growth, makes economic growth more widely shared, and enhances economic productivity. It’s the right way to build a better future for all people.
CIPE’s Connie Gonzalez and Nora Wheelehan also contributed to this article.
