Fostering Women’s Economic Empowerment: New Approaches to an Old Problem
By Ana Revenga

Although the lives of women in developing countries have improved dramatically in the last 50 years, gender equality in access to economic opportunities remains an elusive goal. While women work for pay more than ever before, gender gaps in economic activity, earnings and productivity persist across all countries and at all levels of income. As wage workers, women remain concentrated in low paying occupations and sectors. As entrepreneurs, women lead smaller firms in less profitable sectors. As farmers, they work smaller plots, have less access to inputs and lower yields. And in some regions of the world, especially in South Asia and the Middle East/North Africa, women’s dramatically rising levels of education has not translated into higher female labor force participation or female employment.

Fostering women’s access to economic opportunities can contribute to the development process in multiple dimensions. When women are empowered economically, they have a greater voice in their families and in society; families are less vulnerable to poverty; and economies are more productive. Removing the barriers that prevent women from having the same access as men to economic opportunities can generate higher productivity and higher incomes for all people. Recent estimates suggest that closing the gender gap in entrepreneurship and employment would raise productivity and incomes by 12 percent in Africa, 17 percent in Latin America, as much as 24 percent in South Asia and 38 percent in the Middle East/North Africa. Thus, unlocking women’s economic potential is crucial in promoting economic growth and reducing poverty around the world.  

Three key factors explain the persistence of a gender gap in economic activity: different use of time, different human capital, and discrimination. First, women and men spend their time differently, with women devoting more time to care and household related work than men. This, in turn, means that women have less time for paid work. What drives these differences in time use are deep-rooted social norms about the role of women (and men) in care and housework. Second, although the gap in education levels between the sexes has shrunk or even reversed in some countries, important differences remain in education trajectories and in the types of skills men and women acquire through their education. Such educational segregation has implications for the labor market and women’s ability to compete on a level playing field. Third, markets and institutions often work in ways that treat women and men differently.  Labor markets do not always work well for women, especially if their presence is limited in certain sectors or occupations. Where few women are employed, employers may hold biased beliefs about their qualifications, or may be reluctant to hire women based on potential ‘costs’ that they see coming along with female employees such as maternity leave, potential absence from work to care for children, or a perceived idea of low productivity. Discrimination in labor, credit markets and differential access to productive inputs are additional contributors to an unequal playing field.

These three sets of differences not only get in the way of women having the same economic opportunities as men, but often do so in ways that reinforce each other. For example, having to devote more time to care and housework may encourage women to self-select into informal sector occupations that embody greater flexibility in hours but trap them into lower pay. Similarly, lack of employment opportunities in male-dominated sectors may encourage women to study only “female’ subjects which ill prepare them for a changing labor market where technology is king. Or it may discourage young women from investing further in their education altogether, and push them instead towards early childbearing and marriage, which only further reduces their future employment prospects and economic independence.   

The fact that there are multiple, mutually reinforcing drivers of the gender gap means that empowering women economically requires multifaceted programs that address the multiple underlying constraints. And given that the nature, structure, and functioning of markets, institutions and norms varies widely across countries, a ‘one size fits all’ type of policy approach is unlikely to work. Depending on the context, the same policy can have very different results, and policies that were successful in one case, may fail in another. In other words, policies also need to fit the specific economic, cultural and social environment they will operate in. 

To know what works and what does not, and in what settings, we need constant experimentation and evaluation. One promising recent multifaceted approach sought to promote women’s empowerment in Uganda by simultaneously providing adolescent girls (aged 14-20) with two types of skills: technical skills to enable them to start small-scale income generation activities, and life skills to help them make better decisions about sex, reproduction and marriage. The goal was to break the mutually reinforcing trap of low levels of education, restricted access to labor markets and limited control over their bodies that leads many adolescent girls to cease investing in their own human capital and instead opt for early pregnancy and childbearing. The program, adapted from BRAC’s program in Bangladesh, was delivered via “adolescent development clubs” in 150 communities and designed as a randomly controlled trial. Prior to the intervention, levels of empowerment among adolescent girls in those communities were very low. After four years of program activity, young women beneficiaries had taken more control over their lives: engagement in income-generating activities increased; teen pregnancies fell; the share of girls reporting sex against their will also dropped; and desired ages for marriage and childbearing rose. Once proven effective, the program was taken to scale and now reaches some 1200 communities in Uganda. It is also being implemented, with some modifications, in other countries in Africa including Liberia and Sierra Leone.

Another innovative program for women’s economic empowerment targeted small female entrepreneurs in Tanzania and provided them with a combination of mobile savings accounts and 12 weeks of business training. The goal was to simultaneously address two constraints that these women faced: lack of access to finance and savings instruments, and lack of formal entrepreneurship skills.  On the access to savings front, the program invited female entrepreneurs to attend a training session on M-Pawa, a mobile banking product, and then helped them open an account, set up personal savings goals and sign up to receive weekly SMS savings reminders. For the business training angle, the women received a 12-week group business practices training plus training on personal effectiveness and perseverance. Each component of the program ws evaluated on its impact alone and jointly. The mobile savings intervention allowed women to save more, and increased their borrowing on behalf of their firms. The business training component enhanced this impact. Women receiving the mobile savings intervention also opened new business, and reported having more decision-making power in their households. The business training on its own led to better business practices, increased the hours women devoted to their business and led to increases in capital investment. While the program did not seem to dramatically increase business profits per se, it did improve the overall well-being of beneficiary entrepreneurs. A similar program in Indonesia offered quite comparable results.

So, what can we learn from these innovations? First, that experimentation and innovation, when accompanied by a proper evaluation, can help design effective policies to support women’s empowerment. Second, that focusing on one barrier alone is unlikely to work. Instead, programs need to tackle the multiple barriers that prevent women from fully realizing their economic potential. Third, that programs are both scalable and translatable to other settings, but that this needs to be done with care and adaptation to cultural and social context.

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