Unlocking the Untapped Potential: The Impact of Women’s Economic Empowerment on Socio-Economic Welfare

athena sharma nina-iraq

Athena Sharma

by Athena Sharma

I am a passionate feminist and advocate for gender equality and these ideals have been ingrained in me from an early age. Growing up with a single mother in India, which is still a highly patriarchal society, demonstrated the unwillingness of society to allow women to participate in socio-economic activities outside the traditional sphere of the ‘home’. This was over a decade ago in the 1990s and although the value women can add economically has been widely recognized over the years, the absence of women in economic activities beyond the home still leaves a gaping hole to be filled in a number of developing nations. According to World Bank and ILO estimates, the female labour force participation in Iraq has been steadily increasing since 2005. Despite this positive trend, the estimate still amounts to a mere 14.9% as of 2013.[1] Similar trends are visible in other Middle-Eastern countries such as Yemen, Saudi Arabia, Iran and Lebanon, with participation rates falling within the 15% to 25% range. In India, 2013 figures indicate a participation rate of 27%.[2] While cultural attitudes and social norms about women in the workplace are changing, they are not changing fast enough.

Failure to allow women full access to the labour market is an under-utilization of human resources that holds back productivity and economic growth. The direct impacts of having more women contribute towards the economy on an equal basis can be easily deduced-a stronger labour force has a positive impact on GDP and economic growth and also provides a wider tax base whose contributions can lead to better welfare provisions by governments. Research produced by the World Bank, UNDP and UNIFEM indicates that gender inequalities in developing societies inhibit economic growth and development. Furthermore, a recent World Bank report confirms that gender pay discrimination costs societies by slowing economic growth, reducing living standards of individuals and weakening governance within that society.[3]

The argument for female labour force participation doesn’t stop there. Encouraging women’s economic empowerment helps more than one person. Studies have shown that women tend to spend a larger proportion of their income on the household as compared to men, thereby increasing welfare. This has a direct impact in terms of improving health outcomes of the entire household and enhancing educational outcomes, diet and clothing of any children within a household, particularly girls who tend to be otherwise neglected. A report on a microfinance lending study by the Women’s Entrepreneurship Development Trust Fund (WEDTF) in Zanzibar, Tanzania reveals that 55 percent of women’s increased income is used to purchase household items, 18 percent goes for school, and 15 percent is spent on clothing.[4] Another study that focuses on Latin America reports that while men on average contribute 50%-68% of their income to the household and keep the rest for personal consumption, women tend to keep nothing back for themselves, with the result that more money is usually available in women-headed households for collective household expenditure.[5] As individual economic agents, men and women differ in how they choose to spend their incomes and may not always agree on some key decision points, such as which crop to plant, what to invest in or which child to send to school. Women’s ability to influence these decisions by increasing their bargaining power within a household can be directly attributed to their improved access to and control over resources. In order to hasten the process of poverty eradication and enhance household level health and educational outcomes, it will be critical to give women the bargaining power that they need to drive these changes.

Economic and gender equality are intrinsically linked and a high degree of inequality in either of these two spheres can prove to be extremely destabilizing for any society. But just like disempowered segments of society can have a negative domino effect across a number of socio-economic indicators, advocating for women’s economic empowerment can generate substantial positive multiplier effects across these same measures. Someone at some point chose to give my single mother a job, incidentally in the field of gender rights. Her economic empowerment led to better health outcomes for me, we moved from our one room dwelling in an underprivileged neighbourhood to a place we could call home, she supported my step father to set up and succeed in his own business, she saw me through my undergraduate studies at the University of Warwick in the UK and finally, all these enablers helped me secure a full scholarship to complete my masters in Economics for Development at the University of Oxford. Now I work for a multinational firm and lead a comfortable life. Because my mother was economically empowered, I am economically empowered and my future children and household will feel the effects of that privilege. One empowered woman has directly impacted generations to come. Imagine the global potential that we have yet to unlock.

[1] http://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS/countries/IQ?display=graph

[2] http://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS

[3] World Bank, Engendering Development: Through Gender Equality in Rights, Resources, and Voice— Summary (Washington, D.C.: World Bank, 2001); www.worldbank.org/gender/prr/engendersummary.pdf.

[4] Women’s Entrepreneurship Development Trust Fund (WEDTF). Information on microfinance and empowerment of women. Zanzibar, Tanzania: WEDTF, 2001.

[5] Sylvia Chant, “Women-Headed Households: Poorest of the Poor? Perspectives from Mexico, Costa Rica and the Philippines,” IDS Bulletin 28, no. 3 (1997): 39

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