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The e-Newsletter of the Gender Network August 2014 | Vol. 8, No.


Macroeconomic Policies to Promote Gender Equity for Economic Empowerment
By Shikha Jha

Gender discriminatory treatment prevents women from fully contributing to growth and
economic development. According to the United Nations, the Asia-Pacific economy would earn
an additional $89 billion annually if women were able to achieve their full economic potential.
In countries such as India, Indonesia, and Malaysia, the GDP would increase by 2%4% annually
if women's labor force participation rate was increased from the current 30% to 70%.
the mid-1990s and 2000s, increased employment of women in developed economies
contributed much more to global growth than the Peoples Republic of China did.
In the
emerging East Asian economies, for every 100 men in the labor force, there are now 83 women,
higher even than in OECD countries. Greater labor market participation by women can
compensate for the negative growth effects of ageing, and a shrinking population due to
demographic transition.

Women in Asias economy
The Gender Inequality Indexa measure reflecting gender inequality in reproductive health,
empowerment and the labor marketindicates that potential human development lost due to
gender inequality is higher in poorer countries.
The Gender Gap Index
a measure of gaps in
economic participation, education, health and political empowermentplaces Kazakhstan,
Mongolia, the Philippines, Singapore, and Sri Lanka at the top in Asia and the Pacific, with the
narrowest gaps at 7078 women for every 100 men. For Nepal and Pakistan the number drops
below 60.

Educating girls boosts prosperity. In Southeast Asia, higher education is associated with lower
jobless rates for young adult women aged 2534. In Thailand, having a bachelors degree
increases job prospects 5 times more, compared to having no education. Better educated
women are more productive at work and raise healthier, better educated children at home.
However, even when girls get equal educational opportunities, the gain may be negated in the
job market. In the Kyrgyz Republic and the Philippines, where girls and boys both attend school
for about 8 years, the labor force participation rate is just 50% for women compared to 80% for
men. Finding a job after completing school takes 25 years in India, Indonesia, the Philippines
and Thailand. Joblessness in the region affects young women more than young men as many

Principal Economist, ADB
United Nations Development Programme. 2010, Power, Voice and Rights: A Turning Point for Gender Equality in
Asia and the Pacific, Asia-Pacific Human Development Report. New York.
Finance and Economics. 2006. Women and the world economy: A guide to womenomics, The Economist. 12
United Nations Development Programme. 2014. Human Development Report. New York.
World Economic Forum. 2013. The Global Gender Gap Report. Geneva.
are discouraged and stop searching for jobs. Urbanization and migration to urban centers
create greater risk of economic vulnerability for women with low education and limited skills.
When firms lay off workers, women are often the first to be fired.

Housework (e.g., child-rearing, cooking and cleaning) is not accounted for in official statistics
because it is unpaid. In paid work, women usually end up in informal and part-time
employment, with poor working conditions and low pay. The shift in Asias economic structure
from manufacturing to services is creating more women-friendly job opportunities. Women
accounted for 6080% of jobs in Asias successful export industries, such as in textiles and
At the same time, they lose out in export-oriented manufacturing, which requires
hard skills in mechanization and automationoften a mans stronghold. Gender gaps in wages
prevail widely even for the same occupations and education, although such gaps have been
narrowing to some extent.

Female representation in senior entrepreneurship and political positions remains limited. When
women do assume higher positions in public office, they are more likely to occupy soft
ministries with a socio-cultural focus than those with hard technical, economic and key
strategic functions. Most female-owned businesses register lower profits and labor productivity
due to the small size of businesses; lack access to credit, limited assets, and financial exclusion.

Macroeconomic policies as a tool for harnessing womens economic potential
Sound macroeconomic policy should focus not only on growth but on the broader goals of well-
being, particularly employment and equality.

Fiscal policy
Gender-responsive budgeting with appropriate expenditure allocations can address womens
health, social and education inequalities. Making it effective would require better funding of
national ministries and local offices for gender mainstreaming, along with better policy dialogue
and interagency interaction. Developing Member Countries (DMCs) following gender-
responsive budgeting include Malaysia, Pakistan, the Philippines and Sri Lanka. Other fiscal
measures that can reduce womens domestic work burden and increase their participation in
paid employment include lower income tax, tax rebates and other tax benefits; subsidized child
care and pension system reforms. For example, income tax rebates for women have been used
in India. In Bangladesh, child care for women garment workers is funded by non-governmental
organizations (NGOs), government, and donors.

Monetary policy
Cheap credit and subsidized interest rates for business start-ups can facilitate greater access to
credit and financial services for women since they work disproportionately in the informal
economy and as owners of micro and small enterprises. Additionally, education policy should
prepare women for emerging needs, for high-tech manufacturing skills to reduce the waiting
time for jobs and to improve returns to education.

Finance and Economics. 2006. Women and the world economy: A guide to womenomics, The Economist. 12

Gender-responsive macroeconomic policy can thus help tap womens economic potential
through equality in education, incentives for outside work, support for working mothers, and
financial inclusion. Realizing womens potential however, depends not just on sound
macroeconomic management but also changes in the policy environment, including the quality
of institutions, labor regulations and education policy.

See associated presentation.

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian
Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy
of the data included in this paper and accepts no responsibility for any consequence of their use. The countries listed in this
paper do not imply any view on ADB's part as to sovereignty or independent status or necessarily conform to ADB's