Gender inequality is a pressing problem in the global economy. Women do not participate at equal rates in the labor force, and they typically make less money than men. In countries belonging to the Organisation for Economic Co-operation and Development (OECD), for instance, women earn 16% less than men on average, according to the International Monetary Fund (IMF). Legal restrictions, societal expectations that women will stay home and raise children, and tax codes that favor a sole male breadwinner are among the numerous factors that contribute to unequal opportunities for women.
Not only is lagging progress toward women’s economic empowerment harmful to women who would prefer to participate fully in the workforce, but pressures that prevent women from seeking formal employment can also hold back a country’s economic growth. In 2013, the IMF found that if women participated in Japan’s labor force at the same rate as men, Japan’s GDP would increase by 9%. In Egypt, that number jumps to a whopping 34%. Across countries, gender inequality goes hand in hand with income inequality. So it’s no surprise that research by the United Nations finds that worldwide, gender equity is associated with higher income per capita and faster economic growth.
Initiatives to Promote Gender Equality
Recognizing the high cost of gender inequality both in individuals’ lives and in national economies, international organizations have begun working to address the problem. The IMF has made gender equity the focus of recent conferences, including its conference on gender and macroeconomics and its conference on fiscal policy and gender equality. These events publicize the results of the organization’s research on the subject, such as its project on gender budgeting conducted in partnership with the United Kingdom’s Department for International Development. This work evaluates the use of national fiscal policy to actively promote women’s economic development, surveying countries’ policies and their effects on women’s participation in the labor force.
But the IMF’s work extends beyond academia. On social media, the organization has created the #IMFGender campaign to publicize stories of women who are striving for empowerment through entrepreneurship, economic development, and other initiatives.
In 2016, the United Nations established its High-Level Panel on Women’s Economic Empowerment, which studies ways to achieve gender equity and makes recommendations for the international development community. The High-Level Panel has identified paths toward gender equity, which include changing cultural norms to be more favorable to working women, legal reforms, and shifting the burden of unpaid childcare so women don’t have to shoulder it alone. The recommendations also include providing greater public representation for women, changing public sector hiring practices, and giving women access to financial capital.
Gender equality is one of the UN’s Sustainable Development Goals (SDGs), the 17 objectives accepted in 2015 under the 2030 Agenda for Sustainable Development. As part of these goals, the UN encourages countries to end discrimination against women, open up leadership positions to women, and give women equal access to property, resources, and financial services.
How Investors Can Help
Help from private-sector investors is needed if international organizations are to achieve their goals for gender equality. Having stated that current financing falls short of the amount needed, UN Secretary-General António Guterres announced a finance summit to be held in 2018 to tackle the issue of raising capital to fund the SDGs, including gender equality. The UN estimates that financing its goals by 2030 will require annual investments of $6 trillion, and that investments by private investors and institutional investors are needed to fully fund initiatives that will erase economic barriers for women.