Economy Global Womens Rights

Fiscal Policies Can Increase Female Workforce Participation

Equitable workforce opportunities for women are beneficial to everyone, but research from the International Monetary Fund (IMF) shows that female workforce participation still lags greatly behind that of men.

Due to the stubborn persistence of gender gaps in wages and educational opportunities, the average female workforce participation rate is 20 percentage points behind the male rate. A study by the IMF reveals that fiscal policies that address gender equality create more opportunities for women and help to decrease poverty and inequality. Some of these policy choices include investing in education or infrastructure, developing better sanitation facilities, implementing individual-based tax regimes, and offering parental leave.

At least 80 countries since the mid-1980s have incorporated fiscal policies that promote gender equality. These countries are across all levels of development; additionally, however, the IMF has also found when advanced economies are actively promoting policies in order to increase female work force participation, more women do actually enter the labor force.

Policies specifically created to increase the number of women in the workforce end up accomplishing a variety of economic and social goals. Efforts to reduce the gap in literacy rates, for example, help increase women’s productivity which in turn increases sustainable growth. Greater access to safe water also gives women more time to pursue paid work opportunities, and changing the personal income tax structure from a family to an individual system can foster the incentive for more women to work. More diversity in workplaces will create more innovative ideas.

Gender-blind policies can exacerbate the barriers women face in gaining employment. USAID states that “If the same number of women as men participated in the global economy, global GDP would grow by $12 trillion by 2025.” According to existing research, investing in half the population will only bring about positive changes, both economically and socially.

Sources: IMF, 2/18/20; UN Women; USAID, 3/13/19.

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