Women in workforce benefit population at different levels

Written by Janani Sampath

Women’s participation in the workforce has an array of benefits for the women individually—like economic empowerment and participation in financial decisions. 

However, the effects can be far-reaching and impactful for a wider group of people. On Population Day, marked on July 11 across the world, we look at overarching implications of a rise in the percentage of women in the workforce.

Increases overall pay

In the US, a study of data over 30 years between 1980 and 2010, found out that there was an overall increase in wages when women began to participate in the workforce. The paper published in the Journal of Regional Science found out for every 10 percent increase in women’s participation, there was a five percent increase in the median real wages. The study established a relationship between a metropolitan area’s female labor force participation rate (FLFPR) in 1980 and its median real wage growth from 1980 to 2010. The area with a higher FLFPR saw a higher wage growth than the rest. In 1980, Minneapolis had close to 60 percent FLFPR while Columbus had about 53 percent.  In comparison, Minneapolis saw a wage rise of $0.54 per hour more than Columbus in the period.

The report noted that a good 60 percent of the cities covered experienced higher wage growth, despite the national trends due to the FLFPR. Taking the same example of Minneapolis, where a full-time person clocks in 40 hours per week at work, the $0.54 rise adds to being better off by over $1,100 per year. When you look at a 45-year career, there is a gain of over $50,000.

While the study observes that the exact reasons for the rise are unclear, it makes a strong case for roping in more women in the workforce.

Geriatric population not a burden

Aiming to close the gender gap in the workforce to 9. 1 percent by 2025, Australia has prioritized the increase in women’s participation for its economic growth. There has been a link between higher women’s workforce participation and improving Australia’s productivity and prosperity. The country foresees a huge benefit with a reduction in fiscal pressure, owing to the support of an aging population, as shown by intergenerational reports.

 A report by Moody’s in 2018 explains the reason behind it. The report adds that increasing women’s participation in the labor force will steer economic growth, by partially filling up the space left in the workforce by an aging group of people. It also explains that with more workers, there are more people paying taxes, and providing revenue to the governments. The governments will not have to deal with rising pension costs to the retired population. As a result, they do not have to cut costs to meet the spending or boost taxes— both affect the economies globally.

Women’s participation protects girls

A paper published by the IZA World of Labor, a repository for information about labor issues and topics worldwide, observes that the benefit of women working results in the welfare of girls (in the form of improved health, reduced domestic violence for women).

The paper titled  ‘Women’s Labor Participation’ highlights a positive relationship between women’s economic activity and girls’ survival. It observes the effect of economic reforms in rural China in the 1980s. With a boom in tea production, women were in demand in the tea gardens due to their nimble fingers and shorter height. As the women entered the workforce, survival rates of girls increased in tea-growing regions (where women’s labor was more economically valuable) when compared to the regions where men had a comparative advantage in production. When there is more money in the household with both parents working, the expenditure of the marginalized group like girls is taken care of, explains the paper.

India, where the female workforce participation is still far from the desired levels at 21 percent, is one of the fastest-growing economies in the world.

Case studies from across the world point towards the urgent need to build on efforts to bring more women on board across sectors. As per the ILO research, the skill deficit in India is growing, likely to get to 29 million skill-deficit by 2030. 53% of businesses in India find it difficult to identify people with the right set of skills. In the absence of indigenous, industry led skill development programs for talent, this can prove to be a significant deterrent to economic revival. As per data from the CMIE, the impact of COVID induced job losses have been disproportionately heavier on women. This accentuates the need for specially curated skilling programs for women to gain equitable access to job opportunities. Avtar Group, pioneers in second careers for women in the country advocates a multi-pronged skilling strategy for successful career pivots. Re-skilling, Up-skilling and counselling to encompass both the technical and strategic skills among women professionals for readiness to face the changing dynamics of the corporate landscape. With India setting an ambitious target of a 5 trillion economy in the coming years, it is only imperative that all parties concerned– government, industries, educational institutions, etc— work towards upping the women workforce across sectors to reap the social and economic benefits.

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