WASHINGTON, D.C. — The 21st century poses many challenges that require new ways of thinking, none more important than the economic role of women in a rapidly changing world. The global economy is struggling to generate the growth that can provide a better life for all, yet women remain blocked from contributing their true potential.
This has a huge cost: in some countries per capita incomes lag significantly because women are denied equal opportunity. They represent half the world’s population but contribute far less than 50 percent of economy activity. Indeed, the gap between men and women in measured economic activity ranges from 12 percent in the Organization for Economic Cooperation and Development countries to 50 percent in the Middle East and North Africa.
What is needed to change this picture is a concerted effort to open the door to opportunity with what I call the “3 Ls” of women’s empowerment: learning, labor and leadership.
First, learning: education is the foundation upon which change is built. Learning helps women to help themselves and break the shackles of exclusion. Nowhere is this more essential than in the developing world. One study of 60 countries estimates that the economic loss from not educating girls at the same level as boys totals $90 billion a year. Another study suggests that an extra year of primary school boosts earning potential by 10 to 20 percent, and 25 percent for an extra year of secondary education.
There is an African adage that goes: “If you educate a boy, you train a man. If you educate a girl, you train a village.” This is not only true, it is measurable. For example, women are more likely to spend their resources on health and education, investing up to 90 percent of their earnings this way compared with just 30 to 40 percent for men. This spending creates a powerful ripple effect throughout society and across generations.
If learning is the first step, work is the second: labor enables women to flourish and achieve their true potential. But at present, when women participate in the workforce, they too often tend to get stuck in low-paying, low-status and low-security jobs — many of them in the informal sector of developing countries’ economies. Is it surprising, then, that women and girls are the main victims of extreme poverty, representing 70 percent of the billion people struggling to survive on less than a dollar a day?
Globally, women earn only three-quarters as much as men — even with the same level of education and in the same occupation. Surely one of our most basic norms should be “equal pay for equal work”!
Recent research by the International Monetary Fund shows that eliminating gender gaps in economic participation can bring increases in per capita income. This can have a major impact: women control the purse strings in most households around the world, and more spending by women feeds into higher levels of demand and economic growth.
How can we promote more opportunities for women in the workplace? Sometimes, it is about changing laws; for example, ensuring that property and inheritance laws do not discriminate against women. It also means policies that encourage education and health care and that provide greater access to credit so that women can achieve greater economic independence. This is an area where the International Monetary Fund is working hard to make a difference through our analytical and capacity-building efforts in member countries.
The playing field must be leveled in richer countries as well. They need more pro-women, pro-family-leave schemes, quality, affordable child care, individual (instead of family) taxation and tax credits or benefits for low-wage workers.
The third “L” is leadership: enabling women to rise and fulfill their innate abilities and talents. Here, there is plenty of room for improvement. For instance, women make up only 4 percent of chief executives on the Standard and Poor’s list of 500 companies; and only a fifth of parliamentary seats worldwide.
The irony is that when women lead they tend to do as good a job if not better than men do. One study shows that Fortune 500 companies with track records of raising women to senior positions are far more profitable than the average firms in their fields. Women are also less likely to engage in the reckless risk-taking behavior that sparked the global financial crisis in 2008. They are more inclined to make decisions based on consensus-building, inclusion, compassion and with a focus on long-term sustainability.
It is true — and it is understandable, given the bias that exists — that women sometimes lack confidence to match their competence. But they need to change that mind-set and reset the narrative in their favor. So it is essential that women be ready to “dare the difference” — to take risks and step outside their comfort zones.
Nonetheless, even those with the drive to succeed continue to face barriers. Therefore, I have come to the view that gender targets and quotas must play a role in ensuring women a place at the table. We must either force change or stay mired in complacency.
Whether we are talking about providing primary education for girls in a village or executive positions for women in business, it is time to create a world where all women can meet their potential without impediment or prejudice, and the world will reap the benefits. The three Ls will help us get there.
This essay is part of UN Women’s Empowering Women-Empowering Humanity: Picture It! campaign
© Women’s Feature Service
Christine Lagarde is the first female managing director of the International Monetary Fund, a post she assumed in 2011.
Previously, after an international law career she became French minister for foreign trade in 2005 and then minister for agriculture and fisheries. In 2007, she became the first female minister of finance and economy. As a member of the Group of 20 nations, Lagarde was involved in its management of the global financial crisis, helping to foster international policies related to financial supervision and regulation and to strengthen global economic governance.
Born in Paris in 1956, Lagarde graduated from law school at University Paris X and obtained a master’s degree from the Political Science Institute in Aix-en-Provence. A former member of the French national team for synchronized swimming, Lagarde is the mother of two sons.