Greater role for women in world economy

Raising women's labor-market participation rate boosts economic performance in a number of ways. For example, higher incomes for women lead to higher household spending on educating girls - a key prerequisite for faster long-term growth. Employment of women on an equal basis with men provides companies with a larger talent pool, potentially increasing creativity, innovation, and productivity. And, in advanced countries, a larger female labor force can help to counteract the impact of a shrinking workforce and mitigate the costs of an aging population.

So what underlies the persistence of gaping inequality and stalled progress? Legal, regulatory, and social discrimination against women in many countries still prevents them from seeking paid work in the formal sector. As a result, women dominate the informal economy, where jobs are often transient and earnings are low. In addition, tax systems and social-welfare programs in many countries are designed in ways that discourage women from working.

Against this background, government tax and spending policies, as well as labor-market regulation, should be reformed to help boost female employment. For example, taxing individual rather than family income would encourage women to seek employment. Linking social-welfare benefits to participation in the workforce, training, or active labor-market programs can also help, as can affordable, high-quality childcare and greater opportunities for paternity and maternity leave. In Brazil, for example, the share of women in the workforce has risen sharply over the past 20 years, from about 45 percent to almost 60 percent, owing in part to family-friendly policies.

These are just a few examples; far more can be done. Women benefit when flexible work arrangements are introduced and the barriers between part-time and full-time work contracts are lowered, as the Netherlands has successfully done. In developing countries, accessible water and better transportation systems in rural areas can help women manage their time better. Establishing and upholding equal property and inheritance rights can increase women's access to credit and other productive resources, and creating greater awareness of legal rights in general will help reduce discrimination.

Some of these steps have been taken in recent years, but it is time to jumpstart the process. We urge policymakers to take action and implement policies aimed at removing the obstacles that block women's participation in the workforce. The IMF will do its part by enhancing our analysis of the economic effects of gender inequality and working with our member countries to enable women to contribute fully to global economic growth and prosperity.

Especially now, with the growth outlook uncertain in much of the world, policies that encourage more women to enter the workforce certainly can help. Women are ready, willing, and able. Take my word for it.

Christine Lagarde is managing director of the International Monetary Fund. Project Syndicate

(China Daily 09/26/2013 page8)