Tackling Barriers to Women’s Economic Participation

In 2016, the connection between women’s economic participation and prosperity is undeniable.  Decades of research from the International Monetary Fund, Organisation for Economic Cooperation and Development, the World Economic Forum, and other leading organizations confirms that women’s participation in the labor force is critical to economic growth. Yet, despite this evidence, a range of legal barriers inhibiting women’s full and equal economic participation remains on the books in countries around the world.

The World Bank’s 2016 report on Women, Business and the Law offers a stark picture of the ways in which laws and policies continue to undermine women’s economic productivity. Of the 173 economies surveyed, 90 percent have at least one regulation on the books that impedes women’s economic opportunities. Gender-based job restrictions remain common: about 100 countries impose limitations on the jobs that women can hold. In thirty economies, women face a constellation of barriers, with ten or more laws inhibiting women’s economic participation on the books, and in eighteen countries, husbands or male guardians can legally prevent women from working altogether. These obstacles have a multidimensional effect of women’s opportunities: lower levels of gender equality in national laws are associated with fewer girls attending secondary school, fewer women in the formal workforce or running businesses, and a wider gender wage gap.

These legal barriers matter, of course, because they undermine women’s rights and self-sufficiency. But given that these restrictions stifle broader economic growth, it is not only human rights advocates who should care about these limitations—finance ministers should also take note. Indeed, the private sector has increasingly recognized the growth potential afforded by women’s economic participation: just last month, McKinsey Global Institute released a study assessing the potential gain of women’s equal workforce participation at $28 trillion globally, or 26 percent of annual global gross domestic product (GDP), if the gap between women and men were to close by 2025. Notably, the study highlighted that advanced and developing countries alike stand to gain, but these gains would materialize only in a “full potential” scenario in which women had identical access to labor markets as their male counterparts.

In recent years, government leaders have begun to eliminate barriers to women’s economic participation. According to the Bank, over the past two years alone, sixty-five economies—the vast majority in the developing world—enacted legal reforms to boost the economic contributions of women. But as the Bank report outlines, much more work remains to level the economic playing field between women and men. As 2016 dawns, no region in the world can claim to have achieved gender equality in economic opportunity. This hampers profits and productivity in every corner of the world.

Importantly, international momentum in favor of reforms to promote women’s economic participation is growing. The new Sustainable Development Goals (SDGs) recently adopted at the United Nations include concrete targets to improve women’s economic activity, calling for equality in property ownership, inheritance, financial services, and natural resources. The SDGs also address a range of factors—from ending violence against women, to recognizing unpaid care and domestic work, to promoting equal participation in leadership and decision-making—that are critical for women to realize their economic potential. As nations move from adoption to implementation of these new targets, development practitioners should enlist the support of economic leaders and policymakers to enact the reforms needed to unleash the full economic contributions of women and strengthen economies across the globe.

Listen to the audio of the CFR roundtable event Legal Barriers to Economic Participation>>