Building Inclusive Economies: A Conversation With Laura Tyson
Drawing upon decades of experience in the field of international economics, Laura Tyson shares her insight on the relationship between women’s economic participation and global economic growth. She discusses strategies for both the public and private sectors to eliminate barriers to women’s labor force participation, with a focus on emerging markets.
VOGELSTEIN: Good afternoon, everyone. Good afternoon. My name is Rachel Vogelstein. I’m the director of the Women in Foreign Policy program here at CFR, which analyses how elevating the status of women and girls advances U.S. foreign policy objectives. I want to begin by thanking Alfonsina Penaloza and Ruth Levine of the Hewlett Foundation for supporting our meeting this afternoon and the report we’re launching today. I also want to recognize the many members of CFR’s advisory committee on building inclusive economies, who are here with us, including, of course, our featured speaker, and express our appreciation for their guidance, which has greatly benefitted our work.
Today, on behalf of my partner and co-author Gayle Tzemach Lemmon, I am thrilled to announce the release of an advanced copy of our new CFR report, entitled, “Building Inclusive Economies: How Women’s Economic Advancement Promotes Sustainable Growth.” Our report demonstrates the connection between women’s economic inclusion and prosperity. Over the last two decades, a number of international organizations and world leaders have recognized that the economic empowerment of women is critical to growth and to stability.
Analyses from the United Nations, the International Monetary Fund, the World Bank and other leading institutions demonstrate the economic growth potential that follows from increasing women’s labor force participation. Multilateral bodies such as the G-20 and the APEC forum have ratified agreements to promote women in the economy as a means to stimulate growth. And we’ve seen governments from Cote d’Ivoire to Rwanda to Japan adopt reforms to increase women’s ability to contribute to their economies.
However, despite the growing recognition that women’s economic empowerment is critical to growth, economic leaders continue to make and to measure policy in ways that undercapitalize on women’s economic participation and undervalue women’s women. Serious proposals to address the barriers to women’s economic inclusion still remain access from mainstream economic policy discussions. The ways in which gender affects time use, human development, and access to finance and markets are too often ignored in policy dialogue.
Women’s work in the informal economy and inside the home is uncounted or undercounted. Legal and structural barriers continue to inhibit women’s participation in formal, higher-wage sectors and occupations. And we see that gender wage gaps persist everywhere in the world for which we have recorded data. As nations struggle to emerge from an economic slowdown that has roiled markets across the globe, new strategies to jumpstart growth are sorely needed. And we cannot any longer afford to overlook the economic potential of 50 percent of the world’s population.
Perhaps no one knows this better than our speaker today, the honorable Dr. Laura Tyson, the director of the Institute for Business and Social Impact at the Haas School of Business at Berkeley, and a professor of business administration and economics. Dr. Tyson recently coauthored the report of the first-ever U.N. high-level panel on women’s economic empowerment. Previously, she served as dean of the London Business School, and also as dean at Berkeley Haas. Dr. Tyson is an expert on trade and competitiveness. And she was the first woman to serve as chair of the President’s Council of Economic Advisors, and later as the director of the White House National Economic Council.
As world leaders prepare to gather in Germany next month for the G-20 summit, and as nations—including the U.S. government—contemplate support for a new funding mechanism to advance women’s economic participation, our conversation today couldn’t be more timely or important. We are truly fortunate to have with us today a pioneer in economic scholarship to guide our discussion. So before I turn it over to Gayle to moderate today, please join us in a round of applause for our speaker. (Applause.)
LEMMON: I want to thank all of you for coming today, and to thank Dr. Tyson, because for those of us who have long followed economics and economic policy, she was always somebody whose name I looked for in headlines to see what was happening. And I’m really delighted, because I think the whole point of this report—and those of you who have come to our events know I tend to err on the side of plainspoken because I think that in the policy community we need more of that right now.
And that is why I am so delighted that Dr. Tyson could join us today, because we’re talking about a conversation that we really hope, with this paper and with all of the work that Dr. Tyson did with the high-level panel and with the work that each of you do, to move this conversation from the margin to the mainstream, because this does remain an economic policy alley versus one of the main conversations about global inclusion, global growth, global stability, and global prosperity. And so that is really, you know, we were talking with Dr. Tyson earlier, that it’s rare to have somebody who sat at so many different points on the circle looking at various parts of this.
So I’d like to start with a question about inclusive growth and the work that you’ve done part of our advisory council on this paper. And just from the highest level, how do you see the role of women and girls now colliding between the economic conversation about inclusive growth and the policy conversation about women and girls?
TYSON: OK. So let me just start with an observation, because I actually did do this as part of my preparation for writing the U.N. report. And I want to say that I had a terrific co-author, who actually is not with us here today, but she was very instrumental in getting gender mainstreamed into World Bank decisions. So mainstreaming gender into an international institution’s decisions, which are economic decisions, that has happened in the Bank and it’s happened in the International Monetary Fund. And that’s terrific news. And I just want to start with that.
I then want to say that as—so, when I agreed to do this I said, but I’m not really a gender expert. I have worked with the World Economic Forum putting together an annual really summary of the data on a number of different—gender differences across countries. I got interested in that because of my work on competitiveness. Inclusive growth wasn’t a term at the time. You know, inclusive growth is also a relatively new term. Competitiveness was here was the World Economic Forum, whose distinctive brand was tied up with measuring national competitiveness of countries and of companies. And gender never showed up. It just wasn’t there. So you could talk about talent but not talent diversity, or leadership but not leadership diversity. So I thought, well, this is really important. If we believe this has an effect on competitiveness, we should be measuring it and then seeing how it correlates with other measures of competitiveness.
So that’s how I got into being asked to do this. But I remember thinking, OK, the new term—or a relatively new term is inclusive growth. I think I’m going to look at all of the new books—and there have been a ton of them—that have come out on inclusive growth, and see what they say about gender. Nothing. There is no index for gender in inclusive growth books, OK? Basically, there are theories of growth, there are not very good theories of inclusive growth. But even in those not-very-good theories, gender just doesn’t come up. So, really? I mean, is it not the case that if it—if we believe that women are disadvantaged economically in a variety of ways, would we not see that dealing with those disadvantages might actually be a conduit to economic growth?
So I was very happy to see that—one of the things that convinced me to do the HLP was that the U.N. had decided that on its sustainable and inclusive growth agenda, for the first time, the empowerment of women, gender equality, was going to be a goal. And the goal was going to be there because of the view that it actually feeds into the overarching goal, which is sustainable and inclusive growth. OK, so that’s—I want to sort of just start with that because I don’t think we have developed—look, we’ve only recently asked the question. There’s not a lot of evidence out there—and probably some of you know it in the room and we should make sure we have all of it—that kind of tries to estimate the effect of, say, female empowerment or gender equality on inclusive growth.
There are the studies like the McKinsey Global Institute study, which is just a particular version of saying the growth comes by mobilizing more and more women into the paid labor force. The growth is going to come that way, OK? We’re just going to say women are going to work at the same labor force participation rate as men. They’re going to work in the same sectors as men. They’re going to work the same number of hours as men. OK, if you do all that, you’re going to get a growth effect. There’s no doubt about it. And because they’re more—will it be more or less equal? Well, that—it may be more or less equal in terms of gender equality. Actually, the inclusivity of the income distribution not really so far looked at.
I want to be clear here, we don’t know a lot of things because we’re only recently asking the questions. The best macro work on this I think has been done by the International Monetary Fund. And Christine Lagarde has not been an insignificant influence here, because she has said to her economic team—and she’s got really good economists working for her—would you please do work which tries to demonstrate that lower degrees of income inequality are associated with greater degrees of gender equality, OK? So there is a whole bunch of studies we used in the U.N. report, where we kind of took—we took measures of gender inequality and we looked at them relative to GDP per capita. We looked at them at the rate of growth of GDP per capita. We looked at them at the rate of growth of GDP per capita, plus measures of income distribution—equality or inequality.
They’re all IMF studies. And they all show that lower levels—or, higher levels of gender equality show up in terms of highly correlated with—and here I’m going to use the word correlation, because that’s what it is—highly correlated with income per capita, growth of income per capita, growth of income per capita with measures of inclusivity or distribution. That’s what they show. And they also show obviously another one that gender equality is tightly linked to progress on human development indices. OK, so that’s how I would start to answer the question.
LEMMON: And it’s interesting, we were just at a G-20 event in Berlin last week. And really and truly this conversation—there was a whole day of conversation about inclusive growth, and one mention of gender.
TYSON: Well. (Laughs.) Really? That’s amazing. I would have thought by now it was a little more mainstream. That’s amazing. OK.
LEMMON: So I would ask you, in terms of the barriers, this is something you’ve studied and that we walked through a lot when we were coming up with this report. And when we were really working on the conclusion of this report, we kept coming back to the idea that stymied opportunity is the opponent of global stability. So how do we frame this in ways that really resonate with people, and connect this? And so how do you think about the obstacles and how to address them, as somebody who is, you know, a groundbreaking policy maker?
TYSON: So we—the panel was meant to cover countries at all development levels, from the most developed country to the least developed country, and across all regions. So the question that the panel asked itself was, well, what are some common structural barriers? What do we think—so, you know, the level of development is basically obviously going to be worse for men and for women, and there’s going—there may be associated much greater gender disparities when there is a lower level of development, but what’s common? So our list looks quite similar to your list. It’s—we lay it out a little differently.
So we kind of identified essentially common—well, the role of social norms, the expectations of men, women, and institutions in terms of what is appropriate for women to do and what is appropriate for men to do. So social norms. The OECD has done a lot of really interesting work on this with something called the SIGI index. And they try to measure degrees of discrimination, which include differences in social norms and show the effect on economic growth.
The second one, obviously, that the IMF has done a lot of work on is—with the World Bank—is discriminatory laws themselves. And I think that’s—obviously, if you can—if there is actual discrimination or lack of legal protection then one thing—it may not be politically easy to go after, but it’s obvious that if you could tackle that. it may be difficult politically. It may be easier to tackle that than social norms. I mean, social norms are basically what we’re all carrying around with us and that get started when you’re very young. And I mean, just the disparities, say, in who takes care of household duties between boy and girl children. They exist.
So social norms, discriminatory laws. We took out as a category we wanted to identify—and I was talking to Gayle about this before—the whole issue of care. So given that expectations and social norms feed into major differences in the percentage of unpaid work done by men and women—and that’s true around the world—we said, well, that’s a common barrier. That’s common. This was somewhat controversial because women who were representing the developing economies, the poorer economies, said it’s not really a problem for wealthy women. They just pay for child care. Like, why do we need to worry about this?
And we said back, you know, because clearly the availability of child care and the price of child care—there’s study after study that shows that women’s—that affects women’s participation in the labor force, it affects their part-time versus full-time employment. It affects their career path. So every indicator at work success is going to be affected by the provision of care.
And then we basically wanted to get at what is more of a problem in the developing economies, and that is access to digital and financial—digital cum financial, because these are tightly linked—assets. And so those—we ultimately ended up with those four. There are lots of other structural constraints. Those are the four we called systemic, meaning that they’re overarching, meaning that they affect economies at all development levels, with the last—the financial and digital being the least affected by development. And then we went ahead with that.
LEMMON: One of the things we talked about in one of our calls as we were working on this is the role of entrepreneurship, and the role of microfinance versus small and medium enterprises, and how to think about that continuum.
TYSON: Yes, yes, yes.
LEMMON: That is one solution. It’s one that gets talked about a lot in the context of women, but it’s part of a whole broader ecosystem, as you were—as bringing up and as our call was discussion when we were working on this. And one of the solutions that we have thought about and we talked about is this idea of a challenge fund, or a kind of a fund that was focused on addressing some of the issues. And I wonder, as a policymaker, how do you think about using dollars to target things that are going to make a difference in women’s lives, given that there are multiple channels through which that money then gets funneled through? And I just wondered—
TYSON: You mean, do you think it’s good to have a gender challenge fund, or you think challenge fund versus something else? Because you—
LEMMON: Challenge fund versus something else.
TYSON: Versus something else. Versus something else. It’s very hard. I’m going to start, again, with a kind of let’s put all this in perspective in terms of what we know and what we don’t know. One of the challenges posed for the U.N. panel, and therefore for the authors, was we were asked, whenever possible, to assess the effectiveness of intervention—that is, does it work, and does it work relative to its cost, is an even more sophisticated question. And the reality is that there are many, many things being tried around the world. And there’s not a lot of assessment of their effectiveness.
Now, in microfinance, we actually do have a number of studies now which kind of come up with positive but modest. OK, that is relative to expectations of how the microfinance would actually lead to the ability of women to take on entrepreneurial risk. The way the loans occurred, the size of the loans, the other missing elements that a woman would need to actually effectively use that finance for entrepreneurial activity, for a whole variety of reasons, the evidence—and it’s been looked at, this particular one, because microfinance has scale. It’s got, you know, 200 million-plus women who are—have been benefitted to some extent by access to microfinance. But the evidence on the entrepreneurship part of that is really not a sustainable effect. Not a sustainable effect.
So do we know something that does work? I think one of the things—we did do a little bit of a deep dive into entrepreneurship. And I think our—what we found is the access to credit is insufficient. You actually do need an access to—either—to some basic business skills. It doesn’t have to be a lot, but it’s kind of like training to use the finance. And then the other thing is kind of an access to a network. So basically, you’ve got—if you’re really trying to build something even slightly larger, you have to figure out how to get your service or product to a larger group of customers, right?
So one of the things that, you know, I think while they weren’t representative entrepreneurs, I think we’ve learned lessons from the Goldman Sachs 10,000 Women, because they weren’t representative because these women—many of them already had entrepreneurial activities. But a lot of them weren’t that sophisticated. Some were pretty sophisticated, but some were, like, food services for the local construction site, where the problem was the truck—having the right truck, having the right refrigeration, having the right logistics for the delivery of the supply—relatively simple things that capital could help you get. But it’s not the only thing.
So I would say the entrepreneurship stuff kind of suggests that. But even in entrepreneurship, you do have this very significant importance of social norms, because women choose different kinds of activities. They’re more likely to choose a spa-like activity than a production of a product that can go into a large distribution facility. So their entrepreneurial ventures tend to be smaller. They tend to be less profitable. And you could say that’s a sectoral effect.
I think some of the really fascinating work that the World Bank has done is really they have a number of interventions where they demonstrate that if young girls understand the differences in income streams between one kind of occupation and another, between one kind of entrepreneurial activity and another, they actually—that affects their choice. OK, but going into it they would—they didn’t know the difference. So normally—OK, women do this, I’ll do that, this has been done in my family, I can’t think of breaking out of this. But if you actually give them information they actually do break out. It’s very—yeah. So, yeah.
LEMMON: You were talking at the beginning about women as sort of an obvious part of the global growth discussion. And I wonder why—and this is something we really looked at with this paper—is why the policy conversation in some way lags the obviousness of some of the economic conversation. (Laughs.) And not to be funny about it, I mean, really it’s—there is sort of a conventional wisdom that if you get more people into the economy and you address these issues you will have greater growth levels. And yet, the policy conversation kind of remains fairly siloed. I wonder why you think that is.
TYSON: I guess a number of things come to mind. Let’s go to the issue of growth and back to the standard way this is done, which is labor force participation rates. Those are misleading, because we do have this whole problem of who’s going to do the unpaid care work of the women go into the paid care. So it’s actually not appropriate to say if we just raise the paid labor force participation rate of women we’d get this amount of GDP. There’s already some GDP that’s not being counted at all, that’s the unpaid care, but who would do the work? It actually has to be done. It’s not that it doesn’t—that it goes away if the person doing the unpaid care goes to work.
So we’re—part of it is this whole notion that we’ve organized all of the unpaid care in a way which actually keeps women in the—out, to a significant extent, in the measured estimates of growth. We’re not measuring it. We’re just not measuring it. I mean, so I think that’s part of it.
LEMMON: Can I interrupt you and say, should we change the way we measure?
TYSON: Yeah, I think we should. I think if we think that—and I think we do—that this—that this is a—this is a use of time that is contributing to society, just as our use of time in paid work is contributing to society, but we’re measuring one contribution and not the other, I don’t—I think we’re missing something. We’re missing a lot, actually—(laughs)—in terms of estimated amounts of unpaid care. So I actually think efforts to get a better handle on this, and then say this is what the economy is.
Now, a lot of people would like to—would like to say, and in some societies this is possibly the solution—you know, the more unpaid care moves into a paid environment the more we’ll measure that. OK, so basically if you take your child to paid child care, that’ll get measured. If you take your child at home—take care of your child at home, it won’t. Same thing would be true with the elderly. But a lot of societies aren’t going to get to that paid solution very fast. So, in the informal economy, for example, where you’re trying to measure how much women work, a lot of women in the informal economy are basically there in part because that allows them the same kind of time flexibility or being at home flexibility that you need if you’re going to juggle two things. So I think that this whole issue of measuring care and thinking about solutions that work has got to be part of getting at the right estimate of growth. And I—yeah, I do think that.
LEMMON: And I interrupted you because you were—you brought that up as an answer to the question about why the policy kind of lags.
TYSON: Oh, yeah. I was using—yeah, there were a number of things that came to mind. So one is this mismeasurement. Two is—and, again, it’s a mismeasurement, but maybe it’s a symptom rather than a cause. I was saying to Rachel as we walked in: Wouldn’t it be great if we took—well, I went to a really interesting session at the IMF on gender budgeting a few months ago. So gender budgeting is a really important concept, I think. And the concept is you should actually look at an entire national budget to look at its gender effect, because you’re not—you’re not paying attention to the fact that, for example, if there’s a major gender effect on maternity, OK, or there’s—on childrearing, or likelihood of getting pregnant. There’s a major gender effect with a major budgetary affect. It’s plus or minus, but nobody is taking a look at that. They’re not asking that question.
So I do think we would be better off if more countries tried to do at least a preliminary assessment. So for example, on job creation. The International Trade Union Congress did a fund report. And they said, OK, right now everybody’s talking about the importance of infrastructure investment on employment. Let’s compare spending a certain amount of money on infrastructure investment and employment with spending the same amount of money on childcare and schooling for preschool and employment. So they actually found a bigger effect if you spent it in the more labor-intensive way, if you spent it not so much on people building a bridge but actually on going and taking care of children. It’s a much bigger multiplier effect.
So if you just were thinking about it from the point of view of a macro or multiplier, in that case you would say, oh, that was really interesting evidence. You should take a look at that the next time you’re talking about employment effects, OK? So, now, why don’t budgets look at that? You know, it’s because this—you know, this is a chicken and egg problem—because until very recently these issues have not, I think, been considered to be of potential macroeconomic importance. The term that the IMF always uses is, is it macro-significant, OK? So they’re required to do macro-policy, not interventions which might affect the way a particular sector or a particular community.
So they’re look for what is macro-significant. So maybe the composition of government spending is macro-significant. Maybe the composition of government tax is macro-significant. High margin tax rates on secondary earners does reduce labor force participation. We know that. That’s absolutely established. So if you care about the secondary—you say I’m going to adjust my tax policy. Macro-significance would be the case—well, so the way that Christine Lagarde is trying to bring this in now is actually she has—I don’t remember the number of countries but it’s sizable. Maybe somebody in the room does know this. Something in the order of 20 to 30 countries where, on an experimental basis now as part of their annual macro review, they are looking at gender questions.
It never would have been part of a macro review before. I mean, the first one ever was Japan, and that was because Japan’s labor force participation rate is high but they have the wrong demographics for growth. They need even more women in the workforce. So basically, it was clearly macro-significant. But there are other countries for which some of these variables are macro-significant.
So, but again, why are they asked? I think they’re asked a little bit because Christine Lagarde is the head of the IMF and she said: We’re going to ask this question. I mean, she will say—and I was at a—it was interesting to see this. I was at a small dinner with some of the titans of the technology industry in Southern California. And she was the speaker. But it was just very informal. And one of the people asked her: So what do you think is the most important thing to do to encourage inclusive economic growth? And she said: No questions asked, gender equality.
No one is—like, what? Gender equality? I mean, is it not some—you know, look at our technology. Look at our networks. Look at our automation. Look at our—(laughs)—gender equality? Nobody said gender equality, but the looks was—(laughs)—
LEMMON: What was the reaction?
TYSON: No, the looks was, like, startled. And I said something like, I’m not surprised. I’ve heard this before. (Laughter.) I’ve heard her say this before. So, but, you know, there is an effort now at the Bank and the Fund and both of them to basically make sure that finance ministers, talk to labor ministers, talk to—a number of countries have, we don’t have, but many countries have—ministers of gender or diversity or something, to make sure that the finance ministers are in dialogue with them. Before diversity was even an issue—and I used to be the head of a CEA and to, like, macro events—the labor economists, the labor ministries didn’t talk to the finance ministries even then. I mean, so they’re, like, considered, oh, you don’t really understand what—the macro economy. So we’ve got to get more of that. And it is—I think the bank and fund, again, are really trying hard to get that dialogue going. They really are.
LEMMON: I have one last question and then we’ll take all of your questions. And it’s just this one, which is what do you see U.S. policymakers having levers to pull, because that’s really—you know, the focus of this paper was really to put this in front of U.S. policymakers and say: If you care about inclusive growth and if you care about these conversations, then here’s a set of issues maybe you didn’t necessarily think about before, but that really do matter to this discussion.
TYSON: But when you asked this question, you were thinking primarily about U.S. international policy, or were you thinking about U.S. domestic policy?
LEMMON: Well—(laughter)—being the Council on Foreign Relations, we will focus this—(laughter). I’m going to artfully go under the limbo stick and we’ll say that because we are at CFR we will push more towards the international sector.
TYSON: Right. I think that’s fine. I think that’s—I think that makes sense.
Look, your challenge fund, maybe we can get—maybe you can succeed in getting Ivanka Trump interested in your challenge fund. She seems to be—she seems to have acquired the mantle of being the gender voice in rooms of economic policy. So she’s the gender voice with Gary Cohn. She would be the gender voice of the president. She would be the gender voice with—they’ve set up this business group, right? So maybe she would be interested in doing the challenge fund for international development. I mean, seriously. You have to have someone to take it on—
LEMMON: To champion.
TYSON: To champion it at the top. You know, the thing is we had—again, so much does depend on that because—let me take somebody who’s not in the room here but I’m sure almost everybody in the room knows her, and that’s Melanne Verveer. I mean, when you have a secretary of state who says that gender quality is—you know, basically gender rights are human rights and human rights are central to my State Department vision, and therefore I’m going to have an absolute ambassador who will around the world and work with governments to champion what the State Department can do for gender, then you’ll—then you’ll get some action because you actually have other—you have countries and organizations within countries and NGOs and businesses that you link to.
So there are lots of NGOs who are focused on this issue. There are lots of businesses, particularly large multinational companies, focused on this issue. And when you have a government organization it doesn’t really have to have a lot of money either. You’re convening. There’s a kind of convening power, and therefore a multiplication power that goes on. So I think that that’s what I would say, number one. Number two, I would say I guess I would be concerned that a number of the gender items in the international budget and in the domestic budget are related to things that have to do with reproductive rights. And if you in any ways compromise women’s reproductive rights, that is basically a slam on their gender equality at work. I mean, there’s just no doubt about it, it seems to me.
So if you—if your position starts from a values position or a religious position or whatever, that you are in no way going to deal with the issue of reproductive rights and protection women from early pregnancy and things like that, I think it’s very had to offset that with a number of other policies to make up for that. So in a way, what you’d like to do is you’d like to do the gender effect of the things they’re taking away, and then measure it as the gender effect of the things they’re adding. And I’m really concerned that what they’re taking away is going to be much more detrimental.
LEMMON: And in the report, we do work around a lot of these conversations. And we welcome your thoughts on it, because we obviously know that this is a dialogue a lot of people are having, and working to put in the mainstream.
I’ll start here and then we’ll work around. Thank you. We’ll go to questions.
TYSON: Can I say one more really—a positive thing in the report was we did regions. And then we did—and we followed this from McKinsey. I think they’ve done a very good job on this, doing the best performers and the worst performers in a region. Even—you know, both in developed countries and in developing countries, there is a lot of regional variation in terms of everything—wage disparities, you know, sectoral distribution disparities, child care disparities. So even in poor countries, the poor performers can learn a lot from the good performers. And there’s a lot of room even within your development level to make progress. And I just view that as part of the good news.
For political reasons, we were not able to name who the good performers and the bad performers were. That would not have been appropriate for a U.N. report. But in every—at every statistic, we have that range. And oftentimes it’s significant. So countries do make a difference. And that’s—actually, I think it’s also important to have a country focus. And the report does that, so.
LEMMON: Yeah. And we have some case studies also from Liberia, and India, Japan, some others in there.
Let’s start with Louise and then go across the room.
Q: Louise Shelley, George Mason University.
Q: One of the things that struck me—I haven’t been able to read all the report, I just glanced at it—was that there wasn’t in the conclusions a discussion of the problem of corruption for women. And that’s such a pervasive phenomenon in the developing world. And women are so excluded for political reasons, but also for value reasons, from these corruption networks that it prevents them from becoming more part of the economic system.
TYSON: That’s a very—
LEMMON: I want to just quickly address that, and then give this to Dr. Tyson. We were talking about this a little bit on the way in. If you look at the Liberia case study—
Q: Right, I saw there’s a—
LEMMON: And this is where—and, you know, this is something that came up a lot, which is that a lot of folks, the women in the informal economy, one of the solutions—we hosted Marty Chen from WIEGO.
TYSON: Oh, Marty Chen was a very active part of our panel.
LEMMON: Right, earlier in this. And she was really talking about the legal protections for informal workers, and the importance of that. And one of the things we saw on the ground was that women who could establish a memorandum of understanding with local police actually saw their lives improved measuredly. And that was one of the recommendations that we were really looking at, was because women would say—I mean, we went to the market in Liberia and were talking to a lot of women.
Traffic was horrendous. We were all kind of crowded on the side of the road talking to these women who were telling us about, you know, buying small goods, putting them out on a blanket, and then the minute the police come they take everything. They lose all of their money. And then some of them could not then pay school fees for their children. So the second and third round effects of that are so significant. They don’t stop just at having corruption and being preyed upon. And we were talking literally about legal. Maybe you want to discuss it.
TYSON: No, I—that’s how it came up in our work. And it was really primarily through the informal economy representatives who said, look, most of the studies of legal discrimination are about absent—laws that discriminate against women, and the fact that countries have them and they should be eliminated. But what Marty said, and others said, is there are also the issue of legal protections for women, particularly in the informal economy, where you have harassment all the time. It can be sexual harassment. It can be harassment of can you use this street corner. It can be basically pay me off and I’ll let you do this job. There’s no—they’re informal economy, so there’s no formal agreements. There’s no legal protection. So it came up that way.
It came up—I made a point of—it was really my section, because I thought I really wanted to make the case—that governments around the world who are committed to gender parity, or claim to be, have a very powerful tool they can use. And that is procurement. They buy this stuff. They buy goods and services. And they can try to do a variety of things to improve the ability of women to compete. They can help train them. They can break down some of the contracts into smaller size. So they could allocate them in less-corrupt ways. (Laughs.) I mean, so if you had a more transparent, more open procurement system—you don’t even have to go—I mean, it’s controversial.
I mean, some countries have basically said and then I want to have set asides for a certain percentage for women or minorities of different—even before you get to the set aside, just if you improve the process. And I think it’s largely in breaking down the size of these contracts and looking for suppliers—new suppliers who are outside of the standard kind of places where you have a corrupt network, there’s a huge amount of economic activity for women there. So that was another place that we thought about corruption. And then—well, I guess—I guess that’s it.
I mean, basically—oh, I think one other way, but it’s not directly responsive. But I think we need to think about this. And that is the issue of how—it’s another form of corruption, which is subsidies and—government subsidies and programs are not very well-targeted. They’re not well-targeted. So a lot can be skimmed off the top. A lot can be misdirected. A lot does not get to the place or the person. If you went to a digital—the more you go to a digital system, the more you can correct that. So actually I think this whole issue of having digital accounts for individuals with an ID number and then the government subsidy or payment goes directly into that account—the kind of thing that India’s really trying to do everyplace—I think that’s going to be a way to handle corruption too.
LEMMON: And just one point, that we went to India as part of the research for this. And one of the things that was fascinating, I went to—one morning to a training—a financial inclusion training that was basically women who had gotten bank accounts attached to their national ID, right, to the DARA program in India. And I asked them all: Do you prefer the ATM card or the biometric system you have now, as your thumb? And so they all—you know, we didn’t need a translator for it—and they all up their thumb. And I said, you know, why? And they say, well, because our husbands can’t take our cards. (Laughter.) And, you know, that’s—you know. On the other hand, they also picked up something which I didn’t think about, which is—and I hadn’t seen talked a lot about—which is in the demonetization in India. There were a lot of women who had hidden money from their husbands who really got hit—who really got hit.
TYSON: Yeah, anybody hiding money got hit.
LEMMON: That’s right. In fact, I interviewed a lot of men who were—said that their housekeepers would ask them to change money for their sisters and their aunts and people they knew in their family if they were working for an affluent family. So it was really—both of those were, I think—
TYSON: So, at the end of the day, I think the notion of moving in the direction, you know, he’s trying to move in is correct, but the trading—he didn’t expect that level of dislocation, I mean, that the transition is a very complicated one.
LEMMON: To Molly and to Heidi.
Q: Well, thanks to all of you. This is a really interesting conversation. And I also—I was part of the—is this on?
LEMMON: Yes. Just move it a little closer. Thank you.
Q: Sorry. I’ll lower this. Part of a different U.N. high-level panel on sustainable development goals. And we extensively used this work, showing what should be obvious, that the more you have women involved the better off you’re going to do. And I have a question that’s—that has gender aspects, but relates to your new book. So you’ve talked about the effect of sort of inequality effects, right, of technology, in the U.S., but also elsewhere. And so I’m curious, can you talk a little bit breaking that down, because it’s—sort of what aspects of—because technology itself you can understand as being agnostic, right? It’s actually what are the ways—the sort of business and policy and regulation ways that sort of make those effects one way or the other. And I’d be really curious about gender effects here, because you did mention digital access and digital inclusion.
TYSON: So, yeah, I don’t think—I think this is a really important topic. And I don’t think I have a lot of answers. I think I have a lot of questions. OK, so basically what’s going on here is a whole other stream of research that I have been interested in. And actually, closer to my kind of—you know, if you looked at my career you would say closer to my research trajectory is to look at the effects of skill-biased technological progress, otherwise known now as automation, on both decomposition of employment and the degree of income inequality.
So no one, to my knowledge—we’ve started to look a little bit at that at the World Economic Forum, by kind of doing a projection of job growth over the next 10 years, where do we think. So the only thing we know for sure is that in the developed countries—these are mainly developed country analyses—anything that is associated with STEM is likely to be a job growth area, and everything not associated with STEM. So it just means that everything that went with—that we tell young girls and college students to do, is to make sure that you have an appropriate background in the technical, analytical skills you need for whatever application of the technology you end up working with.
So I think we know that. There’s a big debate among—in the technology community itself about, well, as we automate more of the—those tasks which are cognitive routine, and those tasks which are manual routine, what will happen to a task which is not that at all, and that’s sort of—it goes back to care. It’s basically health and care for humans—care for humans by humans. So there are a lot of people who speculate that this will actually be a model which will actually bring more attention and more income into sectors that have traditionally been female sectors. But I would say this is highly speculative right now. I would say this is worthy of research, but I don’t have any answers. And we decided not to speculate.
The only thing we did say in the report itself was that interestingly, and not surprisingly, if you look at independent work around the world, sort of gig economy work, part-time work, flexible work, whatever you want to call it, that there’s a pretty high percentage of women. And all of them will say it’s for flexibility. So that’s really—I think we know that. But, you know, one of the things you’d say is that the technology right now looking forward is likely to take out assistants. It’s likely to take out a lot of the administrative, white collar, office functions that are actually career progression functions that are held by women. So that’s not—that would be a negative. So I just want to say that there are all this speculation. There are those kind of quasi-facts, but I don’t have any answers for you. I think it’s a really good topic, OK? (Laughs.) That’s what I would suggest.
Q: So, first of all, congratulations on this report.
LEMMON: Thank you for being here.
Q: I think it’s a fabulous report, and it’s very well-timed. And thank you very much, Laura.
TYSON: Thank you.
LEMMON: And thank you for being here.
TYSON: Heidi was a—yes, Heidi is—
LEMMON: (Inaudible.) Absolutely. Absolutely.
TYSON: And Heidi’s—that’s right—(chuckles)—and Heidi’s report was very—
LEMMON: We’re really grateful.
TYSON: Heidi wrote a paper a few years ago. And when I was thinking of should I take on this task, I was influenced by the fact that she had done this very good paper. So she—(laughs)—
Q: Well, thank you. So this is a question—a theory, a question, and a call for advice. So having worked on the mainstreaming of women as a driver of economic growth, I have also seen that there’s been sort of a—there’s been a lack of traction, particularly with the increase of the use of inclusive economic growth. And I think that—my theory is that just about the same time that we were starting to get some traction on the mainstreaming, I started getting questions about the fact that, well, if labor force participation is a driver of growth, then why aren’t you focusing on white working men?
And I thought, when I started this I had no idea that that would be a question that would be put to me. But in the past two years, particularly in the United States, we’ve had a complete falling off of a significant portion—more than any other—I think almost any other developed economy—of predominantly white working-age men. So I’ve also seen that the conversation and the—you know, the policy community has shifted very much in the direction of inclusive growth to really target what do we do for those left behind by globalization and technology, which is incredibly important. But I think it’s pushed this conversation about mainstreaming of women as a driver of growth really, you know, very much to the side.
Have you also seen that? What is the right response to it? And can you actually drive those two—you know, those two conversations in the policy world together in terms of a labor force participation argument?
TYSON: So I do think—I’d be interested in what others have to say on this, because I do think—I’m a little worried that we’re in a peculiarly American discussion right now. I’m not sure that the—in Europe, the discussion is about youth unemployment. It’s not really about middle age men taking opioids because they don’t have jobs. That’s a particular U.S. issue. And it’s possibly because the U.S. has—in all the countries, we’ve had a decline in manufacturing employment as a share of total employment. We’ve had a movement to other kinds of jobs. And the people who are most displaced by those—by manufacturing loss were certain skills, certain ages, and certain places, where the ability to move those skills and those people to employment that might exist, or to move employment to them, was very limited. It happened relatively quickly and it happened very—and so there’s just a dislocation effect which actually happened to be very pronounced in certain places. That’s one thing.
The second thing is, I think during this—until women’s labor force participation rate in the United States sort of stagnated, there was this whole period where it was rising. And that was associated with rising high school and college graduation rates. A lot of the white men left behind here are high school graduates. And, frankly, the technology has left them behind. And the women have actually been graduating at higher rates and taking on white collar—they’re not taking on the manufacturing jobs, because those are going to the machines. They’re taking on white collar jobs that are associated with a college education. Maybe not the same level of skills and benefits as might have been—or, benefits and wages that might have been the case with the lost manufacturing job, but they have the skills to do it.
I’m just trying to come up with—I think we need to look at education. I think we need to look at the sectoral composition of jobs, because it’s—and if we—if we care about what happened to that group, yeah we should care, but then we need to understand the cause of their problem. The cause of women’s problems, we’re arguing, is not because of education. It’s not because they’re not in the right sectors. It’s because there are structural impediments to equality even in the areas that they’re in. So I would say it’s a different set of factors, causes of the problem we’re looking at. But, yeah, we should certainly worry about the displaced workers. And if they happen to be white male workers in the Midwest, yes, we should worry about them. (Laughs.) That’s how I would answer it.
Q: So, but how do you keep—how do you keep the—and this is a—it is very much a U.S. conversation. But how do you keep the mainstreaming and the promoting of the idea of, you know, more inclusive gender driving economic growth within the U.S. as something that is as important? Because I think right now, from a political perspective, it just isn’t viewed as as important.
TYSON: No, I think that is correct. I’m not sure how you—that was not considered as important by both men and women in the election of 2016. So I don’t think I—I don’t think I have an answer for you, Heidi. (Laughs.) I don’t think I—
Q: We’ll work on it.
LEMMON: And it’s interesting, at this G-20 event—it was a think tank event. There was a lot of discussion about inclusion, and inclusive growth, and almost no discussion about women. And I wonder if there’s some way to change it from an either/or to an and. And I do think that some of that is in the conversation and the way some of these issues are discussed, so that it’s not only about one group or the other, but that the conversation around this doesn’t leave women out, which I certainly, as somebody who is not an economist but was, you know, in attendance, certainly noticed.
TYSON: But can I also say, let’s get the—what do we mean—we should also talk about what we mean by inclusive growth. Because inclusive growth to some doesn’t mean that, you know, you just have high labor force participation rates for everyone. They’re all in the economy. That actually is Paul Ryan’s view of how we should do welfare policy, just make everybody go to work and you don’t get any help unless you happen to be at work, then we’ll give you the help maybe. That’s one definition of inclusion.
Another definition of inclusion is—really deals more with the income inequality. And I think there you could probably find that you’d have more women on minimum wage in more—you have a very large fraction of married women on minimum wage jobs, OK? So that’s a difference. You might have in income inequality—this goes to my notion of high school educated workers. The big collapse in earnings—labor earnings in the United States, the biggest collapse was median wages for men who had only a high school education. That line went like that, OK? Not true for women, because they were entering the labor force, and they were entering—they were entering new jobs that hadn’t existed before. And then they were getting educated. So you actually see their moving into the college educated or the community college educated, where the wages rise.
So you’d have to look at—if you’re thinking about it from an income distribution side, you have to think about the interaction of skills, education, and the quality of income, and then look at gender differences in those areas, basically.
LEMMON: And this will be our last question. We will end promptly at 3:45.
Q: Hi. Thank you. Jenna Ben-Yehuda of the Women’s Foreign Policy Network.
I guess you mentioned—cited Japan as the example of this first country that had done gender budgeting largely as a focus of—as a function of attempting to resolve labor participation.
TYSON: As a macro-relevant function.
Q: Right, right. Which kind of has me thinking along the lines of this notion of unpaid work and quantifying that and its value and all of that, I mean, it would see that, right, birthrates in the U.S. are going to hold, like, largely constant. But I do see this huge demographic bubble of care of seniors—
TYSON: Yes, you do. Mmm hmm.
Q: And there was a great article in The New York Times a couple weeks ago about how daughters make the best health care providers, and how we’re kind of at the precipice of this huge shift in that direction. Along the same lines of the Japan example, do you—excuse me—do you see the possibility for this to become a forcing function for the urgency of research or some kind of more—you know, does it—does it lead for more pressure for understanding this issue? Does it create backlash? I mean, as we confront this very intense economic reality in the next, what, 10 to 15 years, how does that change this conversation?
TYSON: So I think I can think of two ways that it changes the conversation. One is—one is we need as—again, this is not just a U.S. conversation, but certainly a developed country conversation. We need to think about how we provide—so most health care systems do not have elder care provisions in them. So we have—we don’t have—we don’t have the right insurance systems to actually deal with the particular problems of taking care of someone in assisted living. We don’t have the right tax policy for taking care of people in assisted living. I was just involved in—with a friend. In terms of how our tax policy works, she was in assisted living. If they sold her property, they had to pay the capital gains—you know, it’s like she had moved to another house, but it doesn’t count in tax law as another house because it’s assisted living facility. But it is another house.
So we are going to have to look at tax law. We are going to have to look at insurance policies, because we’re going to have to fund some of this, I think a significant amount. I do think there’s evidence now just beginning—to go back to social norms—that more men now are going into not the role of doctors, but the role of assistants to care, which actually have traditionally been more female than male, except when you need the physical strength to move a body, you know? (Laughs.) So I think we need to—there will be sort of some change in gender norms on this over time. But I do think we have to think more about creating paid employment opportunities for—to take care of this major challenge to our society, which is real.
LEMMON: With that, I want to thank all of you for joining us today. And I want to thank Dr. Tyson. We really, as a program, would like to thank you for being there. And to all of the folks who were part of this advisory panel and part of this effort, thank you so much. And of course—(inaudible).
TYSON: And we’ll all keep trying to make it mainstream. (Laughter.) Wherever we go with finance ministers, with budget ministers, whatever, just keep trying.
LEMMON: Thank you. (Applause.)
This is an uncorrected transcript.