The Potential of Reducing the Labor Market Gender Gap: Lessons from Latin America

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Written by Julia Pomares, Gala Díaz Langou and Belén Abdala

Globally, women are often subject to wide ranging employment discrimination and workplace inequality, leading to a lower economic status that is reflected in several indicators, such as the number of women living in poverty, the rates of unemployment, underemployment and the high proportion of unpaid work.

Women’s participation in the labour market has remained steady in the two decades from 1990 to 2010, drifting around 52%. In addition to the slow improvements in the incorporation of women into the labour market, the gap in the participation rates of women and men remains substantial. In 2010, women’s labour force participation rates were below 30% in Northern Africa and Western Asia, below 40% in Southern Asia, and below 50% in the Caribbean and Central America. This situation aggravates when gender identity is compounded by other types of inequalities such as economic and social power and discrimination on the grounds of race, class or income.

Gender equality and women’s economic empowerment are also crucial factors for the sustainable development of societies.

Women’s labour participation in Argentina and Latin America: causes and effects

Women face greater obstacles than their male counterparts to enter the labour market. Women show a lower activity rate than men in all countries in Latin America. In Argentina, the female activity rate has been stagnant for 15 years, showing a wide gap with the male: in 2014, the male activity rate was 54% higher than the female rate (71.8 vs. 46.5 MTEySS, 2014). Women also tend to be employed in less stable or temporary jobs within the so-called ‘economy of the shadows’. Women are segregated horizontally in low-productivity sectors and vertically in lower-ranking positions: they are mainly found in low-productivity sectors as salaried employees (37.6%), self-employed workers (20.2%) and domestic service providers (10.7%). This situation is consistent within the global framework. In 2011, it was estimated that more than 80% of working women in sub-Saharan Africa, Oceania and Southern Asia held vulnerable jobs.

Furthermore, women must accredit higher levels of training to be inserted in a job. 30% of working women have higher education, compared to 15% of men. Women last longer in the education system, but even though they have greater educational credentials, the pay gap remains as the average salary of men is 31% higher than that of women. Wage gaps are accompanied by the lower representation of women in positions of leadership and seniority in the private sector: women face greater constraints to attain decision-making positions. In Argentina only 4% of large companies and SMEs are run by women. This is not an exclusively local phenomenon, in the list of CEOs of the 500 largest companies in the world only appear twenty women. Women hold only 22 % of senior leadership positions, while 32% of businesses have no female senior managers.

Set situation can be explained mainly by the persistence of gender stereotypes and by the distribution of work within households, that is, the greater female participation in the activities of care. For example, in the urban agglomerations Argentina, women with children are involved in the labour market a 20% less than the ones without children in charge. This is not the case for men who are fathers, for whom there is no evidence of a lower participation rate in the labour market compared to men who do not have children.

Unpaid care is also one of the largest and most important gender inequalities relevant to macroeconomic policy formulation. This type of work supports the productive organization and reproduction of societies. In different socioeconomic contexts, care work encompasses from the care of children, the elderly and sick people in the home and community, to domestic work, fetching water and collecting firewood. Given that Argentina’s society is mainly urban (95%), care work tends to be essentially domestic. Societies depend on it.

Historically, in most societies families were organized with the male breadwinner model, where men earnt the family wage and provided, while women were responsible for domestic labour. With the progressive insertion of women in the labour market, the distribution of work within households did not shift proportionally. According to the latest survey of unpaid work in Argentina (INDEC, 2013), women invest 6,4 hours a day on household chores and care, which almost duplicates the time invested by men (3,4h).

Countries that have bridged this gender gap have done so by socializing unpaid care work, with three major policy instruments: provision of care services, expansion and de-maternalization of family leaves schemes, and public transfers for families with care needs. These policies help tackle at least three major issues: early childhood care and development, women’s labour participation (by relieving them of their care responsibilities); and youth labour participation (given that most of those who do not work or study are young mothers who could find employment opportunities in the care system) (World Bank, 2016). Effective public care facilities would allow young mothers to continue their studies and prevent them from withdrawing from the workforce. This, in turn, would facilitate the process of human capital accumulation, strengthening productivity rates and therefore improving economic performance of the countries in question.

Among all countries that are attempting to measure the value of unpaid care work, the monetary value of unpaid care work is estimated to range from 10% to over 50% of the GDP; an additional 20% to 60% should be added if the hidden contribution of unpaid work was recognized and valued. UN estimates show that if women’s paid employment rate was equal to that of men, United States’ GDP would increase by 9%, Eurozone’s by 13%, and Japan’s by 16%. In the 15 largest developing economies, the per capita income would increase by 14% by 2020 and by 20% by 2030. The unequal distribution of unpaid domestic care hinders a greater and better labour market participation of women. This, in turn, thwarts the overall development of countries.

Closing the gender employment gap: G20’s goal and the role of think tanks

With this background, the G20 set the objective of reducing the gender employment gap by 25% by 2025 (“25 by 25”), paving the way for the inclusion of an imperative sector. Gender equality is not only a fundamental development goal in itself, but is also economically profitable on strategic terms. Removing the barriers for female employment is central for the promotion of an open, dynamic and inclusive labour market, a centerpiece of B20’s focus.

The role of think tanks, such as the Center for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC), is critical to bring evidence and to inform gender related priorities in the G20 agenda. When facing large and complex problems we need the compass of technical knowledge. Think tanks provide research-based advocacy and evidence-based analysis that help inform decision making.

In such a context, the Women20 (W20) is a vital network that supports the G20 through specific recommendations for action, consolidated advocacy and expertise. Its topics include labour force participation of women, equal pay, women in managerial positions, the compatibility of family and career, the evaluation of gainful employment and care work, female entrepreneurship, access to the capital market and closing the digital gender divide.

These were some of the issues discussed last March in Buenos Aires, during the first W20 meeting in Argentina. The challenge now is to turn such agreements and consensus into domestic policy. 2018 will be Argentina’s turn to preside the G20 and, within this framework, the W20. In a context where the expectations of W20 have increased considerably, Argentina will have to lead discussions to move forth women’s economic participation and empowerment to fulfil G20 objectives. The 2018 insight will seek to give a voice to a vibrant civil society whose mobilization led to the conformation of movements such as the ‘Ni Una Menos’. It will address the challenges member states face to ensure women’s rights and gender equity.

Beyond economic contribution, women’s paid and unpaid work has a social value with considerable human development implications. The improvement of women’s insertion in the labour market is a pending challenge. It depends on a broad policy approach that place female employment as a priority, accompanying an investment in care, with active employment policies, and both communication and education programs with a gender perspective. International cooperation and mutual learning based on the different experiences are central points of the discussion. It demands the development of a comprehensive perspective on women’s possibilities and the breakdown of stereotypes about their role in society.