Women employment can be a complete game changer for any country says IMF MD
India’s national income will rise up by 27 percent if the participation of women in the workforce matches to the level of men, said Christine Lagarde, MD International Monetary Fund (IMF).
Delivering a speech in Los Angeles on the topic “Women Empowerment: An Economic Game Changer,” 60-year-old IMF MD Lagarde stated that equal pay and better economic opportunities for women would boost economic growth and create a bigger pie for everyone to share.
Lagarde’s speech stated
“Empowering women can be a complete game changer for any country. For example, if women were to participate in the labour force to the same extent as men do, national income would increase by five per cent in the US, nine per cent in Japan, and 27 per cent in India,” she said on Monday.
Better opportunities for women will also promote diversity and reduce economic inequality across the world, she added.
“To put it in a different way: if you discourage around half the population from participating in the labour market, you are basically behaving like an airline pilot who shuts down half his engines in mid-flight. Sure, your plane will surely continue to fly, but it would be such a crazy thing to do,” IMF Director Lagarde said.
Noting that across the globe women are still facing a triple-disadvantage and are less likely than men to get a paid job, Lagarde said that only half of the world’s working-age women are currently employed.
“If they do succeed in finding paid employment, it is more likely to be in the informal sector. And if they finally get a job in the formal sector, they earn, on an average, three-quarters as much as men even after having the same level of education, and in the same occupation,” she said.
Governments do have an important role to play
Lagarde said that the governments have a key role to play when it comes to economic incentives that provide women a fair shot in the labour market.
“We need to promote affordable childcare, parental leave, and workplace flexibility. We need to increase women’s access to finance and remove legal barriers that still exist in most countries,” she said.
“We also need to initiate smarter tax policies, including here in the US. Think of tax reforms to help low-income families, which are disproportionately headed by the women. And think of the benefits of reducing taxation on secondary earners in households, who are again, mostly women,” she added.
“So if you add up all things that can be done in each country, you get a powerful global impact. A global economic game changer,” Lagarde said, adding that major important countries have understood the need for gender equality, including the G20 grouping that account for 85 per cent of the world GDP and two-thirds of its population.
“These countries, including the US, have pledged to reduce the gap in women’s labour force participation by 25 per cent by the year 2025 which would create an estimated 100 million more jobs by 2025. This would be a huge impetus to growth and would reduce poverty and inequality,” Lagarde said.