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Female Labor

How to boost female employment in South Asia

Martin Rama's picture
What's driving female employment in South Asia to decrease


South Asia is booming. In 2018, GDP growth for the region as a whole is expected to accelerate to 6.9 percent, making it the fastest growing region in the world. However, fast GDP growth has not translated into fast employment growth. In fact, employment rates have declined across the region, with women accounting for most of this decline.

Between 2005 and 2015, female employment rates declined by 5 percent per year in India, 3 percent per year in Bhutan, and 1 percent per year in Sri Lanka. While it is not surprising for female employment rates to decline with economic growth and then increase, in what is commonly known as the U-shaped female labor force function (a term coined by Claudia Goldin in 1995), the trends observed in South Asia stand out. Not only has female employment declined much more than could have been anticipated, it is likely to decline further as countries such as India continue to grow and urbanize.

The unusual trend for female employment rates in South Asia is clear from Figure 1. While male employment rates in South Asia are in line with those of other countries at the same income level, female employment rates are well below.
From the South Asia Economic Focus
Source: South Asia Economic Focus (Spring 2018).

If women are choosing to exit the labor force as family incomes rise, should policymakers worry? There are at least three reasons why the drop in female employment rates may have important social costs. First, household choices may not necessarily match women’s preferences. Those preferences reflect the influence of ideas and norms about what is women’s work and men’s work as well as other gendered notions such as the idea that women should take care of the children and housework. Second, when women control a greater share of household incomes, children are healthier and do better in school. Third, when women work for pay, they have a greater voice in their households, in their communities, and in society. The economic gains from women participating equally in the labor market are sizable: A recent study estimated that the overall gain in GDP to South Asia from closing gender gaps in employment and entrepreneurship would be close to 25 percent.

Satellite factories create more jobs for women in rural Jordan

Michelle Davis's picture
Also available in Arabic
In Jordan, only 14% of women are in the labor market, and job opportunities for them are scarce. (Photo: Mohamed Essa / IFC)

Many countries struggle with creating more and better jobs, especially when they try to increase the number of women in the labor market. Integrating women from more traditional, rural communities is especially difficult. And, if we are talking about a country with the second lowest female labor participation in the world, it might seem like an impossible task. This is exactly the situation that Hashemite Kingdom of Jordan faced a few years ago, and today they provide an interesting example of how innovative policies can address this challenge.

Four examples of cutting-edge research on labor topics

Esteve Sala's picture
One of the topics of the 30 research papers is female labor in Latin American countries. (Photo: Charlotte Kesl / World Bank)

Economic research is essential for designing and implementing evidence-based solutions to improve job opportunities. In a recent conference organized by the World Bank and IZA, researchers from around the world presented over 30 research papers on important labor topics such as migration, gender, youth employment, and labor policies in low-income countries. Here is an illustrative sample of four innovative works presented during the conference.