Women, Law, Norms, and Economics in the Middle East and North Africa


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 Arne HoelIn last week's op-ed for the Washington Post, World Bank Group President Jim Yong Kim provided the broader context for the Bank's concern about discrimination in general, and more specifically about anti-gay laws:
"Institutionalized discrimination is bad for people and for societies. Widespread discrimination is also bad for economies. There is clear evidence that when societies enact laws that prevent productive people from fully participating in the workforce, economies suffer."

The President went on to discuss legally enshrined discrimination against women and cited one study which showed high income losses arising from shortfalls in participation by women in Middle East and North Africa (MENA) region countries. Although arguments have been made that gender equality is smart economics, it should also be approached as intrinsically important.  The time is therefore opportune to look again at our 2013 report on gender equality and development in MENA -- "Opening Doors" -- which considered these issues in great detail.

The central theme of the report is why women in MENA participate at such low rates (on average 25 percent) even when today women outpace men in tertiary education enrolment.

Drawing on extensive empirical analysis based on macro and micro data, the report shows how MENA's unusually low level of female labor force participation can be traced back to a range of factors; none sufficiently explanatory on a stand-alone basis to explain why the region is different. But when taken together, oil, religion, law, and social norms form a potent cocktail which impede women's economic participation, and to the extent women do participate, steers them to the public sector and to selected occupations therein. One important message for the region is that the picture is not all negative: MENA has done well in equalizing education and health outcomes for males and females, and the expansion in the size of the public sector as governments pursued universal access to services was associated with increased labor force participation of women in the public sector.

As for legal discrimination, the report highlights the feedback between the legal situation and social norms: the law reflects norms but also reinforces them. But this does not mean that there is perpetual lock-in of norms and the law, because economic conditions can create pull factors which draw norms and the law in their wake. Norms about female labor force participation of women -- particularly married women -- changed over the course of two decades in the countries on the periphery of the European Union that underwent booms as a result of accession to the union.  That's just the most recent of numerous examples of the mutability of norms.

Nonetheless, because of the limited range of channels available to women, MENA is at a fragile stage regarding its developmental gains in gender equality. There is no more scope to expand the size of the public sector, but education systems are still geared for credentialing for those jobs. Meanwhile, the private sector -- especially the formal private sector -- has been squeezed by a poor business climate and a nexus of connections between incumbents and the government. Yet with wide access to education and exposure to global norms for female economic participation, aspirations of women in MENA are rising. In this context, restrictions on their agency are particularly anachronistic.

As the report concludes, it is not viable for governments in the region to stand still. Demographic factors alone mean that the pressures to change are building. If the private sector is to play its role as a source of opportunity for women as entrepreneurs as well as workers, long-standing legal obstacles (e.g. to asset ownership) will have to be tackled. Disincentives coming from the public sector (e.g. allowances accruing to the head of household, and subsidies which reduce the need for earned income in the labor market) will also have to be on the table.  For some MENA countries, such as Egypt and Iraq, a lack of a sense of safety and security will continue to repress female participation.

This in fact leads back to the broader context set out by Dr. Kim as well as the specific discriminatory effects of particular legislation. Laws also set the tone for overall inclusion -- or exclusion -- in the economy. At minimum, laws should not compound social marginalization. It is critical that the laws on the books are progressive, that everyone knows their rights, has access to the legal system, and that laws are in fact evenly and predictably enforced. If the region begins moving on this multi-faceted agenda now, it might very well be the subject of a future op-ed by a World Bank President!