Indonesia’s economy is changing, opening more and better opportunities for women. However, compared to countries at similar income levels, Indonesia’s women are slightly less likely to be participating in the economy.
The fact that more women are not working in Indonesia is especially puzzling given progress in the educational attainment and declines infertility. In terms of test scores, girls today are on par or outpacing boys at every level of education through tertiary education. However, this is not translating into more and better jobs for women. And despite declines in fertility rates, most women drop out of the labor market after marriage. Many of those who drop out, do not return.
. For example, if Indonesia could increase female labor force participation by just 25 percent by 2025, it could generate an additional $62 billion in economic activity and boost GDP by 2.9 percent.
The COVID-19 pandemic has hit women particularly hard. Many women in Indonesia, and globally, are employed in vulnerable sectors, such as in retail, hospitality, or the garment sector, which has seen significant job losses and reduced hours since the start of the pandemic. Even more women are informal workers, where the impacts are difficult to capture, and access to social support systems is limited.
Further, women are often the last to see economic opportunities return. After the Asian Financial Crisis, women’s unemployment remained several percentage points above men’s unemployment rates for nearly a decade. A World Bank assessment after the Sulawesi earthquake showed that, as jobs returned, most went first to men. If economic recovery programs are gender blind, they might leave women even further behind.
So what can be done?
Harnessing the power of women and enhancing their economic participation would be smart economic policy for recovery. An emphasis on skills and job creation that taps the country’s female labor force would not only support greater short-term growth, it would also ensure investments in human capital are fully realized. This could focus on the following areas.
First,For instance, the wage gap for women in the formal sector is 30 percent, and is up to 50 percent in the informal sector, with much of the differences attributed to discriminatory practices. Closing gender gaps such as these can help to retain women in the labor force, improve productivity and accelerate economic growth.
Second,Recent analysis done by the World Bank in Indonesia shows that an additional public preschool per 1,000 children raises the employment of mothers by 13 percent. Giving more mothers better access to childcare they can trust is thus a good policy choice for Indonesia. It will also have additional positive benefits for child welfare and development so this is a win-win solution.
Lastly, Indonesia already boasts a vibrant network of women entrepreneurs. Despite making up a large and growing share of the self-employed in Indonesia, women continue to operate smaller and less productive enterprises than men. However that doesn’t need to be the case.
Indonesia has many strong women in leadership positions, and the country is on the right track as it continues to acknowledge and accept the crucial roles that women play in developing the nation so far.
This article has been published as opinion piece in Kompas, March 8, 2021