Back to the future: Harnessing women’s capital for new growth in Turkey

For nearly a century, Turkey has broken ground in areas of economic empowerment for women. Historically, the country was among the first nations to ratify laws that empowered women - from suffrage to the civil code. Despite this progress, however, old challenges persist as new ones arise, calling for renewed action. Women’s labor force participation in Turkey still lags that of men by a factor of at least 2:1, a situation that has only been aggravated by the outbreak of the novel coronavirus (COVID-19) and the global uncertainty facing future growth.

With the arrival of International Women’s Day, this call for further action on economic empowerment for women in Turkey could not by timelier. Today, Turkey has an opportunity to build back in a more inclusive way that could propel it toward a new, greener, more digital-centric trajectory as it transitions into a high-income economy. 

The question, of course, is how?

While Turkey’s policy environment aims to promote women’s economic empowerment, gaps remain. In the realm of economic pursuit, the World Bank’s Women, Business and the Law, 2021 shows that Turkey’s gender index hovers close to the the average for the Europe and Central Asia region - 82.5 out of 100, versus the regional average of 84.2. Despite this standing – and generally-favorable legislation in the country, measures in the country continue to lag – especially in areas relating to marriage, pensions, occupational barriers to entry (notably jobs in mining and occupations deemed hazardous), equal pay, and parental leave.  In other cases, the implementation of existing laws relating to flexible work and access to finance lag due to broader blind spots.

Harnessing the potential of women in Turkey means addressing those blind spots related to human, social, and financial capital.  On the human capital side, women’s school-to-work transition appears to lag, despite parity in learning outcomes for K-12 students and a Human Capital Index that is on par with males: 0.66 vs 0.64, respectively. Yet Turkey’s female labor force participation is only 32 percent, less than half that of males. This is also particularly low compared to the OECD average of 44 percent, the Central Europe and the Baltics average of 45 percent, and the average of 40 percent among East Asia and the Pacific and Latin America and the Caribbean. Among inactive women not looking for a job in Turkey, 46 percent have left the labor force due to household reasons, compared to zero percent among men.  

Women have also borne the majority of COVID-19 job losses in Turkey, at nearly 60 percent.  In addition, there is a large gender gap in financial inclusion: 83 percent of men have bank accounts, while just 54 percent of women so – representing a 30-percentage point gender gap compared with the developing country average of 9 percentage points. Women-run businesses may also lack the asset base to access credit – with a whopping 58 percent of a loan require for collateral when the business is managed by a woman, versus just 37 percent when the business is run by a man. 

Push and pull efforts will be needed to reset Turkey’s recovery - pushing frontiers and pulling women in actively.  Positive trends to date can be scaled-up further by both Turkey’s government and civil society. In terms of human capital, unprecedented global economic contraction during COVID-19 on family incomes has increased the risk of school dropouts - particularly for girls. The public national online education platform, EBA, is being enhanced further through the World Bank-supported Turkey Safe Schooling and Online Education Project, designed to expand information technology capacity so that no child is left behind - especially girls, low-income households and non-native Turkish students.

In terms of financial capital, expanding Turkey’s new growth into frontier sectors – such as green and digital industries – depends on casting a viable financial net as widely as possible. The Inclusive Access to Finance Project shows that 42 percent of beneficiary firms are women-led as of 2020, compared to a national estimate of 4 just percent. The initiatives in this project will be expanded further under the newly-launched Formal Employment Creation Project. New mechanisms developed by the Turkish National Employment Agency, ISKUR, with support from the World Bank and the European Union support, have helped improve job placement among women – with 60 percent of the women involved finding jobs after upgrading their skills. 

But pushing the frontier alone on the economic side will not be enough without expanding social capital. Upholding labor legislation that protects women’s workplace rights and creating conducive environments for trusted, reputable, and socially acceptable models of childcare, for example, will help pull more women into the labor force.  Finally, maximizing social outlets for improving awareness at the household level from women’s roles to gender-based violence will prove critical. 

Turkey is ready to usher-in a new era of women’s economic empowerment and new growth; how far it will go depends on just how far its citizens are willing to go – women and men alike.