Investing in Moldova’s future: Increasing women’s economic inclusion through a care economy

Moldova has made great strides in economic growth and poverty reduction since 2000. GDP per capita increased from 3 percent to 15 percent of the EU average over the 2000-2021 period, and the poverty rate plummeted from 90 percent to below 15 percent.  

Yet, Moldova remains among the poorest countries in Europe. The COVID-19 pandemic, the energy crisis, severe droughts, and the refugee crisis caused by the Russian invasion of Ukraine starkly exposed the vulnerabilities of Moldova’s growth model to shocks and the limits of the current economic model, which is reliant on remittances and consumption growth.

Policies and programs that create an enabling environment for a growth model driven by domestic employment in a productive and competitive private sector could raise incomes to EU average levels in a generation.

Moldova has one of the lowest rates of women joining the labor force in the region    

Bringing more women into Moldova’s workforce will be an essential part of jumpstarting economic productivity. Far more women than men are enrolled in tertiary education (76 percent vs. 53 percent in 2022), yet female labor force participation (LFP) and employment rates consistently lag behind male rates. Although women’s LFP was close to that of men in 2005, it has since dropped to less than 40 percent—a gender gap of 10 percentage points (Figure 1). Moldova’s female unemployment rate is the highest in Eastern Europe.    

Figure 1. Labor force participation in Moldova, age 15+, by sex and year (modeled ILO estimates)

Young women, in particular, face exclusion from labor markets: two-thirds (65.4 percent) of young people between the ages of 15 and 29 who are neither in employment, education or training are female. Women make up only one-third of entrepreneurs in Moldova and less than 18 percent of top managers in private sector firms. Raising women’s employment level to that of men could lift GDP per capita by an average of 20 percent in the long run.

Women’s exclusion from the workforce is driven by gender norms, household responsibilities

The main reason for stubborn gender gaps in economic outcomes is the unequal share of childcare and other household responsibilities that women continue to bear in Moldova, with  few options for affordable, quality care services. Traditional social norms discourage women from aspiring to have careers that persist after marriage and childbirth and from enrolling in fields of study—such as science, technology, engineering, and mathematics (STEM)—associated with higher-paying jobs in economic growth sectors. Care responsibilities also inhibit women entrepreneurs from growing profitable businesses; they work an average of eight hours less per week than men entrepreneurs.  

Enabling gender equality in employment

Women’s economic exclusion persists despite Moldova passing nearly all possible laws to support women in the workplace, the most recent being its introduction in 2023 of criminal penalties for workplace sexual harassment. But reality has not caught up with these laws, and large gender gaps remain.

Fortunately, gender equality has many champions in government as well as civil society in Moldova, and this is increasingly reflected in employment-related programs. Under the World Bank’s Agriculture Governance, Growth and Resilience Investment Project, the Ministry of Agriculture aspires to accelerate investment in women’s economic empowerment and climate-smart agriculture. Recognizing the need to implement conservation agriculture to cope with drought and other climate shocks, the project aims to achieve a minimum 30 percent share of women among its sustainable land management grant beneficiaries. However, the scarcity of childcare options in rural areas may jeopardize this objective.

The Moldova Micro, Small or Medium-sized Enterprise (MSME) Competitiveness Project addresses gender inequalities in access to finance and export businesses by providing technical assistance to female-owned and -managed firms to export goods and services. It ensures that they receive at least 30 percent of credit guarantees and at least 36 percent of matching grants.  

Boosting the care economy

To avail themselves of such opportunities, working women must have sufficient time and freedom from household responsibilities. The Ministry of Labor and Social Protection, which holds the mandate for Moldova’s current gender strategy, is making efforts to test affordable childcare models, including the training of women to provide the services of nannies.

These programs, however, are vastly underfunded and require financial support and technical knowledge from international financial institutions and development partners. Recently, the Moldova Education Quality Improvement Project secured a $5 million Invest in Childcare grant to help the Ministry of Education bolster childcare, with special attention to vulnerable children, including refugee children from Ukraine. This will help families with children over three years of age, but coverage needs to expand, and much more needs to be done to support families with children under age three.

Scaling up investment in the development of a quality care economy will help Moldova nurture its domestic labor market and boost its near and long-term prospects for sustainable economic growth.

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