Editor's Note: Jennifer Yip is a consultant for the World Bank Group's Doing Business team.
At an age when mothers admonish their children to finish their brussels sprouts, my mother issued warnings about the importance of getting a PhD if I wanted to gain the respect of my future husband. Those warnings were followed by the oft-repeated reminder that I should "marry well, so you don’t have to work if you don’t want to."
Twenty years and a couple of degrees later I’ve often wondered how those two pieces of advice go together. What is the point of getting an advanced degree if I eventually decide not to work?
In an address to the Muslim world from Cairo University in Egypt, President Barack Obama argued that denying a woman education is denying her of equality. Expressing sentiments in line with the World Bank’s Doing Business gender initiative, he observed, "it is no coincidence that countries where women are well educated are far more likely to be prosperous." Investing in women is, as our catch phrase at the Bank goes, "smart economics."
Obama did add one nuance—ultimately, work must be a woman’s choice and her choice to work or remain in a more traditional role must be respected. My mother would agree. His two proposed solutions? Broaden women’s choices by improving access to education and to microfinance.
It is a commendable step towards equality to expand a woman’s ability to choose by furnishing her with an education and access to credit. However, because her decisions in many societies may be unfairly constrained by unequal business laws and inadequate social and welfare services, this is not enough. To further bridge the gender gap in economic participation, we must identify and reform the institutions and laws that render women particularly vulnerable, creating disincentives that can be just as powerful as outright discrimination. If educated women are choosing not to work, it may not always be because they’ve married well.
As Professor Shibley Telhami of the University of Maryland noted on NPR’s Morning Edition, people in the Arab world are increasingly open to women in universities. In fact, many universities in the region have more female than male students. But Telhami says these countries’ economic and political structures create disincentives for women to join the workplace after their education.
For instance, married women may not work at all because of punitive tax rates. Virginia Postrel, a columnist on economics for the New York Times, finds that there is a strong correlation between tax rates and the decision of the family’s second income earner, who is more likely to be a woman. Because of the "marriage penalty," secondary earners in American families with high household incomes pay an average of 50 cents in taxes for every dollar they earn—which affects their decision to work or stay home.
To document laws that affect a woman’s economic participation, including tax laws that affect second income earners, the World Bank’s Doing Business Gender team has devised a gender scorecard that will be published this September. The scorecard will provide answers to questions about a woman’s ability to do business in 181 economies. Taking a closer look at these regulations is essential to understanding the incentives and disincentives that women face as they decide whether or not to enter the workforce or start their own businesses.
The personal income tax section will cover gender differentiated credits and deductions, tax liabilities for working couples who file jointly, as well as differences in tax calculations for non-wage income. Other scorecard questions will examine a woman’s property and inheritance rights, her ability to get credit and enforce contracts, and gender specific industry and working time prohibitions. Scoring a large number of countries gives us the ability to compare across countries or regions to isolate the most important variables—or cluster of variables—that affect both a woman’s capacity to start a business and work, as well as her motivation to do either.
Join the Conversation