. Economies around the Latin America and Caribbean region continue to underutilize one major source of talent: Women.
Though in previous years, we celebrated that more women were economically active than before (53% in 2019, vs. 41% in 1990), and gender gaps in economic participation were narrowing, the truth is, we are far from parity (77% for men in 2019). But the situation has worsened even more. The pandemic has really thrown a wrench into the motor; not only slowing down progress but also highlighting how sensitive to shocks women’s economic participation really is.
Data also shows that as time passed and lockdown measures (or compliance) eased, women returned to economic activity at a much lower rate than males.. Men also faced work stoppages, but at a much lower rate (39% and 13%, respectively).
And the gender gaps became even larger in countries such as Peru, Ecuador, Argentina, and El Salvador. A recent study focusing on Peru shows that the gender gaps are largest among women who live in households where children are present.These patterns are common across the region and very worrisome. To start, they translate into huge economic losses; at current rates, the economic loss to the region is equivalent to 14% of GDP per capita. But they also highlight how fickle progress was and how much (and how deep) underlying structural issues—from labor stringent regulations to social norms—continue to limit women’s ability to remain engaged in the economy.
Graphic 1: Percentage of work stoppage, by gender in LAC, over a 3-month period
A complex answer to a complex problem
In a recent presentation of these worrisome statistics we were asked why the impacts of the lockdown and the ongoing recovery were more likely to negatively affect women than men in the region.
Even though the answer is complex, with many dimensions to consider, there are some general principles and (existing and emerging) evidence for why the patterns we are seeing are worse for women than men:
- (e.g. personal care services). They were also more heavily concentrated in sectors of the economy most likely to shut down during lock down (a range of service sub-sectors).
- . And, while schooling is partially or fully shut down, and family members (old and young) require direct care, in general, women in Latin America, more than men, are expected to provide such care. Unfortunately, in the region, more traditional social norms dictate that women bear the heaviest burden of home and care related work.
- The changing nature of work (e.g. automation, process changes, adaptations to be less labor intensive), which was catalyzed by the pandemic and which affects the demand for jobs in many economic sub-sectors (and in occupations) where large segments of women were employed. T where possible or make changes to the way they operate so as to rely less on people.
- Structural underlying features of Latin American economies that make job (re)creation challenging, especially for women. The trifecta of structural factors includes high levels of informality, low-quality jobs, and strict labor regulations. Low quality jobs, especially in terms of wages, affects women more than men because even though people are returning to work, many are returning to jobs that offer less earnings than before. Another structural feature, prevalent in the region is that of strict labor market regulations. They translate into high employment costs and lower incentives to hire new workers.
Our objective with this blog is to explain why it is not a celebration of March 8, and to help with this small input to raise awareness about the reversal of the achievements that we are experiencing. We also hope that our discussion will make it clear that there is an urgent need to act quickly. There is no doubt that the reasons that contribute to keeping women out of the economy, identified here, present great challenges; and these are surely not the only ones in many contexts.
But it is important to emphasize the importance of addressing these challenges to prevent setbacks from becoming permanent and so that our region can benefit, socially and economically, from the contribution of one of its most important assets: women. It is also important to remind readers, especially those working on recovery plans, that any viable economic recovery plan must include women to ensure the sustainability of their efforts. We hope that an inclusive reactivation will give us reasons to celebrate on the March 8th to come.