India’s GDP can expand by a whopping 27 per cent if the number of female workers increases to the same level as that of men, International Monetary Fund’s (IMF) chief Christine Lagarde said last Sunday (6).
This is much higher than the positive impact a 50-50 gender parity in workforce can have on the economies of the US and Japan at five per cent and nine per cent respectively, she added.
Speaking in Ankara, Turkey, at the launch of W20, a grouping of women leaders from the world’s 20 largest economies including India, Lagarde said that “it is an absolute economic no-brainer” that empowering women boosts economic growth.
“For example, we have estimates that, if the number of female workers were to increase to the same level as the number of men, GDP in the United States would expand by five per cent, by nine per cent in Japan, and by 27 per cent in India,” Lagarde said in a keynote speech.
“These estimates, while of course tentative, are significant and large enough to be taken seriously. This applies particularly to countries where potential growth is declining as the population is ageing,” she added.
Lagarde said that men have a key role to play in the empowerment of women and quoted Indian-origin Nobel laureate Amartya Sen as saying, “Women are increasingly seen, by men as well as women, as active agents of change—the dynamic promoters of social transformations that can alter the lives of both women and men.”
Referring to the G20 pledge of November 2014 to reduce the gap in women’s labour force participation by 25 per cent by 2025, Lagarde said this would have the benefit of creating an estimated 100 million new jobs for the global economy.
“That was The Promise of 2025. Today, I want to focus on how to deliver on that promise… By the latest estimate, there are more than three and-a-half billion reasons why gender equity matters,” she said, adding that women’s empowerment was not just a fundamentally moral cause, it was also an absolute economic no-brainer.
Lagarde called for collective action to ensure that gender equality goals of 2025 are achieved and said IMF has also enhanced its focus on macroeconomic effects of gender gaps.
“This has included new research, for example, on women’s role in the economy and legal barriers to female participation. Perhaps even more importantly, we are now looking to apply this research in our policy advice to our member countries,” she said.
Lagarde said the role that women play in family life also comes in the way of gender equality in the workplace and suggested measures like paid parental leave, including paternity leave, as well as affordable and high-quality childcare facilities.
“This raises a salient point: men – not only as partners, but also as fathers, sons, and brothers - have an important stake in empowering women. Not only does this help their partners, daughters, mothers and sisters to achieve their potential, it also helps build a stronger society for all,” she said.
“Policymakers and employers can work hand-in-hand to provide affordable and high-quality childcare. Tax reform can also help. In too many countries, the tax system discourages secondary earners – who are often women – from working. Replacing family taxation with individual taxation can reduce marginal taxes on these secondary earners, thereby encouraging women to work.
“This package of parental leave, childcare, and a fairer tax system can enable women to combine a job with a family. Along with investing in girls’ education and easing women’s entry into the labour market, it also supports women’s economic empowerment,” she added.