Women’s Labour Force Participation, Economic Growth and Gender Equality

Area of Scanning: Social System

Author: Rhiannen Putt

What is Changing?

The degree of participation by women in the formal labour force will impact economic growth and gender equality in Asia over the next 10—15 years. While many Asian countries have seen rapid economic growth and increases in education for girls and women, counter intuitively, women’s participation in the labour force has stagnated or declined in some countries. For example, India’s overall female labour force participation rate has dropped eight percentage points in five years, down to 29%. In urban India it is even lower, having remained at close to 18% since the 1980s. In Japan, female labour force participation has hovered near 49% for the last seven years, with the gender gap in labour force participation rates at 25 percentage points. This gap compares to a difference of just over 10 percentage points on average in the major advanced economies and only 6 points in Sweden.

Low or stagnating female labour force participation rates in parts of Asia are likely due to a complex mix of factors. These include structural changes in the economy, and socio-cultural norms that reinforce gender roles and perpetuate discrimination against girls and women. 

Implications

If current trends persist, women will continue to lack access to, or may remove themselves from, the formal workforce in parts of Asia. Rather than acting as a potential driver, female labour force participation rates, if low, will act as a drag on economic growth, particularly when coupled with the demographic changes happening in the region. If working-age women do not join the labour force in adequate numbers, there could be potential skill shortages and an accelerated drop in economic output in countries where the labour force is forecast to shrink due to an aging population (e.g. Japan, South Korea). In places with a young population such as India, limited female labour force participation would reduce the benefits of the much-anticipated demographic dividend (the advantageous structure of a population with few dependents relative to working-age people). According to some, this seriously calls in to question the sustainability of India’s high growth.   

Persisting low female labour participation rates could also further entrench the gender power imbalance and slow gains in women’s empowerment.  This in turn would reduce progress against poverty, and improvements in women’s human rights, health and child development – all elements that are linked to increases in the status of women.   

 

View all areas of scanning

Sources