Why the gender gap hurts Asia’s long-term growth potential

Published on Tuesday, 28 April 2015

Published by Cyn-Young Park on Tuesday, 28 April 2015

A seamstress at a small garment factory in Dhaka, Bangladesh.
A seamstress at a small garment factory in Dhaka, Bangladesh.

Women in Asia are on average 70% less likely than men to be employed, a gender gap that persists despite booming economic growth, decreasing fertility rates and increasing access to education in the region, according to a new ADB report entitled Women in the Workforce: An Unmet Potential in Asia and the Pacific,

Past studies indicate that gender equality promotes productivity and economic growth not only for the present but also for the future. There is also very clear empirical evidence that better educated mothers are able to provide their children with better nutrition, longer years of schooling, and enhanced opportunities for academic achievement. Building on these stylized facts and using recent models of life cycles and time allocation, a new simulation model is constructed to capture a clear sense of the inefficient allocation of resources in the economy and the resulting economic cost, due to the existence of gender bias in child education at home and discrimination in the labor market. Results suggest closing the gender gap could generate a 30% increase in per capita income for a hypothetical average Asian economy in one generation, and a 71% increase in two generations.

Enormous advances have been made in closing the education and health gaps between women and men in the region, but female participation in the labor force is still lagging behind. Women continue to face a labor market that offers them lower wages and lower quality jobs than their male counterparts. The channels of gender inequality are so complex that policy interventions must go beyond economics to effectively address them, and the report also notes that disparity in job quality and wages between men and women is influenced by how women allocate their time between domestic activities and participation in the labor force.

Despite substantial increases in education levels relative to men, women are often perceived to have lower skills for the labor market. Women in some countries in the region are also constrained by social norms that emphasize domestic work as their primary responsibility. A multidimensional approach to reducing gender inequality is thus needed to unleash a nation’s full potential for inclusive growth and development.

The report urges effective policy interventions where the current system is perpetuating a large and possibly widening gender gap. Recommended policies for any given country will depend on the nature and severity of its gender gap problem, but it is important that those policies should address—perhaps in different degrees—many issues that cut across cultures and income. For example, governments should consider reducing barriers to international trade and making job information readily available to both men and women; adopting more flexible and family-friendly workplace policies that allow equitable and efficient distribution of time among household members; and boosting the security and protection of working women.

Finally, it also recommends providing women with appropriate transportation alternatives to the workplace, giving them more access to credit and property, and offering specific skills training programs to ensure more women are seen and heard in traditionally male-dominated jobs.

What other policy interventions do you think could help close the gender gap in Asia’s labor market? Leave a comment below and join the discussion.