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By Christine Lagarde
Managing Director, International Monetary Fund

Women often face more restrictive collateral requirements, shorter maturity of loans, and higher interest rates than men.Removing discriminatory laws on property and inheritance rights can be a first step in addressing these challenges.

Gender parity is an important.but elusive goal. Globally, only about 55 percent of women are in the labor force, and gaps in labor force participation between men and women reach from about12 percent in sub-Saharan Africa to 55 percent in the Middle East and North Africa.
In November 2014, the G20governments pledged to reduce this gap by 25 percent by 2025,which could create up to 100 million new jobs for the global economy.This has had some notable effects over the past year: many countries are accelerating reforms, the private sector is showing support, and policy actions are showing visible results.We at the IMF have been strongly supportive of these efforts. We have examined key constraints to gender equality in many of our member countries and provided policy advice to our member countries on their removal.As an organization whose primary mandate is to support macro economic stability and sustainable growth,we have good reasons for doing so:
• Gender gaps in economic participation restrict the pool of talent in the labor market and yield a less efficient allocation of resources. This lowers productivity and GDP growth.
• More women in the work force can mitigate the adverse effects of demographic change. Think of Japan,increasingly feeling the pinch from rapid population aging. This could be mitigated by more women joining labor force – now a key pillar under“Abenomics”.
• Gender equality goes hand in hand with better development outcomes. Women tend to invest a larger proportion of their household income into their children’s education.
• Gender inequality is strongly associated with income inequality –itself a drag on sustainable growth.The incentives for action could therefore not be stronger. Here is what can be done:
Let girls and boys grow up with the same opportunities. In too many countries, gender gaps in education persist. Governments should both increase spending on education and improve its effectiveness—which has been our advice to countries such as Costa Rica, India, or Pakistan. Any public cash transfers that are being provided to households can be made conditional on sending daughters to school. And fixing poor infrastructure and transportation makes it easier especially for girls to attend school.
Bring down barriers to economic activity. While legal restrictions on women’s economic activity have been receding, analysis by the World Bank shows that about 90 percent of all countries still have at least one legal obstacle on the books. Having equal rights increases women’s bargaining power in the household and incentivizes parents to send their daughters to school. It would also help address constraints to finance: Women often face more restrictive collateral requirements,shorter maturity of loans, and higher interest rates than men. Removing discriminatory laws on property and inheritance rights can be a first step in addressing these challenges.
Eliminate impediments that force a choice between work and family. Some barriers women face in the labor market relate to personal and societal attitudes towards working women and their role in family. These need time to change,and policies cannot influence them easily. However, IMF research shows that compared to societal attitudes, fiscal and other policies account for a higher share of changes in female employment rates.For example, greater parity between paternity and maternity leave supports a more rapid return to work among mothers and shift underlying gender norms. Access to affordable, high-quality child care frees up women’s time for employment. And replacing family-based taxation with individual taxation would reduce the tax burden on secondary earners (mostly women), thus increasing incentives to join the labor market.
Mitigate the fear of retirement. Higher participation rates, smaller wage gaps,and pension systems which take into account women’s absence from the labor market due to childcare, would increase women’s income at retirement.This is critical to mitigate the risk of old age poverty. Given the demographic structures in many G20 countries,we also need to think about expanding care for elderly men and women.The time to work together on the G20’spledge is now. Leveling the playing field at every step of the game will not only make a historic change for women, it will help the global economy to achieve more sustainable and inclusive growth.


Cuberes, David, and Marc Teignier, 2015, “Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate.”: Journal of Human Capital, forthcoming. Christiansen, L., H. Lin, J. Pereira, P. Topolova, R. Turk, and P. Koeva Brooks. 2016. “Unlocking Female Employment Potential in Europe. Drivers and Benefits.” European Department and Strategy, Policy, and Review Department.International Monetary Fund, Washington. Loko, B., and Mame A. Diouf, 2009, “Revisiting the Determinants of Productivity Growth: What’s New?” IMF Working Paper 09/225 (Washington). Gonzales, C., S. Jain-Chandra, K. Kochhar, and M. Newiak. 2015a. “Fair Play: More Equal Laws Boost Female Labor Force Participation.” IMF Sta Discussion Note 15/02, International Monetary Fund, Washington.Gonzales, C., S. Jain-Chandra, K. Kochhar, M. Newiak, andT. Zeinullayev. 2015b. “Catalyst for Change: Empowering Women and Tackling Income Inequality.” IMF Sta Discussion Note 15/20, International Monetary Fund, Washington IMF 2015. Regional Economic Outlook: Sub-Saharan Africa.April 2015, International Monetary Fund, Washington.Ostry, J., A. Berg, and C. Tsangarides. 2014. “Redistribution,Inequality, and Growth.” IMF Sta Discussion Note 14/02,International Monetary Fund, Washington.World Bank. 2015. “Women, Business and the Law 2016.Getting to Equal,” World Bank/International Finance Corporation, Washington.

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