Keeping Women Out Of The Workforce Is Economic Nonsense

Gender equality is "humanity's biggest project," Lakshmi Puri told the United Nations this past week. Puri, the deputy executive director of U.N. Women, wants to achieve "Planet 50-50" by 2030.

When it comes to the workplace, equal employment opportunities aren't just a benefit to women. Several new studies point out that discriminatory practices that keep women out of the workforce are not only unjust, but economically nonsensical as well.

Women who want to work get a bum deal in many parts of the world. A World Bank study notes that 79 countries have laws that restrict the access of women to their workforces. For example, Russia won't allow women to work in a number of occupations, including loading-machine operators and freight train conductors. And in 15 countries, including Bolivia, Chad and Kuwait, a woman cannot apply for a job without her husband's permission.

Then there are the countries where indirect barriers — such as bans on women driving in Saudi Arabia — keep their labor markets mostly women-free zones.

Perhaps the biggest barrier is that women are usually responsible for unpaid caregiving, says Rachel Nobel, a London-based women's rights policy adviser at ActionAid, an anti-poverty charity. She points out that in many countries, the chores of looking after children, the elderly and the ailing fall to women.

What would happen if things changed?

A new International Monetary Fund report looked at 126 countries and determined that if they closed the gender gaps in their labor markets — that is, if they eliminated all barriers to women in the workforce — they would each see a one-time boost in gross domestic product — the monetary value of the goods and services produced within a country.

The boost could be as high as 34 percent in prosperous Qatar or as low as 1 percent in low-income countries like Liberia, Rwanda and Tanzania.

On average, the IMF predicted, the boost in GDP from closing gender gaps would be 13.5 percent. To put that in context, annual global GDP growth has been around 3 percent over the past few years.

Countries with higher GDPs are considered more prosperous, and when GDP grows, it means the country is becoming wealthier.

Many of the countries that would see the smallest jump in GDP are developing countries. That's because most of them have subsistence economies. And while the countries may not impede the right of women to work, many women work in low-paying, unsafe occupations. Cambodia, for example, would see only a 3 percent jump in GDP. And, as ActionAid's Nobel explains, 80 to 90 percent of female employees in Cambodia are garment workers who toil long hours for low wages.

Nonetheless, a January study by ActionAid determined that women in developing countries would be $9 trillion better off if their salaries and access to paid employment were equal to men's.

And a 2012 International Labor Organization report found that an additional $1.6 trillion in output worldwide could be generated by eliminating sex-based employment gaps.

Charles Kenny, a senior fellow at the Center for Global Development, says that restrictions on work opportunities for women often spring from cultural and religious beliefs. That makes change slow to come. The IMF statistics, he wryly adds, "are not going to instantly turn Saudi Arabia into a haven for gender equality."

But, he says, the report is "one more piece of evidence that removing sex-based barriers to work can unleash impressive economic growth."