There are currently over 8.1 million people living in the world today. Over half of these are born female, with nearly one billion being girls under the age of 14.
That means that there are roughly three billion women of working age around the world. And yet a huge proportion—2.4 billion—are not afforded the same economic rights as men. In fact, 178 countries continue to enforce legal barriers that prevent women’s full economic participation. And 95 countries don’t guarantee women equal pay for work.
Of course, this economic disparity is nothing new. Throughout time, women have been second-class citizens when it comes to finance and economics.
In the US, there’s evidence of women campaigning for their financial equality as early as the 1860s, with a call for “Equal Pay for Equal Work”. In the UK, one of the earliest strikes for equal pay was carried out in 1918 by female tram and bus conductors. Their efforts resulted in a settlement of a bonus equal to that of their male colleague’s wages.
But in these countries, as in most, the gender pay gap still persists. That said, in recent decades it has narrowed in the world’s richer countries. This is unfortunately not the case everywhere. Indeed, in many sub-Saharan African and Asian countries, many women have no control over the money they earn, while also lacking the power within their households to contribute to crucial financial decisions.
The Importance of Women’s Economic Empowerment to Society
“No society can advance if the rights of women and girls are not guaranteed.” – M. Rahim Jami, Education Champion and Human Rights Defender
Globally, women earn 24% less than men—a gap that at the current rate of social progression will take 170 years to close. Furthermore, 600 million women have little to no job security. And women around the world do twice as much unpaid care work than men.
The result of this is that around the world, there is a difference of US$172 trillion between men’s and women’s expected lifetime earnings. That’s nearly two times the world’s annual GDP.
The enormity of this difference means it doesn’t only impact women; it has a negative effect on entire societies. Gender gaps cost economies around 15% of their GDPs. Conversely, when measures are taken to better women’s economic conditions, it has a positive effect on the communities and people around them.
Take Latin America as an example. An increase in the number of women in paid work between 2000 and 2010 accounted for roughly a 30% reduction in the overall poverty of the region.
That said, in many countries, women being afforded the same financial rights as their male counterparts won’t automatically mean they can contribute equally to their economy.
How Education Helps Boost Women’s Economic Empowerment
“An important part of the reduction in the gender pay gap in rich countries over the last decades is due to a historical narrowing, and often even reversal of the education gap between men and women.” – Esteban Ortiz-Ospina and Max Roser, Our World in Data
The gender pay gap is a broader concept than that of equal pay for equal work. If we only take into account the amount that men and women earn, it provides no context to the great disparity between their pay.
However, if we look at worker education, experience and occupation, we get an adjusted pay gap. This shows the real level of financial inequality between men and women in any given country.
For example in the UK, the current gender pay gap stands at over 14%. This is because there is a higher number of women in part-time occupations, which traditionally earn less than full-time. But when you look at only full-time employees across the UK, you see that the gender pay gap stands at 7.7%.
The reason for the narrowing of the pay gap in the UK is in part due to education. More women are pursuing careers that require higher qualifications. In fact, they are now 35% more likely to go to university than men. And while many of them still occupy traditionally female roles such as nurse practitioners and social workers, 47% of STEM roles are now filled by women.
Of course, in the UK and many other countries, there is the opportunity for women to pursue the higher education needed to become financially equal. In the UAE for example, women account for 64% of university graduates. Furthermore, the literacy rate of UAE women is 95.8%—compare that to Afghanistan, where it’s only 23%.
This huge gulf comes down to the policies and laws of individual countries. Afghanistan is perhaps an extreme example, as it remains the only country in the world to deny women and girls education. And yet Afghan education activists still fight to provide alternative educational programmes to girls, risking their lives in the process.
How a Country’s Policies Can Affect its Women’s Economic Empowerment
Let’s go back to the fact that there are a higher number of women in part-time occupations in the UK. And let’s also take into account another statistic we mentioned earlier, that twice as many women around the world perform unpaid care work than men.
Regardless of how economically empowering a nation is, the truth is that there remains a gender divide that sees more women as the primary carers for children, as well as sick and ageing relatives. This results in more women unable to pursue full-time jobs or high paying careers.
This sort of gender stereotyping might be in line with a country’s laws and policies. But there’s the flip side, where countries that implement policies to empower women will see figures that are representative of their efforts. In Norway, for example, a country with a gender pay gap of only 4.6%, women perform 57% of unpaid household and care work. While there is still quite a disparity between the sexes, when you compare it to other European countries—the United Kingdom included—the divide is not so great.
It perhaps has something to do with Norway’s policy on childcare. Their expansion of its universal childcare scheme increased the likelihood of mothers’ employment by a massive 32%.
Closer to home, policies have affected women’s financial inclusion and their economic empowerment. In 2020, the UAE passed a law that stipulated women must get paid equally for the same job as men. Furthermore, the country committed to the Sustainable Development Goal of Gender Equality and Women’s Empowerment with the Ministry of Economy strengthening its collaboration with entities that work to economically empower women, and increase their participation in the entrepreneurship sector.
But there’s more to be done. As a business, you can help empower your female employees. And contribute to society and the economy, as well as benefitting your business, too.
How You Can Support Women’s Economic Empowerment—and Benefit Your Business
Research from the International Monetary Fund shows that digital finance is helping to close the gender gap by providing easier access to financial services. This includes access to microlending, helping women avoid loans from un-trustworthy lenders at extortionate rates.
Providing your staff with a digital banking app will mean that they can have access to their own transactional banking account, being in control of their own finances. More than this, partnering with NOW Money can also help educate all your workforce on digital banking and financial literacy through on-site workshops.
This is something that you can do in the short-term, something that’s easy to implement and will streamline your processes too. In the long-term, however, there are policies and practices your company might consider:
- Commit to appointing a number of women in management and leadership roles
- Implement DEI policies and training across every level of your company on the importance of gender equality
- Take a zero-tolerance stance on discrimination against women
- Provide development opportunities for women and a clear pathway for progression.
And when you make these efforts on behalf of your female employees, there are advantages for your business, too. Firstly, companies that implement policies and initiatives to economically empower women have a more positive image. This will resonate with potential and existing employees, boosting engagement and retention, as well as with customers and clients who value your commitment to social development and growth.
But there are also benefits for your bottom line.
- Gender inclusive business cultures lead to a 1% increase in creativity, innovation, and openness.
- Gender inclusive companies have a 9 percent better assessment of consumer demand.
- Companies with the greatest proportion of women on their executive committees earn a 47% higher return on equity than those with no female executives.
Meaning women’s economic empowerment makes good financial sense—for your female employees and your company.
