Despite progress in recent years, prospects for gender equality are not imminent. The UN Secretary General António Guterres has said that “[g]ender equality is growing more distant. On the current track, UN Women puts it 300 years away”.
Broadly similar views have been shared by the World Bank, the World Economic Forum, and others based on recent trends and policies. Yet, the expectation is that gender equality will be achieved, even if belatedly.
In a recent publication on the gender labour force participation gap (GPG), we argue that the GPG should narrow but may never close, remaining perpetually elevated for many countries (Badel and Goyal 2024).
We also show that development alone will not bring about the needed closure of gender gaps. This means that many women may never have the opportunity to fully use their abilities and talents, to the detriment of societies.
Closing the GPG can benefit women and their families, and improve macroeconomic growth and stability. More women in the labour market means better job-matching and allocation of resources, higher productivity and growth, and job creation. For example, closing the GPG for emerging market and developing economies by just 5.9 percentage points – the rate experienced by the best performing countries during the five years before COVID – would, on average, raise real GDP by about 8 percentage points, as we noted in a recent IMF Blog (Sayeh et al. 2023).
Such progress can help many economies to overcome the scarring from the adverse shocks of recent years.
Closing gender labour force participation gaps could be impossible without stepped-up action
‘Time to gender equality’ calculations have traditionally been based on fitting a deterministic linear trend to the world’s average gender gap and extrapolating the trend into the future. By contrast, we focus on the evolution of the global distribution of the GPG across countries, which we model using Markov chains, a simple mathematical model for dynamic processes. We follow Quah (1993), who employed Markov chains to discuss the convergence of GDP per capita across countries over time.
Why follow the distribution instead of just the average? We explain the gist of our approach next.
The dynamics of gender labour force participation gaps: A 2 by 2 exercise
For simplicity, let us label the GPG of a country as ‘low’ if it is below 10% and high otherwise. In 1991, 24 countries in the world had a low GPG, while 153 countries had a high GPG. Between 1991 and 2021, 17 out of the 24 remained low, while 7 moved toward high GPG. In the same period, 27 of the high-GPG countries moved to low GPG, while the rest remained high. These ‘up and down’ dynamics are the result of policies, institutional settings, shocks, and trends.
The observed dynamics imply a low-to-high probability of transition of 29 percent and a high-to-low probability of transition of 18 percent. These transition probabilities are sufficient to form a ‘Markov chain’, depicted in Figure 1.
Figure 1 Simple Markov chain model
Note: All probabilities expressed in percentage points.
What if countries were to continue moving between high and low GPG over time according to the probabilities we have observed in past data? We can use the Markov chain model to simulate the share of countries with high and low gaps going forward. In this simple example, the share of countries with low GPG would initially grow over time, reaching nearly 20% by 2051. By about 2200, the cross-country GPG distribution would settle down. In the long run, less than 40% of countries would have a ‘low’ GPG.
In other words, the Markovian chain, unlike the linear trend, does not point to a global closing of the gap. If the dynamics of the GPG distribution observed between 1991 and 2021 continued, there would be some narrowing of the global GPG but a sustained or rapid closure appears impossible.
Going beyond
In our publication, we extend the exercise to several more flexible and granular specifications for the Markov chain and find that our message remains robust across all of them. Across specifications, the median GPG across countries lies between 9.3 and 10.8 percentage points. Countries in the top 10% of the GPG distribution have gaps exceeding 16 percentage points. We also consider the joint evolution of GDP and GPG using a bivariate Markov chain, with similar results. On current trends, development alone will not suffice for achieving equality.
The main reason for our result is the existence of reversals or setbacks whereby the GPG increases at times for some countries. For example, the COVID-19 shock affected women more than men in many countries, while they may take longer to recover (Bluedorn et al. 2023). Setbacks occur across regions and country income classifications.
Setbacks prevent the GPG distribution from closing in the Markov chain model. Instead, the GPG remains large for many countries, implying that – absent a strengthened and systematic policy effort – most of the current misallocation of women’s talents and abilities could persist perpetually.
The way forward
Policy efforts are not strong enough to put the gender gap on a decisive path to closure, while risks of setbacks remain elevated owing to shocks, crises, or policy reversals. More needs to be done to tackle barriers that prevent women from fully utilising and deploying their talents and from recovering from setbacks. The following reforms could go a long way to support women’s economic empowerment:
- The removal of legal and institutional barriers can clear professional pathways for women.
- Well-designed tax systems and lending programmes can encourage women to join the labour market or become entrepreneurs (Chiplunkar and Goldberg 2021).
- Better infrastructure, access to water, safe and efficient transportation, and quality and cost-effective childcare can reduce the time spent in household chores, freeing up time for women’s education and work activities while improving children’s life experiences.
- Fiscal policies, as previous IMF analysis shows, can be fine-tuned to benefit the economy, and at the same time, support women.
- Finally, policymakers should develop a better understanding, monitoring, and management of setbacks.
References
Badel, A and R Goyal (2024), “When will global gender gaps close?”, Economics Letters.
Badel, A and R Goyal (2023), “When will Global Gender Gaps Close?”, IMF Working Paper 23/189.
Bluedorn, J, F Caselli, N-J Hansen, I Shibata and M M Tavares (2023), “Gender and employment in the COVID-19 recession: Cross-Country evidence on ‘She-Cessions’”, Labour Economics 81, 102308.
Chiplunkar, G and P K Goldberg (2021), “Aggregate Implications of Barriers to Female Entrepreneurship”, VoxEU.org, 19 April.
Quah, D (1993), “Empirical cross-section dynamics in economic growth”, European Economic Review 37(2-3): 426-434.
Sayeh, A M, A Badel and R Goyal (2023), “Countries That Close Gender Gaps See Substantial Growth Returns”, IMF blog, 27 September.
World Economic Forum (2023), The Global Gender Gap Report 2023.
World Bank (2023), Women, Business, and the Law 2023.
UN Women (2022), Progress on the Sustainable Development Goals: The Gender Snapshot 2022.
