Gender equality key to overcoming economic scarring: IMF

September 28, 2023 (MLN): Despite the passage of three decades, the global gender gap has not seen any significant change, with just 47% of women participating in today's labor markets—a figure significantly lower than the 72% of men who are actively engaged.

This alarming concern was highlighted by Antoinette Monsio Sayeh, Deputy Managing Director of the IMF in her latest blog.

With global growth predicted to languish at just 3% over the next five years and with traditional growth engines sputtering, many economies are missing out by not tapping women’s potential, she noted.

Sayeh cited IMF estimates that emerging and developing economies could boost their gross domestic product (GDP) by about 8% over the next few years by raising the rate of female labor force participation by 5.9%.

She said that this would more than offset the economic “scarring” caused by the pandemic.

However, Sayeh warned that gender gaps are unlikely to ever close if present policy trends persist. IMF's analysis of three decades of data shows that countries have made progress in increasing women’s participation, but they have also faced setbacks due to shocks, crises, and policy reversals.

The pandemic, for example, eroded progress closing gender gaps, especially for women with young children. Setbacks like this cause scarring that slows and often reverses progress toward gender equality.

As a result, gender gaps in labor force participation will narrow but never close if countries continue on their present policy path.

Gaps would remain large for most countries, exceeding 16% in one out of ten countries.

She urged that countries must step up efforts to break down barriers to women’s participation in the labor market—such as limited access to education, health, assets, finance, land, legal rights, and care services.

They should systematically take account of how macroeconomic, structural, and financial policy packages impact women. The IMF’s gender strategy aims to assist member countries in these efforts.

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