The Key of Growth: Employ More Women

Christine Lagarde, Managing Director of the IMF, highlights the importance of gender-balance. As a good practice she mentioned the Canadian cabinet, who demonstrated the government’s clear commitment to gender equality in 2015. But there is another important reason for promoting greater female participation in the workforce: women in jobs are good for growth

IMF studies have shown significant macroeconomic gains when women are able to participate more fully in the labor market. If the current gap of 7 percentage points between male and female labor force participation were eliminated, the level of real GDP could be about 4½ percent higher today.

Since the global financial crisis, countries around the world have been trying to grow their economies more quickly, while an aging population is shrinking its labor force.

Canada’s rapid progress in female labor participation was no accident; it reflects deliberate and targeted policy measures including tax reforms and family-support policies.

Only 60 percent of Canadian women were in the labor market in 1980’s. Four decades later, Canada’s female labor participation rate is over 80 percent, comparing favorably with most advanced economies of Nordics, and the United States, where the rate has actually fallen since the mid-1990s to about 74 percent.

Despite these progress “invisible glass ceiling” could discourage younger generations of women to pursue professional careers. Bold decisions are needed to change corporate cultures and shift social norms—for example, by providing incentives for women’s representation on corporate boards or reforming the current parental leave system so that more fathers are willing to take leave

Source: IMF