MENA Women in the EconomyRabat, December 8-9, 2005

Nadereh ChamlouSenior Advisor to the Chief Economist

Economic and Sector WorkThe Middle East and North Africa Region

Definitions

• Millennium Development Goal #3:– Gender Equality and Women’s Empowerment, measured by:

• Educational attainment• Formal labor force participation• Political representation

• Difference between Sex and Gender

• Gender Equality:– Equal access to opportunity– Equal voice – Equal treatment under the law

Why is Gender important?

• Low growth has led to low employment generation – particularly among the young

• Significant evidence that gender inequity and inequality impacts growth

• Gender inequality is the most pervasive type of inequality which cuts across all other categories of inequality – impacts development most deeply

The MENA Paradox:

…increasingly, talent pool equal among sexes

Extensive investment in social indicators…because of shortfall in empowerment

indicators

Women’s formal labor force participation lowest among all regions

Women remain an untapped resource

Actual: predicted ratioActual: predicted ratio

Note: AFR4 = Cameroon, Ghana, Kenya and Senegal. EAP4 = Indonesia, Malaysia, the Philippines and Thailand; EAC2 = Hungary and Poland and LAC4 = Argentina, Brazil, Chile, and Mexico. Bahrain and Kuwait estimates are based on total female participation in the labor force (which includes foreign workers)Source: World Bank staff estimates

Ratio of Actual to Predicted Female Participation in MENA and Selected Countries and Regions, 1980 and 2000Ratio of Actual to Predicted Female Participation in MENA and Selected Countries and Regions, 1980 and 2000

Characteristics of women in the labor market

Female Education and Labor Force Participation in MENA and EAP, 1970-2000Female Education and Labor Force Participation in MENA and EAP, 1970-2000

0

10

20

30

40

50

60

70

80

1970 1980 1990 2000

Female enrollment in secondary school, MENA

Female labor force particpation, MENA

Female enrollment in secondary school, EAP

Female labor force particpation, EAP

Percent

Note: In East Asia and the Pacific (EAP), secondary enrollment is for 1999 rather than 2000Source: ILO 1996; World Bank 2003d, 2003j

Characteristics of women in the labor market

Female Unemployment Rates by Educational Level in MENA Countries, Various YearsFemale Unemployment Rates by Educational Level in MENA Countries, Various Years

Why? Differential Treatment under the Law

• Unequal rights and powers in the private sphere

• Unequal access to public sphere as interaction with state may be mediated through a male kin:

– Centrality of the family– Concept of male breadwinner – Concept of equity rather equality – defined roles– Code of modesty - “Protection” of women’s honor

Gender-based Legal Framework in MENA

• CEDAW (passed by all but Iran, albeit with reservations – mainly in areas relating to inheritance, family law)

• Constitution (guarantees equal rights for all citizens)

• However, ordinary legislation is discriminatory: • Personal Status Code based on Sharia (marriage, divorce,

custody, inheritance)• Civil Status Code based on Western Legal Models (labor,

nationality, pensions, etc)

Example of Differential Treatment

Labor laws and regulations: • Limitations on hours and type of work so as to protect women

• Mobility laws restricting women’s travel within and outside the country

• Social benefits denominated in terms of number of female employees (such as on-sight child-care)

• Permission of husband to work or freedom of movement

These increase the implicit and explicit cost of women employees

The Effect of Differential Sex-based Treatment under the Law

Example: Implicit cost can function like a sex-based minimum wage

A minimum wage is imposed for men. This divides the labor market into two segments.

Employment in the Covered Market with decline --- employment in the Uncovered Market will rise (assuming that men and women are perfect substitutes.)

Upward sloping female labor supply curve raises wages – to minimum wage level.

Results in decline in employment and the use of other factors of production, such as capital and energy. Increase, causing a leftward shift of the demand curve for male labor (form D0 to D1).

Total employment declines.

Source: The Economics of Gender (Joyce Jacobson)

minimum wage

S S

E0 E1

W0

W

D1D0

employmentE1 E0E2

D1 D0

W0

W

employment

wage wage

Men (covered) Women (uncovered)

minimum wage

S S

E0 E1

W0

W

D1D0

employmentE1 E0E2

D1 D0

W0

W

employment

wage wage

Men (covered) Women (uncovered)

Female labor force participation and higher overall employment

Empirical evidence does not support the claim that women’s Empirical evidence does not support the claim that women’s increased labor force participation increases unemploymentincreased labor force participation increases unemployment

• Cost to the economyCost to the economy

– For a subset of countries, GDP could have been For a subset of countries, GDP could have been 2.6% instead of 1.9% with greater female 2.6% instead of 1.9% with greater female participation in labor force. participation in labor force.

– Translates into billions of dollars of lost opportunity Translates into billions of dollars of lost opportunity and development for the region.and development for the region.

Consequences of women’s low economic participation to family and economy

• Cost to the familyCost to the family

– Egypt 25%, Jordan 20%, Morocco 17%Egypt 25%, Jordan 20%, Morocco 17%– Women’s work is increasingly the ticket between Women’s work is increasingly the ticket between

poverty and middle class poverty and middle class – It is also an important source of income for It is also an important source of income for

expenditures on better education and health of next expenditures on better education and health of next generationgeneration

Why gender issues are important for MENA now?

• Need to create 100 million jobs – economies have to be more market oriented

• Well functioning markets depend on a level playing field for all players

• Women constitute a large proportion of the work force – essential for competitiveness

• Women entrepreneurs – essential contributors to innovation and investment

• Gender based discrimination -- invisible brain drain

• Information technology changes meaning of geography, networks, production methods – push for more knowledge content which opens up new opportunities for new players

Agenda for Workshop

• Focus on Women’s Economic Rights and Opportunitiesconsistent with religion, tradition, human

needs

• Three entry points: – Public Policy– Employment– Entrepreneurship

Conclusion• Gender is no for the sake of women but for welfare of society

• MENA countries will undergo vast reforms --focus on economic rights to remove discrimination

• It is important to ensure the engender reform agenda:

– Create level playing field for all

– What is the magnitude of the problem and how does it affect the effects that existing, or persistent, gender inequalities will have on the outcomes and the success of economic policies; and

– the specific actions that are needed to mitigate gender based barriers—the level of resources that are needed and who is best placed to act on them, be it the government, NGOs, and the civil society.