A GUIDE TO WOMENOMICS

A

In rich countries, girls now do better at school than boys, more women are getting university degrees than men arc, and females arc filling most new jobs. Arguably, women are now the most powerful engine of global growth. In 1950, only one third of American women of working age had a paid job. Today two thirds do, and women make up almost half of America’s workforce. Since 1950, men’s employment rate has slid by 12 percentage points, to 77%. In fact, almost everywhere more women are employed and the percentage of men with jobs has fallen – although in some countries, the feminisation of the workplace still has far to go: in Italy and Japan, women’s share of jobs is still 40% or less.

B

The increase in female employment in developed countries has been aided by a big shift in the type of jobs on offer. Manufacturing work, traditionally a male preserve, has declined, while jobs in services have expanded. This has reduced the demand for manual labour and put the sexes on a more equal footing. In the developing world, too, more women now have paid jobs. In the emerging East Asian economics, forever)’ 100 men in the labour force there are now 83 women, higher even than the average in OECD countries. Women have been particularly important to the success of Asia’s export industries, typically accounting for 60- 80% of jobs in many export sectors, such as textiles and clothing.

C

Of course, it is misleading to talk of women’s “entry” into the workforce. Besides formal employment, women have always worked in the home, looking after children, cleaning or cooking, but because this is unpaid, it is not counted in the official statistics. To some extent, the increase in female paid employment has meant fewer hours of unpaid housework. However, the value of housework has fallen by much less than the time spent on it, because of the increased productivity afforded by dishwashers, washing machines and so forth. Paid nannies and cleaners employed by working women now also do some work that used to belong in the non-market economy.

D

The increase in female employment has also accounted for a big chunk of global growth in recent decades. GDP growth can come from three sources: employing more people; using more capital per worker, or an increase in the productivity of labour and capital due to new technology’. Since 1970, women have filled two new jobs for every’ one taken by a man. Back-of-the-envelope calculations suggest that the employment of extra women has not only added more to GDP than new jobs for men but has also chipped in more than either capital investment or increased productivity. Carve up the world’s economic growth a different way and another surprising conclusion emerges: over the past decade or so, the increased employment of women in developed economies has contributed much more to global growth. Women are becoming more important in the global marketplace not just as workers, but also as consumers, entrepreneurs, managers and investors. Women have traditionally done most of the household shopping, but now they have more money of their own to spend. Surveys suggest that women make perhaps 80% of consumers’ buying decisions – from health care and homes to furniture and food.

E

Women’s share of the workforce has a limit. In America it has already stalled. However, there will still be a lot of scope for women to become more productive as they make better use of their qualifications. At school, girls consistently get better grades and in most developed countries, well over half of all university degrees are now being awarded to women. In America 140 women enrol in higher education each year for every 100 men; in Sweden the number is as high as 150. (There are, however, only 90 female Japanese students for every 100 males.) In years to come, better educated women will take more of the top jobs. At present, for example, in Britain more women than men train as doctors and lawyers, but relatively few arc leading surgeons or partners in law firms. The main reason why women still get paid less on average than men is not that they are paid less for the same occupations, such as nursing and teaching. This pattern is likely to change.

F

Making better use of women’s skills is not just a matter of fairness. Plenty of studies suggest that it is good for business, too. Women account for only 7% of directors on the worlds corporate boards – 15% in America, but less than 1% in Japan. Yet a study by Catalyst, a consultancy, found that American companies with more women in senior management jobs earned a higher return on equity than those with fewer women at the top. This might be because mixed teams of men and women are better than single-sex groups at solving problems and spotting external threats. Studies have also suggested that women are often better than men at building teams and communicating.

G

In poor countries too, the underutilisation of women stunts economic growth. A study last year by the World Economic Forum found a clear correlation between sex equality (measured by economic participation, education, health and political empowerment) and GDP per head. Correlation does not prove the direction of causation. However, other studies also suggest that inequality between the sexes harms long-term growth. In particular, there is strong evidence that educating girls boosts prosperity. It is probably the single best investment that can be made in the developing world. Not only are better educated women more productive, but they raise healthier, better educated children. There is huge potential to raise income per head in developing countries, where fewer girls go to school than boys. More than two thirds of the world’s illiterate adults are women.

H

It is sometimes argued that it is short-sighted to get more women into paid employment. The more women go out to work, it is said, the fewer children there will be and the lower growth will be in the long run. Yet the facts suggest otherwise. Data shows that countries with high female labour participation rates, such as Sweden, tend to have the decline in fertility has been greatest in several countries where female employment is low.