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Matching Equality: How can we empower women within the economy


The OECD defines economic empowerment as one's ability to contribute and to have equal opportunity to excel within an economy. (OECD, 2018) Unfortunately, when looking at labour force participation rates between men and women, it is found that there are still massive discrepancies between the two genders both globally and in the UK. (ILO, 2022a) Yet, labour force participation rates of women have grown, (ILO, 2022b) and, while that is true, the growth in labour force participation of women is slowing down (Ortiz-Ospina, Tzvetkova and Roser, 2018)


Yet, women have seen significant economic empowerment in recent years especially in developed economies. Women are seeing higher education enrollment rates globally than ever before, alongside this, although gender specialisation does exist, women are more likely to enter STEM fields. (Francesconi and Parey, 2018a) As such, accessing higher quality education has enabled women to have more career opportunities, yielding economic empowerment as female graduates have higher labour force participation (International Labour Organization, 2017a) and benefit from higher pay due to a closing gender pay gap.


However, although men and women perform similarly in education, (Francesconi and Parey, 2018b) there is still a gap in earnings as when looking at earnings into the future, women who graduate from University earn less than men, (Collinson, 2019) and have lower chances of promotion. (Spiggle, 2021) This is mainly attributed to the fact that women, traditionally, have the role of bearing children, and doing so either significantly reduces the labour force participation of women, or, forces women into lower-skilled careers, (International Labour Organization, 2017b) explaining the differences in pay. This ILO study also shows that women see lower motivation as being frequently away from work reduces chances of promotion and economic success (International Labour Organization, 2017c) - in other words, although women take time off work to raise their children, their understanding of the opportunity cost makes them less motivated, and, less economically empowered due to having fewer opportunities for personal and career growth in future.


Identifying an opportunity cost between child-bearing and economic empowerment means that there is now a problem that can be addressed. As such, policymakers need to lessen this opportunity cost by making childcare more affordable. The ILO states that lack of affordable childcare reduces labour force participation by 4% in developed nations. (International Labour Organization, 2017d) This is because access to cheaper childcare decreases the opportunity cost of hiring nannies or nurses, meaning that parents, especially mothers, will find themselves more willing to work and participate in the labour force as retaining employment means that they can use their earnings to cover the now cheaper childcare service. At the same time, retaining employment yields a higher disposable income as well as better future career prospects and promotion - the main concern that women had with bearing children. (OECD, 2012b)


Consequently, because both parties benefit, (the childcare providers receive a wage and women see higher levels of disposable income and better career prospects) cheaper childcare services through subsidies is the main way that women can be empowered within the UK economy. In fact, the benefits of doing so also extrapolate to the wider economy as an increase in labour force participation rates of women in all regions can yield global GDP growth of 12%. (OECD, 2012a) Yet, despite the benefits of subsidised childcare services, the UK has one of the highest childcare costs in the world, (Topping, 2021) as opposed to Norway, which has the smallest gap between gender employment rates (Statista, 2021) as the Norwegian government spends $30,000 per child on early childhood care. (Miller, 2021)


This brings another issue with opportunity cost, with government debt being at record highs, (TRADINGECONOMICS, 2021) it is hard to imagine how to allocate more funding to make childcare services more available despite their benefits. This means a good first step would be to extend maternity and paternity leave to levels comparable to Norway as such a policy will not be cumbersome on public finances. (Barrett, 2021) Despite this, the UK’s nursing shortage within the NHS (Ungoed-Thomas, 2021) makes state-backed child care even more difficult as it is likely that the effects of Brexit will mean that these vacancies are filled at a much slower rate. (Royal College of Nursing, 2020) Yet, although this program may not be possible to implement now, it is logical to start small trials within the UK to test effectiveness without over-encumbering the NHS and the government’s budget. With regards to the nursing shortage, similarly to how the UK government has subsidised the migration of Hong Kong citizens to the UK, (Easton and May, 2021) the government can implement a similar scheme to attract medical professionals from overseas by decreasing the risks of migration by guaranteeing these individuals a position within the NHS paired with housing subsidies. (Duflo and Banerjee, 2019, pp.60–61) Although costly, such policies would effectively fill the nursing vacancies and allow the NHS to branch into childcare services in the long run. If empowering women is truly the objective, then the fiscal costs of such policies is a logical tradeoff for the potential economic benefits, not only for the individual but for the entire UK economy.

 

References

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Collinson, P. (2019). Women paid £260,000 less than men over their careers – report. [online] the Guardian. Available at: https://www.theguardian.com/world/2019/oct/28/women-paid-less-than-men-over-careers-gender-pay-gap-report

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