By Dr. Gyan Pathak
On the current pace of reforms, the world may take between 197 to 430 years to close the global gender gap, which means misallocation of women’s talents and abilities would remain a major issue to the detriment of societies for a long time. The estimate is based on stationarity of the very slow dynamics of narrowing the gender labour force participation (LFP) gaps within 1 per cent of the long-run steady state, and excluding the years 2020 and 2021 to purge the effects of COVID-19 pandemic.
A new IMF working paper prepared by Prepared Alejandro Badel and Rishi Goyal shows that in absence of a significant step up in policy efforts, gender gaps may in fact never close. The new estimates are based on deterministic (linear or log-linear) trends.
For 189 countries, annual data are available since 1991 on the gender LFP gap defined hereafter as the labour force participation rate for men minus the labour force participation rate for women. In1991, the world’s average gap was 26.6 percent, while in 2021, the average gap was 19.5 percent, implying a reduction rate of 1.03 percent per year.
The paper says, if the gap were to continue to fall at the observed rate of 1.03 percent per year, 99 percent of the current gap would be closed in about 445 years. This type of calculation is at the heart of the above-mentioned common approaches regarding the time that it would take the world to achieve gender equality.
Earlier this year, the UN Secretary General stated, “Gender equality is growing more distant. On the current track, UN Women puts it 300 years away…”. Extrapolating the rate of progress from 2006 to 2023, the World Economic Forum (2023) reported that closing global gender gaps in economic participation and opportunity will take 169 years, up from the pre-pandemic period. In a similar vein, based on current legal frameworks and the recent pace of reforms, the World Bank’s 2023 Women, Business, and the Law report estimated a minimum of 50 years for the closing of the gender gap in legal rights.
This paper lends further support to these concerning time-to-equality calculations and to the urgent calls for intentional and systematic policy efforts to close gender gaps. Using a common approach from macroeconomic dynamics to study the evolution of gender gaps in labour force participation across countries, it presents an even more dire interpretation of the data—based on trends over the past three decades, key gender gaps may never close but could perpetually remain elevated for many countries.
Using Markov chains, a common approach in macroeconomics, this paper analyzes the dynamics of the cross-country distribution of the gender gap in labour force participation (LFP). This methodology does not impose strong restrictions on the data, allowing for episodes of progress as well as regress by countries on gender inequality.
Based on the experience of the past three decades, the analysis predicts a further narrowing of gender gaps over time. But the long-run distribution of gender gaps in labour force participation features a substantial share of countries with persistently large gaps, implying that in absence of a strengthened and systematic policy effort, some of the current misallocation of women’s talents and abilities could persist perpetually.
The paper has presented a simple exercise to understand the dynamics of LFP gender gaps implied by the international experience between 1991 and 2021. During some time periods, some countries have increasing gaps over time. If this remains the case, the global gap will not “close”. Instead, gender gaps will narrow but remain quite large for the foreseeable future in absence of a significant step up in policies and measures to prioritize closing the gaps.
Clearly, stronger policy interventions are needed to prioritize and achieve women’s economic empowerment that benefits not just women but societies. The logic of Markov chains teaches us that the interventions should be focused not only on reducing gender gaps but also in maintaining low gaps in countries where more progress has been achieved, as this is the only path to a uniform global closing of the LFP gender gap—or, in other words, sustained utilization and improved allocation of human resources.
The analysis also shows that attention should be paid not only to countries where the gaps are the largest, but also across the distribution including where gaps are narrower and where further progress is also likely to be slowest(based on recent trends, policies, and patterns of shocks).
The results of the analysis are not exclusively caused by increasing gaps in emerging market and developing economies. In the data, the cases of increasing gaps are quite evenly distributed across IMF region and country income categories.
Furthermore, when the paper analyzed the joint dynamics of income and gender gaps, it found that taking development into account leads to slightly larger gaps in the long-run distributions.
These results taken together caution about a deterministic transition toward gender equality along the development path. (IPA Service)
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