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Updated On: Sunday, 22 September 2019

As Global Call for Wage Equality Grows, Economics Appears to Support it

Content by: South-South News

23 February 2015, New York, USA | Brendan Pastor – Shortly after best supporting actress winner Patricia Arquette made a passionate appeal for wage equality for women during her 2015 Oscar's acceptance speech, the media and academic community was quick to praise her cause. Social media soon erupted with a flurry of memes and graphics showing inequality between the incomes of men and women – the most common showing that women earn $0.75 to a man's $1.

Unintentionally coinciding with Arquette's activist speech was the launch of a report from the International Monetary Fund which, in its own course of study, found economic wisdom in creating gender equality in the world of work.

"There is ample evidence by now that shows when women participate in greater numbers in the economy there can be significant macroeconomic gains," Kalpana Kochhar, the deputy director of the IMF said accompanying the launch of the report. "For example, our research shows that when women participate at the same rate as men, gains in the U.S. could be about 5 percent of GDP, in Japan up to 9 percent of GDP, in the United Arab Emirates up to 12 percent of GDP, and up to as much as 34 percent in a country like Egypt."

But the gateway to equality is not simply entered by having more women work. The report finds that there are often legal mechanisms in place that make it harder for women to work on parity with men, thus exacerbating inequalities such as in pay.

"In 90 percent of countries there is at least one law that impacts women differentially than men. These could be laws that apply to women's ability to open a bank account, to own property, to inherit property, and, indeed, even to be able to look for a job," Kochhar says.

The IMF argues that in too many countries, excessive legal restrictions conspire against women to be economically active. Already, there are big differences across the globe in female labor force participation. While women make up 40 percent of the global labor force, only 21 percent of women in the Middle East and North Africa work outside the home versus 63 percent in East Asia, the Pacific and sub-Saharan Africa.

The IMF says that other factors also play a role, of course. Demographics, education, and policies that include the provision of child care and maternity leave benefits all help boost female labor participation, but legal rights are fundamental.

Often, this disparity reflects different legal realities facing women.

"We found that when legal barriers are removed, meaning to say when the gap between women's ability to own property, inherit property, and open bank accounts are removed, there can be a powerful effect on the rate at which women choose to participate in the labor force. In fact, we found that the removal of these restrictions can lead to up to a 5 percent increase in female labor force participation rates, and this effect comes on top of closing gender gaps in education, in taxation, and the provision of child care facilities," Kochhar states.

Ultimately, the report calls for an integrated look at the legal framework governing macro and micro economic policy at the national and local levels to remove barriers in place that prevent women from entering the labor force. Additionally, steps should be taken to shore up equality-promotion measures that allow women to earn the same pay as men for the same work.

As Arquette's plea at the Oscars continues to hold true for even advanced economies such as the United States, it's clear to many that the task ahead is even more daunting for developing countries.

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