This article is part two of a series on gender equality and climate change. You can find part one here and part three here.

Women account for 47.7% of the global workforce and produce between 60 and 80% of the food yet earn only 35% of the income and own less than 20% of the land. While it is widely acknowledged that achieving gender equality is integral to development and the reduction of poverty, significant gender disparities persist in the context of economic opportunities. Women’s economic empowerment is a goal in the objective of achieving gender equality but is also a key factor in reaching sustainable development.

We work with industry experts, impact-driven investors as well and academia on pressing global issues. With our articles and trilogies, we want to share the key insights we gain in the process with our network. This is the second article in our Gender Trilogy that explores women’s economic empowerment as a driving force to sustainable development.

Women’s economic empowerment and sustainable development 

Women’s economic empowerment implies their ability to actively participate in economic activities and decision-making processes, as well as to manage their economic resources. Economic empowerment for women can take the form of gaining access to resources and opportunities such as employment, financial services, education, training programs, and property as well as the removal of legal and social constraints that hinder them from fully engaging in economic activities.

Empowering women economically is a key target of SDG 5. Maria João Pereira Coelho, a Gender-Audit Facilitator by the ITCILO told us “We know that women spend more money on housing, health, and education than men so when they are economically empowered and, for example, have increased access to credit and other financial services, this can have a direct impact on development outcomes such as greater access to education, health and income generating opportunities.” This in turn contributes to decreased poverty and leads to healthier and more educated children in immediate families and local communities. About 30% of the entire decline in poverty and income inequality that was observed in Latin America between 2000 and 2010 was attributed to an increase in the proportion of women in paid work.

Barriers and challenges

The most common obstacle to women’s economic empowerment is the gender pay gap, as women are consistently paid less than men for the same work. In numbers, this gap amounts to 23%, where women only earn 77% of what men earn. A direct consequence of these disparities is the increased likelihood for women to experience financial instability, struggling with debt, and limited opportunities to save for the future. Gender pay gaps can also have implications on women’s ability to access healthcare, education, and housing.

Another critical challenge relates to unpaid care work and work in the informal sector. Globally, more than 75% of all unpaid care labor is performed by girls and women and 42% of women face difficulties finding employment due to caregiving responsibilities. Women employed in the informal sector represent 95% of women in South Asia and 89% in Sub-Saharan Africa. Dr. Nadine Puechguirbal, former senior gender advisor for the United Nations stated “Unpaid care work can overwhelm women and limit their abilities to access education and to participate in the formal labor market. Furthermore, a considerable proportion of women, particularly in southern regions, work in the informal sector, where they have unstable working conditions, with little social safety and legal protection.”

Moreover, technological progress and transformations can further increase gender inequalities. The digital gender gap, specifically in access to the internet, is most significant in less developed countries, with a significant gap of 32.9%. Basma Gaber Wennholz, a Senior Urban Specialist who worked for the World Bank specified “Women face challenges accessing the job market due to digital illiteracy and a lack of digital access, preventing their participation in the modern workforce. Digital access can empower women economically, enabling their participation in the job force relying heavily on computer literacy, but it also allows access for women entrepreneurs to create online platforms for their business.” 

Other legal factors can limit women’s economic opportunities; among 189 economies evaluated in 2018, 104 still have laws prohibiting women from holding certain jobs, 59 economies have no laws against sexual harassment in the workplace, and 18 allow husbands to legally forbid their wives from working. 

In addition to social, legal, and financial barriers hindering many girls and women from accessing education, they face specific challenges such as early pregnancy, inadequate sanitation or safety measures, or the prospect that they should contribute to domestic work, which impedes their learning experience. Only 49% of countries have reached gender parity in primary education, and this gap widens incrementally for higher levels of education. As a result, women are less likely to attain secondary and higher education, as well as training, and are not equipped with the right skills and capabilities to have equal career opportunities as men in the labor market. 

Nevertheless, the relationship between women’s education and their employment can be complex. For instance, considerable increases in female enrolment and completion in education in Sri Lanka have not resulted in improved labor market outcomes but rather in low and static female labor participation. Consequently, education may lead to higher economic activity but is not always followed by better employment prospects and appropriate work quality, especially in developing countries.

Why these barriers exist and how to overcome them 

Women’s economic empowerment largely depends on the adjustment, approval, and enforcement of legislation mandating equal rights and opportunities for men and women. This includes putting policies and programs in place to promote work-life balance for men and women, gender-based budgeting to better allocate resources required for women’s economic empowerment and improving women’s access to productive assets.

Most difficulties encountered by women in the workplace are brought on by societal gender norms and attitudes, which are frequently ingrained in both informal and formal labor market activities. These cultural beliefs, assumptions, and unconscious biases continue to influence women’s participation and opportunities in the labor market. A cultural transformation and a change in power relations and dynamics, where woman is no longer traditionally perceived as unequal is a crucial step in achieving women’s economic empowerment. 

Access to lifelong education and training programs is also an essential tool in empowering girls and women and needs to be integrated into legal frameworks on a global level. Education has a significant influence on the promotion of gender equality and social justice by transforming preconceptions about traditional gender roles and stereotypes. Leonore Grünberg, the coordinator of a multi-project gender study told us “Societal norms and women’s self-perception as entrepreneurs can limit women’s exposure to economic activities and restrict their access to training and support. To address these challenges, we must take down these boundaries and build awareness from an early age, enabling women to realize their full economic potential.”

We also need to acknowledge, reduce, and restructure unpaid work and care, which raises the importance of collecting enough and correct sex-disaggregated data to implement and track progress. Moreover, improving women’s access to and control over resources is crucial, especially in promoting women-led businesses, an important opportunity for women’s economic empowerment. These resources include, among other things, digital access, credit, property ownership, access to markets, and skills and qualifications. 

Sustainable development largely relies on the achievement of gender equality and more specifically, on women’s economic empowerment. As Basma Gaber Wennholz, a Senior Urban Specialist who worked for the World Bank mentioned, “You don’t merely empower women; you pave the way for accessible opportunities, enabling them to empower themselves.” Accordingly, achieving these objectives means acknowledging the many barriers that women face and implementing policies and measures to remove them and make these opportunities available for women to empower themselves. 

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