Sonia Hoque (ODI) | Women and economic transformation: It’s a win-win if #SheTransforms

Sonia Hoque  (Programme & Operations Manager, ODI)

7 June 2018

It’s no secret that women are key to unlocking the full potential of economies across the developing world. They are not a ‘marginalised group’ (they make up half of the population), but nor should it be assumed they benefit evenly from increased opportunities through economic transformation. Women spend more on their children’s health and education, and bring numerous benefits to employers and business owners. Proposed policies/programmes designed to drive economic transformation should embed a gender lens to enhance women’s access to new jobs and ensure they are not left behind.

Why women are key to economic transformation

Advancing women’s equality could add an estimated $28 trillion to global gross domestic product by 2025, and numerous studies have shown that increasing the numbers of women participating in the labour force has a positive impact on business owners as well as women themselves. For this reason, women’s economic empowerment has always been at the forefront of development debates. For example, the recent SheTrades initiative, led by the International Trade Centre, seeks to connect women entrepreneurs to markets. Women could also contribute to, and benefit from, economic transformation, which occurs when resources (including human resources) shift to more productive uses, which improves the quality of growth and helps sustain job creation.

Discussions on ‘inclusive transformation’ look at the impact of such transformation on women, youth, disabled persons, minority groups, etc. However, women should not be seen just as a marginalised group that needs to be targeted in economic transformation planning simply because of moral drivers (a desire to provide equal opportunities to and empower such groups). Including women makes economic sense. Efforts to increase their participation in the labour force are paying off across some developing countries, and increasing the number of women employees has proved highly productive (think of Bangladesh garments, where approximately 60% of the 3.5m workers are female). Designing policies that support and/or better enable women to take the opportunities brought about by economic transformation is crucial for continued growth, prosperity and broad-based job creation.

Will women get lost in economic transformation?

In a 2016 SET paper, Louise Fox (now USAID’s Chief Economist) explored important questions about the role of gender in economic transformation, emphasising that economic change always brings winners and losers. Economic transformation is defined as the process where resources, including labour, shift from low-productivity activities such as agriculture to higher-productivity ones such as manufacturing and services (productivity improvements within sectors are also counted). Importantly, evidence suggests that, where women can access productive jobs, wage employment in modern enterprises provides higher and more secure income. Louise Fox explores which sectors benefit women’s economic opportunities, and argues the need for complementary policies to increase equality of opportunities when they arise – as it cannot be assumed women will benefit the same way as men.

Increasing the role of women in manufacturing and services sector jobs: a change of mindset

Policies can help bring women into wage employment but some barriers are hard to dismantle. For example, expectations that women will be the primary carers for children, the elderly and the home are still prevalent in many low-income countries. Pressure to stick to traditional roles in what is called the ‘care economy’ mean that women tend to have fewer hours available for waged work. This was also apparent during interviews for a previous SET study on inclusive jobs in Nepal; several (male) firm owners stated that women ‘preferred’ to do care and housework and did not want/have time to work outside.

However, one tourism firm shared a different view: ‘Around 50% of our staff are female. Although they are usually not skilled when they start working here, they are more focused and hard-working.’ This was echoed by the director of A to Z, a major factory in Tanzania that produces light manufacturing goods including garments, household plastics and bednets: ‘We have found that female workers produce higher quality outputs. Their work ethic is better, and they work more efficiently. They are also better at training new people working in the factories.’ This touches on an important finding in a study led by Christopher Woodruff – that training women had supported them to develop managerial skills and increased their chances of promotion in garment factories in Bangladesh.

Studies have shown that increases in income controlled by women lead to greater spending on items that bring more benefits to children. Women invest more in children’s human capital, which has dynamic positive effects on economic growth and future employment prospects. A to Z also supports mothers in particular, as they encourage generations of families working in the factory and see their children as potentially loyal future employees. ‘We like to see families working in the factories and give extra benefits to them for their loyalty, so having mothers working here is a good thing. We also see that those women spend more of their income on their children.

#SheTransforms – Aadila in Tanzania

Aadila grew up on her father’s farm in a rural district near Arusha, Tanzania. With little education beyond primary school level, she had few prospects for work and spent her adolescent years working on the farm with her family.

When local factory A to Z advertised that they were hiring workers in a range of roles, she took the chance to apply. Given her lack of formal education or other skills, she was offered the role of cleaner. With hard work, she worked her way up through a number of roles within A to Z factories, including sewing machine operator, stitcher and office administrator. She is now working in the factory head office in a garment merchandise role, earning 10 times as much as when she was a cleaner and comfortably supporting her family with the additional income.

Although this is an exceptional story, Aadila is not alone as a woman to have gained economic benefits from taking an opportunity to work in a factory. A to Z state that around 90% of their female workers come from rural backgrounds, and embody not only the real-life economic transformation process as they move to more productive employment but also the ability to transform their lives as Aadila has done.

Source: Author interview with A to Z

A to Z is a manufacturing firm with a clear social responsibility approach, but women working in manufacturing firms in other contexts also have spillovers. Heath and Mobarak (2014) examined the Bangladesh garment industry and found spillover benefits to women’s villages – an increase in the age of marriage and first childbirth, health gains and education levels of children.

It’s a win-win if #SheTransfoms

By acknowledging the potential gains at both the individual and the wider societal level that women bring by participating in the labour force, policy-makers have the chance to bring new opportunities to women. While it does not make sense for governments to target industries for development based on whether they tend to employ males or females, policy-makers can ensure programmes and investments are gender-sensitive. This includes making sure females have access to the education and training opportunities needed to compete for new opportunities. Having more women in the marketplace has a positive impact on businesses, which benefit from a larger productive workforce, more competition and, as a result, more choices between better products in all sectors. As mentioned, women spend more of their income on education and health for their children, which can be beneficial for society in the long term. Policy-makers and development partners with the goal of economic transformation should not assume women will benefit evenly from increased opportunities, or see them as a marginalised group. Rather, they are a key force, and any proposed policies/programmes designed to drive economic transformation should contain a gender lens – the cost of not doing so will undoubtedly be higher in the long term.

Sonia Hoque is the Programme & Operations Manager of the Supporting Economic Transformation programme at ODI.

Photo credit: Visual News Associates / World Bank via Flickr