Female labor force participation

January 09, 2022World Bank

Across the globe, women face inferior income opportunities compared with men. Women are less likely to work for income or actively seek work. The global labor force participation rate for women is just over 50% compared to 80% for men. Women are less likely to work in formal employment and have fewer opportunities for business expansion or career progression. When women do work, they earn less. Emerging evidence from recent household survey data suggests that these gender gaps are heightened due to the COVID-19 pandemic.

Female labor force participation over three decades

Source: Gender Data Portal (SL.TLF.ACTI.ZS)
Globally, female labor force participation has remained fairly flat over the last three decades, and today, roughly half of working age women participate in the labor force.
In most regions, while the trend in female labor force participation is flat, there is significant variation in the level of female participation across regions. In five of the seven regions, more than half of all women (ages 15-64) participate in the labor market. However, in South Asia, the Middle East and North Africa only a quarter or less do.
Across all regions, male participation is roughly the same (around 80 percent) and notably higher than that of females.
The gender gap is narrowing in some regions in part due to falling male participation.
But the gender gap in participation remains particularly striking in South Asia and in the Middle East & North Africa where the rates of participation among men are more than three times higher.
In contrast, the gender gap has fallen most in Latin America & the Caribbean.
Grouping countries by income levels reveals an increase in female participation in high income countries. This increase in female participation is also narrowing the gender gap in those economies.
Of all the income groups, the gender gap in labor force participation is largest in lower middle-income countries.
India is the most populous country in the lower-middle income group. It makes up 40% of the income group’s population share and can often drive the aggregate level of the lower-middle income group.
In India, the gap between male and female labor force participation is 57 percentage points.
When India is separated out from the lower-middle income group, the gender gap in participation for all other lower-middle income countries is 10 percentage points lower.

Women’s work and GDP

Women’s work is posited to be related to development through the process of economic transformation.

Levels of female labor force participation are high for the poorest countries generally, where agriculture is the dominant sector and women often participate in small-holder agricultural work. Women’s participation in the workforce is lower in middle-income countries which have much smaller shares of agricultural activities. Finally, among high-income countries, female labor force participation is again higher, accompanied by a shift towards a service sector-based economy and higher education levels among women.

This describes the posited U-shaped relationship between development (proxied by GDP per capita) and female labor force participation where women’s work participation is high for the poorest countries, lower for middle income countries, and then rises again among high income countries.

Is there a global U-shape relationship between female labor force participation and GDP per capita?

Source: Gender Data Portal (SL.TLF.ACTI.ZS and NY.GDP.PCAP.KD)

This theory of the U-shape is observed globally across countries of different income levels. But this global picture may be misleading. As more recent studies have found, this pattern does not hold within regions or when looking within a specific country over time as their income levels rise.

Within regions, there is no U-shape relationship between female labor force participation and GDP per capita

Source: Gender Data Portal (SL.TLF.ACTI.ZS and NY.GDP.PCAP.KD)

In no region do we observe a U-shape pattern in female participation and GDP per capita over the past three decades.

Structural transformation, declining fertility, and increasing female education in many parts of the world have not resulted in significant increases in women’s participation as was theorized. Rather, rigid historic, economic, and social structures and norms factor into stagnant female labor force participation.

Historical view of women’s participation and GDP

Taking a historical view of female participation and GDP, we ask another question: Do lower income countries today have levels of participation that mirror levels that high-income countries had decades earlier?

The answer is no.

Female labor force participation from 1960 to today

Source: Gender Data Portal (SL.TLF.ACTI.ZS and NY.GDP.PCAP.KD)
We look at women’s participation for five countries which are high-income today but had income levels in 1960 comparable to low- and middle-income countries of today.
In Chile, for example, GDP per capita in 1960 was on par with income today in countries such as El Salvador and Indonesia.
We plot the trajectory of female labor force participation from 1960 to today in these five countries. By 2020, there was a sharp rise in the income and female labor force participation in all five of these countries. In Chile, GDP per capita rose to $12,954 and female labor force participation increased to 45 percent.
Comparing their levels of female participation in 1960, we find that it is a much lower participation than found today in comparable low- and middle-income countries.
For example, Chile’s GDP per capita in 1960 is comparable to all low- and middle-income economies highlighted in the blue band. Yet, most of these economies have higher female labor force participation today than Chile did at similar income levels (in 1960).

This suggests that the relationship of female labor force participation to GDP for lower-income countries today is different than was the case decades past. This could be driven by numerous factors -- changing social norms, demographics, technology, urbanization, to name a few possible drivers.

Gendered patterns in type of employment

Gender equality is not just about equal access to jobs but also equal access for men and women to good jobs. The type of work that women do can be very different from the type of work that men do. Here we divide work into two broad categories: vulnerable work and wage work.

The Gender gap in vulnerable and wage work by region

Source: Gender Data Portal (SL.EMP.VULN.ZS and SL.EMP.WORK.ZS)
Vulnerable work is comprised of forms of self-employment (on or off the farm, own-account or being a family worker in a household income activity) and associated with lower labor income and low job security. Wage work is working for an employer (which can be a private employer or public sector, and informal or formal) and associated with greater labor income, greater job security and healthy working conditions.
Workers in Sub-Saharan Africa and South Asia (predominantly low- and middle-income countries) are much more likely to have vulnerable jobs.
In these two regions and in East Asia & Pacific, working women are more likely to be vulnerable workers than working men. Where vulnerable employment is high, the gender gap is also apparent. In Europe & Central Asia, there is a reverse gender gap in vulnerable employment. In other regions, the gender gap in vulnerable employment is not pronounced.

The Gender gap in vulnerable and wage work by GDP per capita

Vulnerable employment is closely related to GDP per capita. Economies with high rates of vulnerable employment are low-income contexts with a large agricultural sector. In these economies, women tend to make up the higher share of the vulnerably employed. As country income levels rise, the gender gap also flips, with men being more likely to be in vulnerable work when they have a job than women.

Source: Gender Data Portal (SL.EMP.VULN.ZS and NY.GDP.PCAP.CD)

From COVID-19 crisis to recovery

The COVID-19 crisis has exacerbated these gender gaps in employment. Although comprehensive official statistics from labor force surveys are not yet available for all countries, emerging studies have consistently documented that working women are taking a harder hit from the crisis. Different patterns by sector and vulnerable work do not explain this. That is, this result is not driven by the sectors in which women work or their higher rates of vulnerable work—within specific work categories, women fared worse than men in terms of COVID-19 impacts on jobs.

COVID-19 impact on work stoppage was greater for women than men

Employment losses were greater for women of all categories.

Source: Kugler, Maurice; Viollaz, Mariana; Duque, Daniel; Gaddis, Isis; Newhouse, David; Palacios-Lopez, Amparo; Weber, Michael. 2021. How Did the COVID-19 Crisis Affect Different Types of Workers in the Developing World?. World Bank, Washington, DC. © World Bank. openknowledge.worldbank.org/handle/10986/358232 License: CC BY 3.0 IGO

Among other explanations is that women have borne the brunt of the increase in the demand for care work (especially for children). A strong and inclusive recovery will require efforts which address this and other underlying drivers of gender gaps in employment opportunities.