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Women in the Economy Indicator

Description

This indicator measures the government’s commitment to providing women and men with the same legal ability to access legal and public institutions, own property, go to court, and get a job; and measures the extent to which the law provides girls and women legal protection from violence.

Relationship to Economic Growth

This indicator draws on all eight areas of the World Bank’s Women Business and the Law (WBL) report (http://wbl.worldbank.org/) including: Mobility, Workplace, Pay, Parenthood, Marriage, Entrepreneurship, Assets and Pensions. It also draws from WBL’s 2.0 dataset for information on safety and child marriage.

  • Mobility (WBL): These questions explore women’s legal access to physical mobility within a country. Studies show that legally sanctioned discrimination against women has a significant negative impact on a country’s economic growth, because it prevents a large portion of the population from fully participating in the economy, thus lowering the average ability of the workforce.99
  • Workplace (WBL): These questions explore specific barriers to women’s opportunities in the workplace. Sexual harassment and violence in the workplace can undermine women’s economic empowerment by preventing employment and blocking access to other financial resources.100 Research shows that when women have access to employment, investment in children’s health, nutrition, and education often increases, promoting higher levels of human capital.101
  • Pay (WBL): These questions look at barriers to women’s pay equality. Restrictions that limit the range of jobs that women can hold can lead to occupational segregation and confinement of women to low-paying sectors and activities.102 Many jobs prohibited for women are in highly paid industries, which can have implications for their earning potential. Further, when women are excluded from “male” jobs in the formal sector, an overcrowding can occur in the “female” informal job sector. This leads to a depression of wages for an otherwise productive group of workers.103 Increasing women’s participation in the workforce alone is insufficient for increased economic growth.104 Women need access to the same job and pay opportunities in order to have an impact on economic growth.105
  • Marriage (WBL): These questions look at the rights of women in marriage including questions on domestic violence, and child marriage. Research shows the earnings of women in formal wage work who are exposed to severe partner violence are significantly lower than women who do not experience such violence.106
  • Parenthood (WBL): These questions look at the availability of parental leave and the rights of pregnant women. Childcare and parental leave increase workforce participation, leading to poverty reduction and increased economic growth.107
  • Entrepreneurship (WBL): This area explores barriers to women’s ability to start businesses.  When women receive fewer legal rights, the country’s potential labor force and potential pool of entrepreneurs decreases. Women’s ability to start businesses and create jobs is essential to increase economic growth and alleviate poverty.108
  • Assets (WBL): This area analyzes women’s ability to own, control, and inherit property. Owning and having an equal say in their use of property not only increases women’s financial security; it is also associated with their increased bargaining power within the household.109
  • Pension (WBL): This area examines questions of whether men and women have the same rights with respect to pensions, retirement, retirement age, and periods of absence from the workforce due to childcare. Having the same rights for pensions has been shown to reduce poverty, particularly for older women.110
  • Child Marriage, Inheritance, and Women’s Safety (WBL): This area deals with women’s constitutional rights, and the status of Child Marriage. Due to the typically large age differences between girls younger than 18 and their husbands, child brides lack bargaining power in the marriage and have less say over their activities and choices, including education and economic activity.111 Child marriage—through reduced decision-making power, greater likelihood of school dropout and illiteracy, lower labor force participation and earnings, and less control over productive household assets—severely impedes the economic opportunities of young women.112

Methodology

Indicator Institution Methodology

The indicators are de jure measures, consisting of legal reviews of the questions assessed.

The first portion of this indicator utilizes the WBL index comprised of 35 questions from the Women, Business, and the Law initiative of the World Bank. These questions are divided into 8 categories, each of which receives a score based on the percentage of questions with no restrictions on women’s rights (so a country where women have 3 of the 5 rights measured in a category, would score 60 for that category (because 3 is 60% of 5)). Finally, the scores for all 8 categories are averaged together to create the index.

MCC adds a ninth category using data from the WBL 2.0 index creating a category from three questions: Does the law address child marriage? Do a woman and a man have equal rights to confer citizenship on their spouses and their children? Does the law address femicide? Countries receive a score on this component of the indicator based on the share of protections.  For example, if a country has laws protecting all three components, that country would score 100 on this component (because 3/3 is 100%).

MCC Methodology

The WBL Index breaks its sub-indicators into eight phases of a working woman’s life, each phase containing 4-5 sub-indicators, which are averaged to create the index. To aggregate these sub-indicators with the WBL 2.0 sub-indicators, MCC creates a ‘ninth’ category focused on child marriage and constitutional protection, which is averaged with the original eight from WBL. This means the WBL 2.0 data is 11% of the Women in the Economy indicator and the WBL Index data comprises 89%. An illustrative example of this calculation is below.

MCC’s Women in the Economy Score = [ (WBL Index Score x (8/9)) + (WBL 2.0 Score x (1/9)) ]

For example, imagine a country scored 38.125 on the WBL index and 0 on the WBL 2.0 questions.  To find the country’s Women in the Economy score MCC averages the eight WBL categories with the ninth category from WBL 2.0: (38.125 *(8/9))+ (0*(1/9)) = 33.9.

If a country is missing WBL 2.0 data, but not the WBL index it is given a zero score for the WBL 2.0 component of this indicator.  If a country is missing WBL index data, it is given an N/A score.

Footnotes
  • 99. Sarah Iqbal, Asif Islam, Rita Ramalho, Alena Sakhonchik. 2018. Unequal before the law: Measuring legal gender disparities across the world. Women's Studies International Forum 71, pages 29-45. Esteve-Volart, Berta. 2004 Gender Discrimination and Growth: Theory and Evidence from India. London School of Economics and Political Science.  Klasen, Stephan. 1999. Does gender inequality reduce growth and development? Evidence from cross-country regressions. Working Paper No. 7, Policy Research Report on Gender and Development. Washington, D.C.: The World Bank.  Dollar, David, and Roberta Gatti. 1999. Gender inequality, income, and growth: Are good times good for women? Working Paper No. 1, Policy Research Report on Gender and Development. Washington, D.C.: The World Bank.  Morrisson, Christian and Johannes Jütting. 2004. The impacts of social institutions on the economic role of women in developing countries. Working Paper No. 234. Paris: OECD Development Centre.  Morrison, Andrew, Dhushyanth Raju, and Nistha Sinha. 2007. Gender equality, poverty, and economic growth. Policy Research Working Paper No. 4349. Washington, D.C.: The World Bank Doepke, Matthias, Michele Tertilt, and Alessandra Voena. 2011. The economics and politics of women’s rights. Working Paper.
  • 100. World Bank. 2016. Women, Business, and the Law 2016: Getting to Equal. Washington, D.C.: World Bank.
  • 101. Kennedy, E. and P. Peters. 1992. Household food security and child nutrition: the interaction of income and gender of household head. World Development, Vol. 20, Issue 8, August 1992: 1077-1085.  Hoddinott, John, and Lawrence Haddad. 1995. “Does Female Income Share Influence Household Expenditures? Evidence From Cote D’Ivoire.” Oxford Bulletin of Economics & Statistics 57 (1): 77 – 96.  World Bank. 2001. Engendering Development through Gender Equality in Rights, Resources, and Voice. ISBN 0-19-521596-6.  Ranis, Gustav, Frances Stewart and Alejandro Ramirez. 2000. Economic growth and human development. World Development, 28(2): 197-219. Thomas, Duncan. 1990. Intra-household resource allocation: An inferential approach. The Journal of Human Resources, 25(4): 635-664.
  • 102. World Bank. 2016. Women, Business, and the Law 2016: Getting to Equal. Washington, D.C.: World Bank.
  • 103. Blau, Francine. 1996. Where are We in the Economics of Gender? The Gender Pay Gap. NBER Working Paper 5664.  Ali, Khadija. 2000. Structural adjustment policies and women in the labour market: Urban working women in Pakistan. Third World Planning Review, 22(10).Fontana, Marzia and Cristina Paciello. 2007. Labour Regulations and Anti-Discrimination Legislation: How Do They Influence Gender Equality in Employment and Pay? Sussex: Institute of Development Studies.
  • 104. Klasen, S. 2018. The Impact of Gender Inequality on Economic Performance in Developing Countries.  Annual Review of Resource Economics. 10, 279-298.  Verick, S. 2018. Female labor force participation and development. IZA World of Labor. Mukherjee, P. and Mukhopadhyay, I. 2013. Impact of Gender Inequality on Economic Growth: A Study of Developing Countries. IOSR Journal Of Humanities and Social Science. 13(2) 61-69.
  • 105. Verick, S. 2018. Female labor force participation and development. IZA World of Labor. Wodon, Q. and De La Briere, B. 2018. Unrealized Potential: The High Cost of Gender Inequality in Earnings.  The World Bank Group. Ferrant, G. and A., Kolev. 2016. Does gender discrimination in social institutions matter for longterm growth?: Cross-country evidence. OECD Development Centre Working Paper n°330. 
  • 106. Klugman, J., Hanmer, L., Twigg, S., Hasan, T., McCleary-Sills, J., and Santamaria, J. 2014. Voice and Agency: Empowering Women and Girls for Shared Prosperity. Washington, D.C.: World Bank. World Bank. 2016. Women, Business, and the Law 2016: Getting to Equal. Washington, D.C.: World Bank.
  • 107. Samman, E. and Lombardi, J. 2019. Childcare and Working Families: New Opportunity or Missing Link? UNICEF Evidence Breif. Raub, A., Nandi, A., Earle, A., Chorny, N., Wong, E., Chung, P., Batra, P., Schickedanz, A., Bose, B., Jou, J., Franken, D., and Heyman, J. 2018. Paid Parental Leave: A Detailed Look at Approaches Across OECD Countries.  UCLA. Sawhill, I., Reeves, R., and Nzau, S. 2019. Paid Leave as Fuel for Economic Growth. Brookings Institute.
  • 108. Brush, C. Cooper, S. 2012. Female Entrepreneurship and Economic Development: An International Perspective. Entrepreneurship & Regional Development. 24(1-2) 1-6.  Bahmani-Oskooee M., Galindo MÁ., Méndez M.T. 2012. Women’s Entrepreneurship and Economic Policies. In: Galindo MA., Ribeiro D. (eds) Women’s Entrepreneurship and Economics. International Studies in Entrepreneurship, vol 1000. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-1293-9_3
  • 109. World Bank. 2016. Women, Business, and the Law 2016: Getting to Equal. Washington, D.C.: World Bank.
  • 110. OECD. 2019. Pensions at a Glance – OECD Indicators. Arza, C. 2012. Pension Reforms and Gender Equality in Latin America. United Nations Research Institute for Social Development.2012(2). Zaidi, A. Gasior, K. and Zolyomi, E. 2010. Povery Amongst Older Women and Pensions Policy in the European Union. In Marin, B. and Zolyomi, E. (eds) Women’s Work and Pensions: What is Good, What is Best? Taylor & Francis Group.
  • 111. UNICEF. 2005. Early Marriage: A Harmful Traditional Practice a Statistical Exploration. New York, N.Y.: UNICEF. World Bank. 2016. Women, Business, and the Law 2016: Getting to Equal. Washington, D.C.: World Bank.
  • 112. Parsons, E., Kes A., Petroni, S., Sexton M., and Wodon Q. 2015. Economic Impacts of Child Marriage: A Review of the Literature. International Bank for Reconstruction and Development: Taylor & Francis. Duflo, E. 2011. Women’s Empowerment and Economic Development. Cambridge: National Bureau of Economic Research. Wodon, Q., Nguyen, M.C., and Tsimpo, C. 2016. Child Marriage, Education, and Agency in Uganda. Feminist Economics 22:1, 54-79