FEATURE STORY

Women Play Key Role in Economic Gains in Latin America and the Caribbean

August 29, 2012

Female participation in the labor market has been increasing, particularly in the last ten years.

STORY HIGHLIGHTS
  • Women’s growing participation in the workforce had a major role in poverty reduction in the region.
  • Without their work, extreme poverty in the region in 2010 would have been 30% higher.
  • There are still major challenges to overcome, including a persistent wage gap.

The sight of women heading to work every morning through the streets of Latin America is nothing new. In fact, female participation within the labor market has increased, particularly in the last ten years.  This development has brought about significant social changes in the region and improved economic conditions.

So much so, in fact, that had there not been more women in the workforce, extreme poverty in the region in 2010 would have been 30% higher. Something very similar can be said about the region’s recent inroads against persistent inequality.

According to a new World Bank report, The Effect of Women’s Economic Power in Latin America and the Caribbean, launched today at the Inter-American Dialogue in Washington, more low-income women entered the work force than high-income, a crucial insight in the poverty reduction of the region.

Help in coping with economic shocks

During the 2009 crisis in particular, the fact that women participated in the labor market helped the region cope with economic shocks. Households relying only on male income were more vulnerable than those where both man and woman were working.

"Many men lost their employment during the crisis, and they were more reliant on female labor income to drive poverty reduction," said Louise Cord, World Bank Sector Manager of the Poverty Reduction and Gender Group.

But single, working mothers are really the ones facing  the highest risk of poverty.  Indeed, those urban families where only the woman is working are a third more likely to be extremely poor than where the man is the sole breadwinner.

The increase in female participation within the labor market seems to respond to higher enrollment rates and a closing gender gap in education in Latin America and the Caribbean.

Today, in fact,  the gap has been reversed in many countries in Latin America, with more women than men getting an education.

Open Quotes

Despite the fact that they have higher education, despite the fact that returns to experience by age are not declining as fast for women as for men, you see a persistent wage gap for qualified professional women in the region. Close Quotes

Louise Cord
World Bank Sector Manager of the Poverty Reduction and Gender Group

Women still get paid less

However, there are still major challenges. Women in countries such as Chile, Brazil, Mexico or Peru are paid less than men, particularly in top professions – a gap that is widening.

Another interesting factor to look at, according to Louise Cord, is the way employers value experience depending on gender.

"Despite the fact that they have higher education, despite the fact that returns to experience by age are not declining as fast for women as for men, you see a persistent wage gap for qualified professional women in the region," said Louise Cord.

Also, women in Brazil for example, tend to be overwhelmingly represented in low-productivity sectors.

Violence based on gender and teenage pregnancy tends to be high in the region, suggesting that women’s ability to make her own choices and reach her goals may be low.

The report suggests focusing public policy on three elements to help boost women’s economic power: expanding opportunities in the labor market, improving their ability to reach their goals based on their choices, and supporting the growing number of poor, single, female-headed households.