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Central America—A Gender (R)evolution in the Making?

May 25, 2011

In recent years, Central America has increased its economic and political stability. By and large, there has been positive, albeit modest, economic growth and improvements in socio-economic outcomes. Though one in every two women of working age is still not participating economically, their contribution to overall income generation rose significantly of late, despite the region’s slow overall growth trends. In fact, for the first time, women in Central America earn more than men. A new study analyzes the evolution of these trends in the region and reviews a number of programs in Central America and Latin America (some GAP financed) that may have facilitated gender equality. Three broad lessons emerge.

First, policies aiming to improve the returns of female labor by reducing labor market constraints and enhancing skills have shown promise, particularly among the poor. These include training schemes, many of which combine skills training with job placement services that facilitate women’s entry into the labor force. Similarly, the availability of childcare services has enabled young mothers to work more by reducing time constraints at home. Micro-finance schemes have also helped female entrepreneurs by alleviating credit constraints and offering training programs in business management.

Second, policies that have changed intra-household resource allocations by putting money in the hands of women have facilitated investments in human capital accumulation, potentially inducing changes in social and behavioral norms and preferences, while promoting gender equality. The role of female migration in search of better work opportunities also appears to have had a significant impact on intra-household resource allocation and social norms.

Third, many of the programs which targeted poor women directly or indirectly helped improve communication among female beneficiaries, leaders and community members. The small but growing body of evidence shows that such interactions can promote knowledge exchange and induce important changes in behavior and attitudes, which can, in turn, translate into better economic and development outcomes. In fact, the evidence from GAP financed pilots suggests that changes in aspirations can play a major role in improving women’s decision-making, investment and income generation potential.

Despite these advances, existing program coverage, limited fiscal space and modest economic growth in Central America constrain additional advances. A deeper understanding of the links between empowerment and economic development is urgently needed.