The Economic Argument for Working Women

It’s clear Jordan would get a huge economic boost if more women were encouraged to join its workforce.

Many countries have started an initiative to introduce girls to the world of work. It involves girls visiting their parents’ place of employment once a year. Thus girls can see the world of work and be exposed to the wide range of opportunities and experiences they might look forward to.

The idea emerged in high-income countries nearly 30 years ago. In this group of countries women have increased significantly their participation in the labor force over time that has now reached a significant 53 percent (compared to 69 percent of men). Among young persons below the age of 25 the gender gap is narrower: 41 percent of women and 48 percent of men are in the labor force.

Development can have a huge impact on gender roles. Take for example the case of low-income countries in Africa. In Tanzania, Burundi, and Rwanda, more women than men are in the labor force. In Kenya and Uganda, women’s rates are only marginally behind those of men.

In low-income countries all men, women, and children have to work mainly in agriculture and the informal sector to make ends meet. When incomes start rising, the confluence of urbanization, industrialization, and the separation of work from home-based survival activities reduce the labor force participation of women especially among those in the growing middle classes. As countries reach high income and women become more educated and markets expand, especially in services, women are drawn back into the labor force.

To put some real life context, women’s participation in the labor force started rising in high-income countries in the 1950s. It accelerated during the 1960s and 1970s when labor scarcities pushed wages up and made staying at home more expensive. This “demand pull” by employers has more recently been accompanied by a “supply push” from families partly due to globalization as wages, except for the most skilled, have stagnated or even declined. This has in turn made the need for additional earners in the same household more pressing.

Jordan seems so far to have been detached from these realities. At its level of economic development, incomes and educational attainment, the labor force participation rate of Jordanian women should have been around 40 percent compared to the current meagre 15 percent. This implies that most households have only one wage earner. And in many cases their wages are insufficient to support decent living conditions. This cannot last long and the one (male) breadwinner family is likely to disappear fast.

Moreover, macroeconomic imbalances and fiscal pressures on governments reduce the scope for public services, especially in education, health, and transportation. The implied risk is that a large segment of the population may be deprived of them with significant long-term losses, unless they can turn into private providers, if they can afford to do so.

Jordan needs to create more jobs and not just that but jobs that offer adequate wages and social protection. This is not a women’s issue. Among the unemployed most (nearly 70 percent) are men. And most Jordanian men work for low wages. The conditions of labor scarcity and high wages that pulled women into the labor force in high-income countries are missing in Jordan. But like in high-income countries, the need for additional earners in the family is becoming increasingly pressing.

Perhaps Jordan can do little that would create the amount of decent jobs that would pull women into employment in the short-run. This can happen only after a massive reduction in unemployment and increases in wages. This will take time. Economic reforms, even when correctly conceptualized and timely implemented, take time to show results. Admittedly, the Jordanian government has many ideas on how to navigate the future with successive visions, strategies, and plans.

That said, there is more that Jordanians can do individually. For example, a recent visit at a workplace employing young women witnessed a row of elderly women stoically waiting at the entrance of the building. These were their mothers who could not bear the idea that their daughters would be unattended away from home. It needs to be added that the young women were all university graduates. One wonders if these mothers had also enrolled in and attended the same classes as their daughters.

It is perhaps high time for families to accept that their offspring are trustworthy and capable of independence. Moreover, Jordan is a country where laws are broadly enforced. And it has legislation, some of it considered pioneering among Arab countries, which ranges from maternity benefits to equality in many aspects of public and family life. But surely more can be done and needs to be done by all: government, employers and families.

A recent study estimated that Jordanian GDP could have been almost 20 percent higher, if gender differences in the labor market were eliminated. And a World Bank report showed that Jordan has the most numerous gender differences in business law in the Arab world—save Saudi Arabia. Jordan cannot afford for much longer to ignore the economic potential of half of its human capital. This is not just a normative issue. It is an economic imperative.

Professor Zafiris Tzannatos is an economist living in Amman and Fellow of the Lebanese Center for Policy Studies.