Home / News / News archive / 2014 / March 2014 / Women's economic empowerment: What is it, and why does it matter?

Women's economic empowerment: What is it, and why does it matter?

Women's empowerment reduces poverty and spurs development
Women's empowerment reduces poverty and spurs development

Gender equality is a cornerstone of development. When women and men are equal in a society poverty is reduced, economies flourish, and the health of children and mothers improves. Yet despite progress in the last two decades women remain marginalised across the globe. This is true for the world of work, where women are often restricted from fully taking part in the economy. Here, we explore why women's economic empowerment is important for us all.

On this page...

Millennium Development Goal #3: Promote gender equality and empower women 

Esther's story

Today, Esther is a successful businesswomen with a steady income. At 25-years-old, she recently ventured into business, and runs a tailoring and embroidering project in Dar es Salaam, Tanzania.

“Currently my family affords three meals a day - this is different from before - and I manage to supply essential requirements for my family. I can’t imagine that today I am a family breadwinner, who can support my younger siblings to get what they need.”  

woman at sewing machine - Nairobi

Behind the current optimism is a past pained by loss and poverty. Esther became the main carer for her five siblings when she was 13, after their mother died. The responsibility meant she sacrificed her education. Esther's father worked hard to earn an income and support the family. Sadly, he died several years after Esther's mother had passed away, leaving the children orphaned. 

“With no relatives, our survival and hopes were completely shattered when our parents died. Our daily survival was now dependent on good Samaritans. But as days went by, our lives became more difficult.” 

With a lack of skills or work opportunities, Esther couldn't earn an income, and the whole family went through a tough period. Her brothers, Deogratias and Geofrey, dropped out of school to work and support the family. Her younger sister, Flora, sought to escape the poverty by becoming a child bride. But when Flora's husband abandoned her and their newborn child, she and the baby moved back in with Esther. While happy to be together again, the burden became heavier than ever, and there was never enough food for the young family.

The family's fortune turned when Esther joined the SOS community outreach programme in Dar es Salaam. She began vocational training classes, and developed skills which empowered her to regain control of her life. Most importantly to Esther, she was able to work and provide for her siblings. "The programme really supports people who had lost their hope" she says.  

What is economic empowerment?

Economic empowerment includes having the opportunity and ability to work, as well as fair pay. Yet it is also so much more than this. 

Women's economic empowerment is: "The capacity for women to participate in, contribute to and benefit from growth processes in ways that recognise the value of their contribution, respect their dignity and make it possible to negotiate a fairer distribution of the benefits of growth” - International Development Research Centre

women sowing seed - agriculture DR CongoAcross the world, women contribute enormously to economies. Women work in businesses, on farms, as entrepreneurs or employees, and do care and domestic work in homes. They are also essential to agriculture, and in 2010 made up 43% of the agricultural work force of developing countries. 

Yet women's economic contribution often isn't appreciated. Moreover, discrimination, poverty and exploitation restrict women from taking part equally in the economy. Compared to men, women: 

  • are more likely to end up in vulnerable, insecure and low-paid jobs. This is particularly true in Western Asia and Northern Africa, where paid opportunities for women are limited.
  • struggle to gain access to financial services, or secure assets such as land and loans. 
  • are less likely to be in senior positions. Globally, just over one in every five senior management positions are occupied by women. Of the Fortune 500 companies, only 3% have women as CEOs.
  • participate less in shaping economic and social policies. 
  • are paid less, even after accounting for educational background and skills. In the majority of countries, women’s wages represent 70-90 % of men’s, with even lower ratios in some Asian and Latin American countries.
  • are often burdened with household work, and therefore don't have time to pursue work opportunities. 

These inequalities are repeated across the world, though figures vary between countries. The graph below shows the ratio of female to male of the working-age population (ages 15–64) that engages in the labour market, by either working or actively looking for work.

Countries that have achieved gender parity in labour market engagement have a score of 1; for every 10 men engaged in the economy there are 10 women. On the other hand, if a country has a score of 0.5, it means that for every 10 men who who are engaged in the labour market, only 5 women are.  

There has been progress over time, with women more equally represented in the economy. However, in the majority of countries, women are still not equal with men in the labour market. 

The goal of women's economic empowerment is to end this unfair reality faced by half of the world's population.

Why is economic empowerment for women important?

women doing crochet Addis ababa

When women aren't reaching their potential in the world of work, it affects not just their own lives but makes whole societies poorer. As well as being a right, women's empowerment brings with it economic and social benefits for entire populations.

What would the world look like if women and men were equally appreciated and treated in the economy? To start, if women's paid employment rates were raised to the same level as men's, economies would grow. In the United States, the country's GDP would be 9% higher, the euro-zone's would be boosted by 13%, and Japan's would increase by 16%. If pay were equal in 15 major developing economies, per capita income would rise by 14% by 2020 and 20% by 2030.

Larger profits and higher productivity

UN Women explains that if all forms of discrimination against female workers and managers was eliminated, productivity per worker could soar by up to 40%. Companies could increase their profits if more women were in management positions. One study found that companies with the greatest representation of women in management roles delivered a profit 34% higher than companies with the lowest representation.

Fairer access to services and tools would help women to succeed in business, which has widespread benefits. For example, if women working in agriculture in 34 developing countries had equal access to vital resources such as seeds, fertilisers and tools, their agricultural output would rise by an average of up to 4%. This might not sound like a huge difference, but it could reduce the number of undernourished people in those countries by as much as 17%. That's about 150 million people not going hungry. 

Children given a better chance at life

Children reap a range of benefits from women being economically empowered. Evidence from several countries shows that when women control more of the household income, either through their own earnings or cash transfers, the family's spending habits change in a way that benefits children.

child and mother

A step to becoming economically empowered is to receive an education. A study that collected data from over 200 countries found that for every additional year a woman is in education, child mortality decreased by 9.5%. At least 4.2 million children survived between 1970 and 1990 as a result of women’s increased education. A final impressive figure, is that a child born to a mother who can read is 50% more likely to survive. 

Beyond facts and figures...

Statistics are what frequently impress and persuade people about the importance of women's economic empowerment. But behind these facts are the individual women whose lives are transformed by having the resources and opportunity to work. Women like Esther in Tanzania, who can now ensure her younger siblings go to school and receive three meals a day. 

Participating in an economy gives a woman dignity and purpose, greater security, higher income, and better access to and control over resources. She becomes a role model to others and is able to provide for her family. To restrict women's path to work is limiting not only for her, but also her family, her community and her society. 

How can more women become economically empowered? 

Women's role in the economy varies between countries, and there has been progress in recent years. Women’s share of paid employment outside the agricultural sector has increased slowly from 35% to 40% between 1990 and 2010, though it remains under 20% in Western Asia, Northern Africa and Southern Asia.

To understand how more women can become economically empowered, we must begin by looking at what currently restricts their full participation in the economy. Barriers to the economy for women include cultural and social norms which have expectations of a woman's role. This could include being a mother, but not a business women. Changing attitudes and behaviours in a society often takes many years. 

Putting an end to gender discrimination requires community-level initiatives to alter attitudes, as well as national and international policies that promote women's rights and ambitions.

Young woman St. Petersburg

Governments, companies and civil society can develop policies which advocate women's economic empowerment. This could include safe-guarding women's access to loans and financial services, developing opportunities for vocational training for women, and ensuring women's current contribution to the economy is valued and respected. Among other initiatives, UN Women advocates measuring women’s unpaid care work, which will help women and men to more readily combine this work with paid employment.

It's important that economic empowerment initiatives reach out to women who are most in need. This includes women belonging to marginalised groups, such as rural women, domestic workers, migrants and low-skilled women.

Financially self-reliant

Through our community outreach programmes, SOS Children supports vulnerable women around the world to gain employable skills and receive an education. We run workshops on business skills, how to set up an enterprise, and keep a family budget. Like Esther, women are able to transform their lives with new opportunities and become financially self-reliant. 

By having access into the economy, women can earn an income and thrive. Development and well-being also flourish when women are economically empowered. Globally, we all need to do what we can to address the current inequalities, and ensure that women are fairly represented in the workplace. The benefits will be reaped by all of us.

Learn more about our community outreach work, which supports women to gain vocational skills and set up businesses. With their increased income and purpose, they can help their family to thrive.