Speech

IMF Annual Meetings Seminar—Making Macroeconomics Work for Women Opening Remarks

October 5, 2016

Introduction

Good afternoon. I am delighted to be here to discuss what remains one of the key challenges of our time: women’s economic empowerment. As we just saw with that excellent video, there is still hard work to do, but important progress is within reach. This critical issue needs to be at the core of our policy discussions at the Annual Meetings.

Before the panel debate starts, I would like to take a few minutes to frame the discussion with some thoughts about the IMF’s perspective on women’s economic potential and, most importantly, what should be done to unlock that potential. What can we do to help make the economy work for women, and to help women contribute to the well-being of the global economy?

Yesterday, we presented our take on the world economic outlook. We are now in the fifth consecutive year with GDP growth below its long-term average, and the outlook for global growth remains subdued. [1]

Moreover, not only has income growth been meager since the Global Financial Crisis, low-income earners in many countries have largely been missed out on what increase there has been. Over the last 20 years in advanced economies, for example, the incomes of the top 10 percent rose by 40 percent, but the bottom grew only modestly, if at all. [2]

As you know, this situation has led critics in many countries to question the value of globalization and economic integration.

This week we will be discussing policies to make growth more inclusive. Clearly, it is more important than ever that we leverage the full potential of each and every citizen. In this challenging economic environment, the empowerment of women could be a game-changer for the global economy.

Let’s consider some stark facts: just half of working age women are employed; they are over-represented in the informal sector, particularly in developing countries; and even those who do work earn, on average, three-quarters as much as men.

This is is first and moremost a moral issue. But we also know that empowering women offers many economic benefits. For example:

• Empowerment can drive growth—by some estimates, eliminating gender employment gaps can boost GDP by 5 percent in the U.S., 9 percent in Japan, and 27 percent in India. [3]

• It can support economic diversification—we know that a more diversified economy can produce more stable and sustainable growth; [4]

• Finally, empowerment can lower income inequality by reducing gender inequality in economic outcomes. [5]

Empowering women, therefore, has transformative potential for the world economy. But these will not be overnight changes. Most of the measures we advocate will increase female labor force participation gradually over time—which underlines the importance of beginning immediately.

That said, there can be real benefits in terms of raising potential output in countries facing aging or declining populations. Moreover, the likelihood is that many of the jobs that will be created in the future in advanced economies will be “brain-intensive”. That suggests that the comparative advantage will be for the better educated.

Other structural reforms that countries need to implement could also increase the supply of jobs for women—and boost growth. These include more childcare, active labor market policies, and reduced marginal tax rates on second-incomes.

So what are the implications for the Fund’s work? With our mandate to support global economic stability and prosperity, female empowerment is very much our issue.

This bring me to my final point: the Fund’s contributions to women’s empowerment through our growing body of policy advice and research.

Let me offer a few examples of our recent policy advice on this front:

• In Canada, we have recommended more generous childcare subsidies to encourage women to join the labor market.

• In Chile, we highlighted the need to extend early childhood education and childcare services, and invest in transport to enable more women to travel to jobs.

• Our recently negotiated program with Egypt includes measures designed to make it easier for women to participate in the labor force. These include more money for publicly funded nurseries and a commitment to find ways to improve the safety of public transport.

• In Jordan, we have advised the authorities to address the limited access to information on job opportunities, as well as the lack of targeted active labor market policies for females.

Our research also has had an impact. For example, work on the deepening of the involvement of women in the Japanese labor force has contributed to the country’s policy debate as Japan grapples with the issues of demographic change and declining potential growth.

We are also working with other institutions on these issues. As you know, our Managing Director, Christine Lagarde, is a member of the United Nations High-Level Panel on Women’s Economic Empowerment. In New York last month she announced five specific actions we are taking to further the cause of women’s empowerment. These included:

One: strengthening policy advice and analysis to support female labor force participation.

Two: continuing work to address gender data gaps, particularly in support of financial inclusion.

Three: building on recent research to help break down discriminatory legal barriers.

Four: undertaking further research on the links between gender inequality and growth—including the impact of policies on gender inequality.

And Five: pushing forward our work on gender budgeting, including through policy advice. As you may know, gender budgeting facilitates the use of fiscal policy to promote gender equality and women’s development. The Fund is helping to track gender budgeting efforts around the world, and we recently published the results of our global survey on gender budgeting and released a toolkit.

As I mentioned at the beginning of my remarks, there is hard work to be done. As well as targeting these specific measures to empower women, we also need a broader perspective—considering how to empower women at every stage of the policy process.

That is why our analysis of the impact of macroeconomic policies on women is so important. We expect to have some preliminary findings from this work early next year.

Conclusion

In closing, let me say that women’s empowerment is no longer a side-issue in economics; it has a direct bearing on the welfare of billions of people worldwide. The Fund is a committed partner in these efforts. And there is so much more to do. I look forward to our continuing discussions on what is a priority for us all. Thank you.