Dear Govt, Investing In Women May Bring Us $700 Bn More in GDP
Investing in women’s education, domestic work, digital & financial inclusion can add $700 bn to India’s GDP by 2030.
Around the world, the coronavirus pandemic has overwhelmed health systems and devastated economies. Few have escaped the far-reaching effects, but women and girls have faced a disproportionate impact. Women not only work in higher numbers as healthcare workers on the front lines, they also represent the majority of job losses due to their greater representation in sectors like domestic work and hospitality.
Instances of domestic violence are on the rise and women are facing greater burdens at home, performing unpaid care work and managing household responsibilities – more than ever before. However, in addition to these gendered social impacts of the pandemic comes the hidden financial costs that threaten India’s economic growth and recovery.
The Hidden Costs of Violence Against Women
Prior to the pandemic, India’s female labour force participation rate was only 18.6 percent, compared to 55.6 percent for men, with a significant portion of female workers engaged in the unorganised sector. Since the pandemic’s onslaught, employment has severely decreased. However, due to the nature of the work women perform and the industries they are frequently employed in (including hospitality, personal care, teaching), women are now almost twice as vulnerable to job losses as men.
In other threats to women’s employment and income, with more hours at home, women are further burdened with unpaid work like cooking, cleaning, and caregiving – up by an estimated 30 percent, as compared to before the pandemic. Additionally, the lack of equal access to Internet facilities means that women and girls are less able to work online or complete education remotely than men, impacting their earning ability in the short-and long-term.
These gendered impacts also come with a steep price tag. Take the reported increases in domestic violence over the past six months, for example.
Although typically considered a primarily social issue, the direct and indirect effects of domestic violence have tangible economic impacts. Evidence from Colombia, South America, has highlighted that women experiencing domestic violence are 6.4 percent more likely to be unemployed, face up to 40 percent lower earnings, and experience worse health outcomes. These indirect costs of violence, once aggregated, are estimated to reduce Colombia’s GDP by 4.2 percent.
In India, even before the coronavirus pandemic, at least one-third of women had experienced some form of spousal violence, according to the National Family Health Survey.
Long-Term Impact Of COVID-19 Pandemic On Women’s Employment & Growth
The pandemic will end one day or wane over time, but the impacts of women potentially leaving the labour force will outlive the pandemic itself as a long-term result – since women often face greater barriers in entering work or transitioning between occupations as compared to men. In fact, the coronavirus pandemic wouldn’t be the first instance of that.
During the Ebola outbreak in West Africa during 2013-16, women notably faced higher levels of unemployment than men, and took longer to re-enter the labour force after the epidemic had ended.
According to a recent McKinsey report, these and other disproportionate impacts of the pandemic on women, when quantified, could cost the global economy USD 1 trillion in GDP by 2030, compared to if men and women were impacted equally by the economic and social impacts of the pandemic.
This impact will translate into 33 million fewer jobs for women around the world by 2030.
On the bright side, addressing these inequities now by prioritising gender in the global recovery can reverse this course.
While the impacts of gender inequality are clearly costly, sufficient evidence exists to show that investing in women produces gains worth six to eight times the spending required. Following McKinsey’s model, taking a proactive approach could actually benefit the economy, adding an additional USD 13 trillion to the global GDP and creating over 230 million jobs by 2030.
In India, the benefits translate to an additional USD 700 billion in GDP.
What Indian Govt Should Be Investing In For A Better Economic Recovery
In order to make those gains, India will need to spend 20-30 percent more than the pre-pandemic levels on key social areas, prioritising investments in high-return sectors that are heavily correlated with economic growth. To increase gender equity and kickstart the Indian economy following the coronavirus pandemic, the most urgent investments are needed:
- In education, investments at the pre-primary level will reduce women’s childcare burden during the day, and strengthening secondary and higher education will provide a greater and more competitive and skilled female labour force by allowing a greater proportion of women to access high-quality, affordable education.
- Improving digital infrastructure and literacy will help women adapt to online platforms and programs in an increasingly digital world, further improving their employment prospects; and prioritising women-owned enterprises for funding and support will help them thrive.
- Investments in household infrastructure, including electricity and piped water, will reduce the time needed on household responsibilities that disproportionately burden women.
- Likewise, investments in a formalised childcare industry or better child and family policies around parental leave, including availability of family planning services, will lessen the necessity of unpaid care work and allow women engage in income-producing activities.
Integrating these strategies into India’s recovery and overall development policies is a necessary next step. In addition to the gains in human development that arise from prioritising gender equality, the financial benefits to the economy make a compelling investment case. Otherwise, the structural and societal barriers that hold women back will continue to carry indirect costs on the country’s GDP. For policymakers, the value should be clear.
(Steven Walker is a Senior Project Associate at International Innovation Corps, and Raghav Chopra is a Program Manager at the same organisation. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)
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