Economically empowering women is 'macrocritical' — IMF chief Christine Lagarde

Christine Lagarde, head of the International Monetary Fund, has said women’s participation in the economy is of “macroeconomic” importance to nearly all countries and will be a key strategy for the institution moving forward.

Despite progress in recent decades, fewer women than men are part of the labor force, and women who are in the labor force receive less pay, less education and fewer health opportunities. They also often face legal hurdles that prevent them from fully taking part in the economy.

These enduring gender gaps mean huge potential economic contributions from women are going untapped. In many countries, this is slowing growth, hindering economic diversification, and contributing to income inequality, according to a new book by the IMF, "Women, Work, and Economic Growth: Leveling the Playing Field." 

Globally, women make up 40 percent of the labor force, but in the Middle East and North Africa this figure is only 21 percent. Nearly 90 percent of countries have at least one gender-based legal restriction preventing women from working. Furthermore, the gender wage gap is approximately 16 percent in OECD countries, according to IMF data.

Speaking at session hosted by the Center for Strategic and International Studies in Washington, D.C., to launch the book and mark International Women’s Day, the IMF managing director and former finance minister for France described her institution’s work on women’s economic participation and why it matters for economic growth and also reducing inequality.

“Bringing women to the workplace … reduces inequality because one of major inequalities is the fact that women are left out, underutilized, over exploited, generally underpaid, and quite often in the informal sector. If you improve on all those counts, you reduce inequality,” she said.

When Lagarde first turned the IMF’s attention to the topic of women and the economy, her colleagues at the IMF responded with skepticism, she said. “It took a while, and I heard many times over, including from the board of the IMF [that] women’s participation in the economy is not really macrocritical,” she said.  

However, the organization now considers women’s participation to be of “macrocritical” importance in 90 percent of countries it works in, she said, and was taking steps to translate that into impacts on the ground.

“Now it is a much more accepted principle to the point that we can now drill this down to the operational level, and that’s what we really want to deliver because it’s one thing to convince the board to convince staff, it’s one thing to develop the analytical work and to publish … but then we have to take it further to make a real difference and take it to the country level,” she said.

She said the IMF wants to see countries implement gender budgeting, gender surveillance, and gender programming measures, and that the institution would be asking of any fiscal measures, structural reforms, or monetary policies adopted by countries, what is “going to be supporting women’s contribution to the economy?”

This is currently being put into practice through the IMF’s work with the government of Egypt to restructure its economy, she said. Women’s economic participation is very low in Egypt, she said, and a key issue is women’s concern over their safety when traveling to and from work. In response, the IMF has requested specific measures be included in the country’s reform package to ensure safer transportation and also better childcare options for mothers, she said.

The new book includes chapters on the economic consequences of impact of gender gaps in the labor force and among entrepreneurs and country case studies that look at the drivers and costs of women’s economic participation, or lack of it, in different regions. It also explores various policy options and suggests priorities for developed and developing economies.

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