How should we measure 'women's economic empowerment'?

Vanessa from SOCOMEP, an enterprise that stands out for its inclusion of women across all areas of the company's work, performs on-site monitoring and reporting on loading and unloading operations to cargo vessels, containers and discharges to the regional tuna processing factories in Seychelles. Photo by: Ryan Brown / UN Women / CC BY-NC-ND

LONDON — Yesterday afternoon, a high-profile roundtable featuring several leaders from the worlds of politics and development gathered at the U.N. General Assembly in New York to talk about “actions and commitments for women’s economic empowerment” — an issue that has become central to the Sustainable Development Goals. With the aim of advancing the recommendations of a recent report to the U.N.’s high-level panel on women’s economic empowerment, speakers talked about the urgency of closing the economic gender gap — which, it is said, will take 170 years at the current rate of change.

But while experts largely agree on the definition of economic empowerment — a woman’s ability to make decisions about her own financial well-being — there is growing contention about the way we measure it. Some argue that current methods don’t offer a realistic picture of a woman’s economic well-being and potential.

Experts and academics in the sector are beginning to question the almost exclusive focus on econometrics — such as the number of women with bank accounts, the proportion of businesses owned by women, and the amount of jobs brought into the formal sector — to measure women’s economic empowerment, asking instead how social, psychological, and cultural factors may play a bigger role in measuring economic success.

Some inconsistent or variable results in the push for economic empowerment are raising eyebrows among observers: why, in some contexts, do women choose to remain working in the informal sector, despite access to a high-yield savings account and better protection under international law? Why, despite apparently owning 52 percent of a business, do many women yield management of finances to male relatives? And why, after starting their own business, might some women report feeling depressed, anxious, or helpless?

Put simply: why, in some cases, does economic empowerment fail to empower women, or even possibly disempower them?

Defining empowerment

Within the development sector, women’s economic empowerment is widely understood as a woman’s ability to participate in her community as an economic actor, in order to make decisions for her own financial well-being, as well as that of her family. This could mean buying and selling goods or services or controlling financial assets, such as investments or property. In short, it’s the ability to earn, save, spend, and invest, despite income level or occupation.

The positive correlation between gender equality and economic effects is staggering: as gender equality improves, economic growth increases. The correlation is so widely accepted that governments and independent analysts sometimes predict economic growth based on gender equality benchmarks. For example, consulting firm McKinsey predicts that if India can increase women’s labor force participation by 10 percent by 2025, the country could increase its gross domestic product by 16 percent.

The evidence extends to the private sector. Another report calculates that companies with three or more women in senior management roles score higher in all dimensions of organizational performance.

As a result of this seemingly straightforward connection, the sector has tended to depend on traditional means of measuring economic growth as an indicator of economic empowerment for women. But stakeholders doing business and development in emerging countries are finding the results are not always as expected.

Economic empowerment can’t be measured in a vacuum

Cynthia Drakeman, CEO of DoubleXEconomy and lead author of the recent report for the U.N.’s high-level panel, told Devex she began asking whether the sector is measuring economic empowerment correctly when she saw first hand the detrimental knock-on effects of one of her organization’s empowerment projects in Africa.

“I think of empowerment as two pieces — one is the actual environment, the tools of empowerment, the mobile phone, a bank account, and an ability to earn money; and then the mental state of empowerment, which is feeling the capacity to forge my path,” she told Devex.

But when projects try to instil a sense of empowerment, they don’t always have the anticipated effect. Drakeman said she has observed that when you give someone the tools of empowerment, they can feel overwhelmed and nervous, even hopeless.

“We actually found a high correlation between depression and anxiety and some of the work we were doing on a project in Uganda on mobile finance,” she said. As a result, DoubleXEconomy started exploring whether these feelings could evolve into “something that feels more like confidence, that feels more like ‘OK I have an ability to move forward’ and not just have a bank account, but maybe have a business.”

“It’s not a linear path, it may be cyclical, but it’s this idea that once you get into the process, you can’t really go back,” she said. “You can’t really unlearn this idea that you’re suddenly responsible for your life and your children, for your well-being and theirs, so we have to find a way to help women, not just on the mobile phone/bank account side, but also the mental space side.”

The cycle could carry on throughout an economic empowerment project — even causing it to fail or achieve less than desirable results — all the while undetected by the econometrics.

“Failure in some projects may not be because the mobile banking product didn’t work,” Drakeman told Devex. “The failure may be because it wasn’t designed well for the women, or because the women didn’t feel they could independently manage money in their household.”

The sector is focusing too much on preparing women for, and measuring success based on, the “economic” aspect of economic empowerment, she suggested, and spending too little effort on the real drivers of human success: fulfillment, agency, and power.

The time is ripe for thinking about new ways to measure women’s economic empowerment that account for social and psychological as well as economic aspects, she said. DoubleXEconomy is working on a set of metrics to operate alongside economic indicators, pioneered by Drakeman’s business partner Linda Scott, to provide a fuller picture.

“We’re now developing a new series of psychometric questions [used for measuring psychological states and traits]. You’ve usually seen these used for depression, but they are calibrated questions and tested extremely rigorously so that when you look at them together, you get a picture of someone’s mental state,” she said.

By incorporating psychometric testing into the monitoring and evaluation of women’s economic empowerment programs, you can assess both aspects of economic empowerment: the environmental and mental.

When treating the psychological and emotional impact of empowerment projects as another aspect to measure and address, said Drakeman, practitioners can begin to tweak tools for empowering women economically.

“How do you help provide them with both the support and training for their mental space as well as their physical space?” she said.

Inadequate measures

Others in the private sector are also seeing traditional strategies for measuring female employees’ economic empowerment fall short.

“We still don’t know how to define [empowerment]. Really understanding what empowerment means, and knowing the metrics that are going to indicate whether we’re successful or not is difficult.”

— Cathy Pieters, director at Cocoa Life

The world’s largest chocolate company, Mondelez International, was the first in the cocoa industry to develop a framework to measure the impact of empowering its employees through Cocoa Life, a $400 million commitment to empower 200,000 cocoa farmers by 2020. The program discovered that the majority of workers at three of the most critical stages for high-quality cocoa production — early plant care, fermentation, and drying — were women. Armed with evidence from the Food and Agriculture Organization of the United Nations that providing equal access to land, technology, financial services, education, and markets could increase yields on women’s farms by 20-30 percent, Mondelez set up its framework to monitor and evaluate that correlation.

Together with a team of independent researchers at Harvard University, Mondelez collected and disaggregated data on the performance of male and female workers in order to individually assess progress against the company’s key performance indicators, one of which is to increase the role of women in company decision-making.

Cathy Pieters, director of Cocoa Life, told Devex that while she could see women playing a greater, more vocal role in cocoa production as a result of the initiative, early efforts to measure the impact on the business have faltered.

“We’re deliberate about women’s empowerment, and looking at this disaggregated data, we thought we would be able to see the empowerment, to know things about empowerment impacts, but it’s much more complex than that,” she said.

The empowerment evaluation framework is still young, only in its second year, and Pieters reported she has seen anecdotal evidence of a shift in women’s participation. At the same time, she said she is disappointed with the limited picture offered by the data.

“We still don’t know how to define [empowerment]. Really understanding what empowerment means, and knowing the metrics that are going to indicate whether we’re successful or not is difficult,” she said.

Similar to Drakeman’s push for new metrics that look beyond broader economic indicators, toward social and even personal factors, Pieters at Cocoa Life also asks whether it might be time to widen the scope for measuring women’s economic empowerment, potentially addressing the psychological and social barriers women must overcome in order to be “truly empowered,” Drakeman said.

Pieters added that Cocoa Life is now planning to expand its focus beyond econometrics. Working with global research company Ipsos, the program will explore “a greater focus on quantitative research at the community level beyond the village chief, deep into the households.”

By looking more closely at household financial management and the socioeconomic implications of the income cocoa farming provides, Pieters hopes the program can get a better sense of the extent to which female cocoa producers are becoming agents of their own finances.

“We’re working to evolve the framework, because if we consider women’s empowerment a cross-cutting theme in our program, and if we’re so deliberate in our interventions, then there should be a better way to understand the drivers of change,” she said.

Important clues are emerging: When Cocoa Life brought together women farmers and farm workers, Pieters noticed the women would use the opportunity not only to share best practices, but also to discuss their own strategies for everything from household finance to business management.

“The interesting dynamic is, they’re working on a business together so it has to work, but at the same time they’re spending so much time together and they can tackle all kinds of different topics that are part of their lives, and there is no other space for them to talk about it,” Pieters said.

“Things like household finance, all these things don’t have a space in their lives normally, so by creating these women’s groups in the community and supporting their businesses, you also provide a platform for exchange,” she said.

Unseen barriers

Looking deeper at the socioeconomic gaps faced by women, one arrives inevitably at the informal sector. In sub-Saharan Africa, more than 74 percent of women in non-agricultural jobs work in the informal sector. Because of inequality, poor tax structures, social drivers, or even the way an economy has developed, women are far more likely to work in the informal sector than men.

Formalizing labor is at the heart of economic development: it will enable better tax systems, strengthen the banking sector, incentivize better labor laws, and help curb corruption and poor governance. Since they dominate the informal sector, women are a linchpin for organizations working on economic development. Debates around how to best pull women out of the informal sector continue at a steady pitch — but some are asking whether the stalwart focus on “banking” women isn’t simply another myopic attempt at ignoring social, cultural, and geographic realities in favor of a financial system that, for many, seems alienating and unnecessarily daunting.

Nana Asantewa Afadzinu, executive director of the West Africa Civil Society Institute, encourages less focus on bringing women into formal work, and more on evolving “formal” tools to support women in the informal sector.

“There’s a huge number of women doing what we call ‘tabletop business’ — they just have a small table and they put vegetables or something else on it to sell in the market,” Afadzinu told Devex. “Imagine a hard-working woman, she doesn’t have access to land, she gets an irregular amount of money, and there are issues around identification, she doesn’t have an ID. The bank needs collateral, it needs ID — how can she get an account?”

Afadzinu said mobile money is one solution, although it still needs greater investment and still must face down a sometimes-combative aid industry. Another strategy gaining steam is village savings and loan associations: community-based banking cooperatives in which neighbors — usually women — pool their savings to reach collective and individual saving and investment goals. VSLAs provide better access to financial tools for remote workers, and also provide a platform for community support, similar to those lauded by Pieters, without the social, administrative, or logistical barrier of reaching brick and mortar banks. In 2009, Care International, Barclays Bank, and Plan International set up the Banking for Change initiative, which uses VSLAs to provide more than 500,000 women in the informal sector with access to financial tools.

“The fact that they don’t have to go to a bank — which is really intimidating for them — that’s what’s working now,” Afadzinu said.

She added that the model also provides a platform for shared learning between the women participating in the VSLA, many of whom are venturing into financial management for the first time.

“Now the government should support this kind of work, and businesses should look at how they can work with others to see how they can support these kinds of structures,” she added. 

New ways to measure empowerment

Drakeman agreed that VSLAs can also offer emotional support and community solidarity, tools that are seriously lacking in the traditional arsenal for empowering women economically.

Having started DoubleXEconomy, a company focused on women’s economic empowerment, as a young woman, she said that taken all together, it seems intuitive.

“The word empowerment, it’s sometimes used as if it’s something we do to help somebody else, but that’s not what it means. It means the opposite.”

— Purna Sen, policy director at UN Women

“When I started my company, I took the first step and thought, ‘Yes!’ And the next step, ‘Oh God, what did I do?’”

“I have every possible advantage to succeed, I come from a wealthy country, I have a supportive family, but we’re often asking women who have none of those things to do it. And if I feel anxious of course they do too.”

Whether it’s finding solidarity as an entrepreneur, or learning the ins and outs of applying for a loan, or working with another woman to alleviate anxiety about using an investor’s funds to grow a business, many say that the current yardstick for measuring empowerment — and the psychological, social, as well as environmental factors that influence it — is inadequate.

Reflecting on the existing and emerging tools for empowering women economically, policy director of UN Women Purna Sen said she worries the sector needs to go back to basics to remind itself that empowerment is not something granted or given, but enabled.

“The word empowerment, it’s sometimes used as if it’s something we do to help somebody else, but that’s not what it means. It means the opposite; it’s about enabling choice and decisions by people themselves,” she told Devex.

“We have to create more room for how it actually translates into practice; we haven’t done that yet, and we haven’t done enough work on what that looks like,” she said.

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About the author

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    Molly Anders

    Molly Anders is a U.K. Correspondent for Devex. Based in London, she reports on development finance trends with a focus on British and European institutions. She is especially interested in evidence-based development and women’s economic empowerment, as well as innovative financing for the protection of migrants and refugees. Molly is a former Fulbright Scholar and studied Arabic in Syria, Jordan, Egypt and Morocco.