China Research

The International Women’s Day (IWD) on March 8 has become a global phenomenon – widely acknowledged and celebrated. Theoretically, there is a broad understanding in most countries regarding the importance of female equality both politically, institutionally, economically, socially and psychologically. Practically, much more could be done for female equality – and should be done! Both in advanced and emerging countries.

Science has a lot to tell

In my view, science can give different explanations for the benefits of improving female equality. The following five conclusions from scientific research could be mentioned in the first place – most of them having an impact on economic growth and well-being (which is not the same):

¤  The impact of improved institutions on economic growth.
Research has shown for quite a number of years that improved institutions mean a lot to the quality and sustainability of economic growth. Nobel Prize winners such as R. Coase, D. North, E. Ostrom and O. Williamson are particularly famous in this respect. More lately, D. Acemoglu / J.Robinson, D. Rodrik and T. Persson have done extended work on the importance of institutions. Looking more closely on institutional research reveals clearly that better institutional conditions also mean improved conditions for economic growth – but also that extended female participation in these processes logically works as a driver of such desirable economic developments. Examples for progress may be better institutional conditions for female education, health, wages, and child care. 

¤  The impact of female human capital formation on economic growth.
Research has shown for quite some time (R. Lucas, R. Barro, P. Romer, G. Mankiw, etc.) that improvements of human capital formation (education) also outside the pure institutional sphere can contribute substantially to better economic growth. Consequently, when further focus on female capital formation happens, we have a widened source of economic growth.

¤  The impact of enlarged female labor supply. 
A substantial number of countries in the world have already – or will have – increasing demographic problems in the forthcoming decades (China, Japan, Russia, Germany, the Baltic countries, and a number of other European countries, see https://commission.europa.eu/system/files/2023-01/the_impact_of_demographic_change_in_a_changing_environment_2023.PDF).

 A major contribution to a future solution of the enormous burden of labor force shortage can most certainly emerge from an increasing female labor participation, both in volume and in quality terms. Such a development can also contribute to better international competitiveness.

¤  The impact of psychological satisfaction on productivity. 
Psychology often plays a neglected role in economic analysis, even, for example, in productivity studies for scientific work (J. Astegiano). Particularly important is the potential role of improved female labor productivity and what it means to economic growth (OECD, see https://www.oecd.org/chile/economic-empowerment-women-productive-inclusive-societies.htm).

¤  The impact of better economic conditions on the society. 
Since an extended and broadened female labor market participation leads to better medium- and long-term GDP growth, chances of a stable society with good ethics should increase as well (B. Friedman). 

Conclusion – science shows the importance of women in the economy
Putting together the brief reflections above should demonstrate that there is sufficient scientific analysis that underlines the positive impact on economic developments by increasing  and improving gender well-being and improved female participation on labor markets. These processes should be considered as win-win developments – on both macroeconomic and microeconomic levels. This conclusion can be applied to both more advanced and emerging countries.

Hubert Fromlet Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board