- Knowledge base
- Policy question
According to data provided by the International Labour Organisation 55% of women worldwide were in the labour force in 2010. This unimpressive average, however, obscures major differences between countries. There were countries like Burundi, whose female labour force participation did not fall below 50% for any age group as well as states like Algeria, where it never reached that mark. In this contribution, I will argue that inclusive development needs to focus on improving access to formal jobs to target women who are actually in work, rather than creating jobs for those out of the labour force. Policy needs to make major efforts to formalise jobs that are currently performed in the informal sector and to reinforce compliance with labour law by registered firms and enterprises.
In her famous historical account on American women’s employment, Claudia Goldin describes how for extended periods of time, wives’ and mothers’ ability to withdraw from the labour market was a sign of family affluence. In many low and middle income countries today, the same logic applies: those women who continue to perform paid work after marriage and childbirth, do so out of sheer necessity. Across countries, we observe that female labour force participation is high in least developed countries and falls as countries develop economically – until it starts increasing again in upper middle income countries, which often fall outside the scope of development cooperation. It is this group of working women, large in low income countries and smaller in middle income countries, that should be the target group of policies aiming to empower the marginalised through productive employment.
The work these women do, is often limited to informal, low paid and labour intensive sectors and occupations (e.g. Çagatay & Özler). In recent research in nine sub-Saharan African countries, Kea Tijdens, Maarten van Klaveren and I develop a scale for job-based informality, based on workers’ employment status (such as having a written contract and agreed working hours) and access to social security. We find that workers in more formal jobs receive higher wages and work shorter hours – in short, formal jobs yield better labour market outcomes. Making sure that firms are registered and offer formal sector jobs should be a first priority in trying to secure gainful employment for women, or indeed for other marginalised groups.
For women in particular, working in the formal sector often also implies the presence of laws regulating maternity leave and other family provisions. Our report on Labour Rights for Women shows that these rights are effectively enshrined in the labour codes of many developing countries. Yet compliance with the law is often lagging far behind official policies. In numerous reports on wages in developing countries, prepared in cooperation with the WageIndicator Foundation, we find registered enterprises that regularly pay wages below the statutory minimum and employees lack access to benefits to which they should be entitled. With support from the Foreign Affairs Ministry’s FLOW fund, the WageIndicator Foundation launched an online comparison tool for collective bargaining agreements. Studying these collective bargaining agreements for a recent report, we find that, almost without exception, they guarantee standards equal to or above the statutory minimum. As such, they reinforce compliance.
While it would be easy to think of collective bargaining agreements that merely copy legal standards as unambitious, they can also be interpreted as an employer’s pledge to uphold the law, a non-trivial commitment in many developing countries. Formal jobs and firm level commitment to compliance with the law could be a promising of involving the social partners in achieving inclusive development.
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