Study shows that low female presence in labor force affects economy

09/28/2022

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Janaína Feijó — Foto: Divulgação

The low presence of women in the labor market, compared to men, means that the labor force in the country today is below its potential. A survey carried out by Fundação Getulio Vargas’s Brazilian Institute of Economics (Ibre-FGV) shows that if all women of working age joined the labor market, there would be productivity gains for a certain period and higher GDP growth. The study points out that the gender disparity occurs not only in the participation rate, but also in income, and exists among the better-paid occupations as well.

The women’s participation rate in the labor market went to 53.2% in the second quarter of 2022 from 51% in the second quarter of 2012, according to microdata from the Continuous National Household Sample Survey (Pnad) of the Brazilian Institute of Geography and Statistics (IBGE). The men’s rate went to 72.6% from 74.2% in the period. Before the Covid-19 pandemic, the participation rate was 54.3% for women and 72.7% for men.

According to economist Janaína Feijó, author of a survey on gender differences in the labor market, the female participation rate had been growing consistently, and the male participation was showing stability and declining. “Between 2014 and 2019, this difference, which used to be about 20 percentage points, was falling. The pandemic came and affected mainly women. As the economy picked up, men’s trajectory returned to its trend, but women’s did not.”

In addition to having lower participation in the labor market, women are also more excluded from it. Since 2012, the unemployment rate for women has been higher than that of men, and since 2019 this difference has widened. In the second quarter, the female unemployment rate was at 11.6% (5.5 million), while the male rate reached 7.5% (4.6 million). During the pandemic, the female unemployment rate peaked at 18%, adds Ms. Feijó.

She argues that a largest female participation rate would give a boost to the economy’s productivity and contribute to growth. “This is a strategic variable. Getting more women into the labor market tends to generate positive effects on the economy,” she said.

According to calculations by economist Fernando de Holanda Barbosa Filho, with FGV/Ibre, the reduction of the participation gap between men and women in the labor market could add up to 0.3 percentage points of growth to the GDP over 20 years.

“This can, over time, compensate for the lower growth in the economically active population that we will have because of the demographic transition,” he said.

He adds that many experts compare Brazil to Italy in terms of demographics. “And, taking that into account, they find it difficult for female and male participation rates to converge, because this difference still persists in Italy.”

Researcher Fernando Veloso points out that several studies show an important contribution of the female labor force to U.S. productivity and cites a study by researchers Tiago Cavalcanti, Letícia Fernandes, Laísa Rachter and Cézar Santos showing productivity gains with the fall of barriers to female participation in the labor market. They state that 36% of productivity gains between 1970 and 2010 in Brazil can be attributed to greater female participation.

Besides the unequal proportion of men and women in the market, the survey by Ms. Feijó shows that there is a considerable income difference between men and women, relatively stable over the last 10 years. Currently, men receive an average of R$2,917, while women get R$2,292.

The gender income gap went to 24.7% today from 31.5% in 2012. When a more precise measurement is made, in which variables such as same educational level, race, census area, activity sector, and whether the job is formal or not, the difference is even greater, going to 34.1% from 42.8%.

The discrepancy persists even at higher educational levels. “This means that they are being penalized more. Even with more education, they have lower salaries than men,” said Ms. Feijó.

When the education and socioeconomic level variables are combined, the difference increases in the higher income strata. Among workers who have completed university between 24 and 60 years old, the income distribution is more asymmetric in the richer strata. In the group of the poorest 10%, women account for 72.7% of salaries paid, and men for 27.3%. In the group of the richest 10%, the picture is inverted: women represent 33.1% of the wages paid, and men, 66.9%.

This is reflected in the universe of occupations that pay the most, in which women are also underrepresented, the study shows. Among general directors and managers, 71% are men who earn about R$17,269, and 29% are women who earn R$15,302.

Of the program and application developers and analysts, 82% are men who earn R$7,902 and 18% are women with average salaries of R$6,300. There is more balance among managers in administration and services (50% and 50%) and physicians (51% men and 49% women). Even in these positions, the salaries paid to men are usually higher.

“The Consolidation of Labor Laws prohibits different remuneration [when] performing the same job, the same function, with the same qualification. But what we observe is that there is an illegal practice that is difficult to control because people generally don’t know how much the other person earns,” said Ligia Fabris, a professor at FGV’s Law School in Rio de Janeiro.

She argued that in the private as well as the public sector, men generally rise up faster than women, in the phenomenon known as the “glass ceiling,” that is, an invisible obstacle that is not in the law or in the company’s bylaws.

“Women find it difficult to get into the job market, which shows up in the lower participation rate than men. When they offer their labor force, they face greater difficulty, which shows up in the higher unemployment rate than men,” said Ms. Feijó.

“Once in the market, even with productive attributes equal to men, they tend to have lower pay. And if we look at income by income distribution, we see that they are underrepresented in the higher strata and in positions that pay more. It’s a whole context that shows how the situation of women in the labor market is more delicate.”

*By Marsílea Gombata — São Paulo

Source: Valor International

https://valorinternational.globo.com/