Tuesday, September 27, 2016

OECD: Some progress made in Pacific Alliance, but more must be done to lift women out of poverty

Chile, Colombia, Mexico and Peru should be doing better for women.  Now is the time to act.

- Gabriela Ramos, OECD Chief of Staff, Sherpa to the G20
and Special Counsellor to the OECD Secretary-General


Since 2013, the Organization for Economic Cooperation and Development (OECD) has pursued a robust  research and policy agenda to support the reduction and elimination of gender equality in member states.  This agenda is based on the OECD's 2013 OECD Gender Recommendation and 2015 OECD Recommendation on Gender Equality in Public Life.

As part of this agenda - and at the request of countries in the Pacific Alliance - on August 26, 2016 the OECD released the report Gender Equality in the Pacific Alliance : Promoting Women's Economic Empowerment which compares gender-related economic outcomes in Chile, Colombia, Mexico and Peru.  The Pacific Alliance is a regional integration project established in 2011 by the four Latin American countries.  Three of those countries (Chile, Mexico and Peru) are parties to the still unratified Trans-Pacific Partnership (TPP).  Two are members of the OECD (Chile and Mexico) and one is being considered for membership in the OECD (Colombia).  All four countries are signatories to free trade agreements with both the U.S. and Canada - most notably Mexico, which has been a member state of the NAFTA since 1994.

As a result of the leadership of outgoing President of Chile Michelle Bachelet, gender equality was on the agenda of the 2016 Pacific Alliance Summit held in Puerto Varas, Chile from June 28 to July 1, 2016.

The overall message of Gender Equality in the Pacific Alliance is that all four member states have made significant strides in improving gender equality but a significant amount of work is still required.  Overall issues that hit women particularly hard are the pervasiveness of work in the informal sector, high rates of poverty, weak rule of law and inadequate institutions.

The report examines and compares participation rates for women and girls in education, the labor market and business ownership, highlighting three major areas of concern: (1) the high rate of girls and women who are Not in Education, Employment or Training (NEET); (2) unequal sharing of unpaid housework and childcare borne by women; and (3) the persistence of traditional attitudes about gender roles.  The report then goes on to make the economic case for gender equality and concludes with a number of policy recommendations to level the playing field between girls and boys and women and men.

All four of the countries in the Pacific Alliance made significant progress in primary education rates for both girls and boys - over 90% of children in Chile, Colombia, Mexico and Peru attend primary school.  Rates drop off for both girls and boys at the secondary school level, with the lowest participation rate in Mexico at 67% and the highest at 86% in Chile.  More girls attend secondary school in Colombia than boys (80% of the girls and 74% of the boys).  At the college/university level, Chile made the most advancement.  The total college enrollment in Chile is now 71%.  Compared to 2000 when 35% of young women in Chile attended college or university, today 84% attend.  Only 23% of Chilean women in college graduate with a degree in science or math, however - compared to 42% and 46% in Colombia and Mexico respectively.

Labor market participation rates for women in the four nations have increased over the last two decades, especially in Chile and Peru.  In Chile, the percentage of women in the workforce increased from 37.4% to 55.7%.  The percentage of Peruvian women in the workforce increased from 52.7% to 65.5%.  The percentage of women in the Colombian and Mexican labor markets increased about 5%, from 39.6% to 46.8% in Mexico and from 57.4% to 62.9% in Colombia.

Despite increased participation in labor markets, women in the Pacific Alliance tend to have lower quality jobs and earn less than men.  They also tend to work in the informal sector such as in home-based and domestic work.  This means that in addition to having low earning potential, a high percentage women are not participating in national social security systems - meaning no access to new increased maternity benefits legislated in Colombia in 2010 (for example) and no pension benefits in old age.  Thus women in the Pacific Alliance start out poor, remain poor during adulthood and end their lives in poverty.

Particularly troubling are the statistics for Mexico, where 64.6% of women (and 48.8% of men) report having never paid social security contributions.  In 2010 Colombia passed the Formalisation and Job Creation Law to incentivize formalization of companies and employment - providing government support, simplifying administrative and legal procedures and providing tax relief to encourage the hiring of workers from "vulnerable population groups" like women over 40.

One particularly hard-to-overcome problem is the gender pay gap - despite equal or better school completion rates for girls.  The OECD attributes this to employer discrimination, women's career breaks, occupational segregation and the heavier housework (including childcare) burden on women.  The report points out that increasing women's labor force participation and Equal Pay are good for both women and men.  Halving the current gender gap in Mexico would increase the country's projected growth rate by 0.16 percentage points a year.

The OECD highlights a number of policy measures to address economic inequality between women and men.  One policy measure is paternity leave, to enable fathers to take a greater role in childrearing.  Chile offers 12 weeks of parental leave that can be divided between the mother and father.  Mexico recently introduced 5 days of paternity leave.   Mothers in Mexico are entitled to 12 weeks of maternity leave.  The report emphasizes at each point it discusses these maternity leave laws that the majority of women cannot access the benefits because they are working in the informal sector.

Another policy measure effective in reducing women's poverty and allowing them to improve their earning capacity is childcare and early childhood education.  Mexico has made some progress in this area.  In 2002, 54% of children aged 3 to 5 were in pre-primary or primary school.  Today, that number has increased to 91.3%.  Between 2005-2014, the number of Peruvian pre-schoolers increased from 66.5% to 78.9%.  One particular Mexican program highlighted by the report is the Estancias Infantiles para Apoyar a Madres Trabajadores (Childcare to Help Working Mothers) program which both provides childcare and certification mechanisms for childcare providers (many of whom are women).

Not surprisingly, one of the report's main policy recommendations is that more women should be moved into formal employment and social security systems.  Some of the recommended steps to achieve these two interlinked goals are:   providing tax credits and enabling individual unemployment savings accounts; improving women's (especially poor, rural and indigenous women's) access to banking and loans; making it less expensive to formalize an informal business or self-startup in the informal sector; and strengthening labor inspection of informal businesses with workers on the payroll.

Another set of key recommendations in the report relate to the elimination of gender inequalities in the workplace - particularly eliminating the gender wage gap by promoting pay transparency, tackling stereotypes, emphasizing equal pay for equal work and strengthening laws and enforcement for combating all forms of discrimination in pay, recruitment, training and promotion.    In addition to  these workplace-related recommendations, the OECD emphasizes the need to improve educational outcomes for girls and women, especially in the scientific, technical and math fields.

Gender Equality in the Pacific Alliance : Promoting Women's Economic Empowerment is an excellent report.  It is an example of just how critical leadership by women at the top levels of government and the private sector can be to getting women's issues at the top of the international agenda.  Anyone interested in sustainable economic development, women's economic empowerment and regional legal and social systems or the well-being of women, children and men in the Pacific Alliance should immediately read this report.