Women's economic empowerment and future development of Bangladesh

Bangladesh's development story over the past fifty years is full of development surprises and extraordinary resilience of the people in the face of frequent natural disasters and manmade calamities. The country's economic transformation has largely been driven by social changes, initiated by women empowerment, and providing a rare example of a neo-liberal development model under which social progress has far outstripped economic growth. In the process, the role of the state has been critical in pursuing sound macroeconomic policies, disaster management, investments in public health and education and partnerships with NGOs and civil society, along with pursuing a reasonably pro-poor growth and social policy agenda highlighting women's empowerment and grassroots activism.

With Bangladesh's vision of becoming an upper middle income country by 2031 and a high income country by 2041, the key to success will be to integrate three development dimensions covering desirable structural changes, growth to reduce income and productivity gaps (convergence), and enhanced equality. For Bangladesh, interactions between structural transformation and social development are critical since technology has radical impacts on social interactions, leading to adaptation and regeneration of social relations. These developments indicate the need for embracing a multi-sectoral and interdisciplinary view on structural transformation in Bangladesh to include institutions that mediate social outcomes such as gender relations.

In Bangladesh, although women constitute half of the population, women's labour force participation rate is only 36.4 per cent compared with 84.0 per cent for men in 2020.  Women's participation in formal labour force is rising (e.g. in RMG industry), but huge gender inequalities continue to persist in the labour market in Bangladesh. Women are heavily concentrated as unpaid family workers and day labourers in the rural areas (in low productivity daily work with low wages and often concentrated in public food for work programmes) and in unpaid family businesses.

Moreover, despite a strong convergence in human capital characteristics (for example, in terms of educational attainments) since the 1990s, wages of men and women have not converged to the same extent and a sizeable gender gap persists. In Bangladesh's patriarchal society, women are assigned most of the reproductive role and they suffer from high workload and unpaid labour, lack of decision-making in the household and society and subordination, while gender-biased social norms keep most women trapped in disadvantaged situations.

As a result, women's level of employment is much lower than that of  men due to factors working on both the demand and supply sides. On the supply side, women's labour market participation depends on a host of socio-economic factors, including household income, age, marital status, education, household dependency ratio and others. While, on the demand side, women employment depends on factors, such as firm level characteristics, technology, location of activities, and others. There are also some sector-specific issues that affect the expansion of women's employment in certain economic activities.

In terms of quality, women are mostly involved in low-paid and low-productivity activities and, according to the Labour Force Survey, 92 per cent of the employed women labour in 2017 are engaged in the informal economy. The outcomes in the labour market shows that women's economic empowerment in Bangladesh has to address many dimensions, e.g., patriarchy and purdah, double burden and time poverty, financial and business knowledge, gender gap in digital technology, access to networks and markets, and many socio-cultural and techno-economic constraints.

The participation in the formal economy is an important vehicle for women's economic empowerment and for raising the status of women and promoting gender equality. The regular wages and salaries, relative job security, prospects for promotion and regulated working conditions in formal employment offer significant potential benefits for women. Formal employment has the ability to increase women's access to skill development, market information, credit, technology and other productive assets, social protection, pensions and social safety nets. The benefits of women's participation in the formal economy create spillover effects on overall gender equality, productivity growth, poverty reduction and the sustainable development goals (SDGs). These are important for Bangladesh since the educational gains for women have not been matched by equal gains in their economic opportunities as many women with education are either excluded or employed in positions that do not make full use of their education and skill.

If we assume that women's economic empowerment is reflected in the realisation of the full labour market potential of the female labour force, this will result in significant macroeconomic gains, including GDP growth. For quantifying the potential impact on GDP growth, we use the accounting relationship: yt = (Y/P)t = (Y/H)t  x (H/E)t x (E/L)t x (L/P)t  where yt is GDP per capita in year t, Yt  is GDP in year t, Ht is the number of working hours in year t, Et  is the number of employed persons in year t, Lt  is the total number of working age population (aged 15-64) in year t and Pt  is total population in year t. On the right hand side, the first term (Y/H) is the labour productivity per hour, (H/E) is the annual average working hour per employed hour, (E/L) is the employment rate, and (L/P) is the demographic dividend.

In Bangladesh, as in most other developing countries, women labour force participation rate is much lower than the men participation rate (estimated at 36.4 per cent for women compared with 84.0 per cent for men in 2020). While calculating the impact of greater women participation in the labour market in an economy, it is usually hypothesised that if women labour force participation rate can be increased to the level of the men participation rate (that is, if gender parity in labour force participation rate is ensured), this would substantially raise the overall employment level, which can be approximated by (men labour force participation rate-to-total labour force participation rate/total labour force participation rate), and hence GDP per capita would also increase by a similar magnitude. Hence, if we adjust the women labour force participation rate to the level of the men participation rate to estimate the impact of women's economic empowerment, we find that GDP per capita rises by between 0.5 to 0.7 percentage points on an average in Bangladesh which can be a substantial gain for the country.    

For moving towards the cherished development vision, the key for Bangladesh will therefore be to introduce good practices for increasing women's contribution to the country's formal economy through advancing women's economic empowerment using multiple channels, such as reducing structural barriers to women's productive economic participation, removing restrictive gender norms and stereotypes, creating institutional mechanisms to assist the young women to plan their careers and ensure gender-sensitive balance between job and family responsibilities, providing non-traditional and innovative forms of employment for women, supporting private sector networks to promote gender equality in the workplace and society and other potential options.

In Bangladesh, gendered power structures and social norms lock women in positions that limit both their productivity and their ability to contribute to the economy and society, particularly since women are marginalised as economic actors due to the structural inequalities that leave them insecure. As such, women's economic empowerment requires a holistic approach that recognises the importance of societal and political, as well as individual empowerment as essential contributors to economic empowerment. Within the approach, women's economic empowerment needs a comprehensive framework to address the 'what' and the 'why' of the concept to identify the key areas for effective interventions and the pointers for effective implementation of the women's economic empowerment agenda, both in the local and national contexts.

Over the last fifty years, targeted efforts by the government and the nongovernment actors have played important roles in creating the initial condition state at the micro-level through initiating grassroots level transformations for promoting women's economic empowerment. These initiatives, no doubt, have created the essential building blocks for developing the critical linkages between micro and macro levels which can trigger rapid transformations in economy-wide and sector-specific gender barriers to prepare the macro economy to effectively respond to these micro-signals to women's economic empowerment. These micro-macro transmissions and interactions, which are seldom acknowledged in the traditional development literature, are the key features of Bangladesh's innovative neo-classical development model which has brought significant socio-economic transformations over the last fifty years; and these are also critical towards ensuring women's rapid economic empowerment in the coming years.

The current need is to explore the dynamics of micro-macro interactions of the women's economic empowerment interventions in Bangladesh and identify both systemic and gender-induced barriers and challenges, both at micro and macro levels that hold women back from economically empowering themselves. For targeting specific policies, we should move towards country-specific model capable of revealing and quantifying the causal relationships of women's economic empowerment and the country's economic outcomes at the macro level in Bangladesh to better design future interventions and facilitate their scaling up to cover more women and in varied locations. 

Dr Mustafa K Mujeri is Executive Director, Institute for Inclusive Finance and Development (InM). 

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