Q&A: Global Trends in Female Employment
Female employment rates are on the rise in many countries globally, enabling higher GDP growth, household incomes and consumer goods spending. Yet for many reasons, female employment rates are frequently significantly lower than male equivalents, which is holding back global economic growth potential.
- Why do trends in female employment matter?
- Where are the highest/lowest rates of female employment and why?
- Which industries and job levels do women most frequently occupy?
- What is the impact of female employment on consumer trends?
- What is the outlook for female employment?
Why do trends in female employment matter?
Between 2005 and 2010, the growth in the global number of economically active women was 8.8%, which translated to an additional 101 million women to the global workforce. This has caused a rise in female disposable income levels, creating opportunities for the consumer goods industry. The increase in working women is also impacting businesses, for example by producing a rise in the number of part-time employees in many markets.
- Female employment has been increasing as a result of a combination of factors. Attitudes towards women working are becoming more tolerant in many markets. More countries are implementing laws that improve working conditions for women, such as equal pay and outlawing sexual harassment at work. There is also a global trend towards marrying and having children later in life, which means that more women are opting to work longer before having children;
- Low female employment in a country can hinder its GDP growth potential. Many countries that have low GDP per capita often have fewer women in their workforces. Turkey is a prime example of a country where poor female employment is holding back its prospects of economic growth. In 2010 its female employment rate was just 23.7% of its working age female population (aged 15-64). This contributed to Turkey having the lowest GDP per capita in Western Europe in 2010 at US$10,107;
- There is a correlation between high productivity levels and high levels of female employment. Norway had the highest labour productivity rate in the world in 2010, at US$143,790 per person employed, and one of the highest female employment rates globally, with 78.5% of its working age female population in employment in 2010;
- Countries that have higher rates of working women typically have higher per household incomes and household spending due to the greater prevalence of households with dual breadwinners. There are some exceptions, such as the oil-rich UAE economy which has low levels of female employment but the fifth highest per household expenditure in the world in 2010. Switzerland and the USA had the ninth and tenth highest levels of per household expenditure in 2010, with US$87,069 and US$84,653 respectively in 2010. Both have high rates of female employment, with 75.6% (Switzerland) and 64.8% (the USA) in 2010;
- In many countries, girls outperform boys in primary and secondary education exams. Yet women are less likely to be economically active than men: in 2010, 1.3 billion, or 56.2% of the world’s total working age female population (aged 15-64) were economically active, compared to 80.9% of the world’s working age male population. This suggests that the potential female contribution to the global economy is far from being fully realised.
Where are the highest/ lowest rates of female employment and why?
- Among the countries with the highest rates of female labour participation (measure of the proportion of a country’s working-age population that engages actively in the labour market, either by working or looking for work) are some developing countries because wages are too low for families to live comfortably on one salary. Burundi, which had 91.0% of women participating in the labour force in 2009 (the latest year available), and Rwanda (86.7%) according to the ILO are two such examples, the highest female labour force participation rates in the world. However, actual female employment levels remain dependent on the job opportunities available to them;
- Some of the highest rates of female employment in 2010 were in Scandinavian countries. Norway, Iceland, Denmark and Sweden all had female employment rates of over 70% in 2010. Generous maternity leave, strong anti-discrimination employment laws and widespread cultural attitudes of gender equality in these countries contribute to this;
- The lowest female employment rates are found in Middle Eastern countries. These typically have patriarchal societies with employment legislation that either does not protect, or actively discriminates against women. Iraq had the lowest female employment rate in 2010, at 7.1%; Yemen, Iran and Syria had female employment rates under 15%.
Which industries and job levels do women most frequently occupy?
- Women are far more likely to occupy part-time jobs than men in many of the world’s major economies, because this affords them the ability to also look after their children. The USA for example had around twice as many women as men in part-time jobs in 2010, with 11.8 million women compared to 6.0 million men;
- In emerging countries, women still tend to work primarily in manual industries such as agriculture and manufacturing. In developed economies, women occupy service industries; so the increase in the proportion of GDP accounted for by service industries in many markets is helping to boost female employment. Female employment is especially high in the public sector, partially because public sector roles are more likely to offer flexible or part-time working;
- Even in economies where the ratio of male to female employment is more equal, women are often conspicuously lacking in senior management roles. According to an OECD report, Canada, France, Hungary, Poland and the USA are the countries with the highest proportions of women working in management; over 35% of managers in these markets were female in 2010;
- Women are also less likely to be self-employed than men. According to OECD statistics, 12.7% of women across all OECD countries in 2010 were self-employed, compared to 17.7% of men.
What is the impact of female employment on consumer trends?
- The average world female disposable income in 2010 was lower than the male equivalent at US$5,514 per capita for women compared with US$8,645 for men, representing a gender pay gap of US$3,131. This pay gap has increased since 2005 when it stood at US$2,227. Yet global average female disposable incomes have nonetheless increased since 2005 when they stood at US$4,367 per female due to rising female employment;
- Although in 2010 female disposable incomes remained lower than male disposable incomes in many markets, female disposable incomes grew in most markets between 2005 and 2010. Average annual real growth in female disposable incomes from 2005-2010 was higher than male disposable incomes in Eastern Europe and Australasia, where female disposable incomes grew in the latter at 6.0% compared to 5.2% for men;
- Pakistan had one of the lowest female disposable incomes in the world in 2010, a result of low numbers of women in employment, which will limit spending on “female” consumer goods such as beauty and personal care. The highest female disposable income levels are typically in markets that have high female employment: Switzerland was the market with the highest average female disposable income in 2010, followed by Norway;
- The increase in female disposable income levels has meant that companies have turned their attention to women. Manufacturers of product categories that target women such as premium cosmetics and sanitary protection have brought out increasingly sophisticated and more costly products, driving sales in these industries as more women can afford to trade up: actual global sales of premium cosmetics rocketed from US$68.0 billion in 2005 to US$88.1 billion by 2010. Likewise, traditionally ‘male’ product categories such as technology have targeted women, designing products to appeal to women. Sony for example brought out the Sony Vaio Pink VAIO CR Series Notebook PC, and Apple has designed pink, green and blue iPad covers.
What is the outlook for female employment?
The employed female population in many markets is set to grow, for example by 17.0% overall in Australasia from 2011 to 2020 and by 9.7% in North America. In Eastern Europe the employed female population will decline by 0.7% owing to an overall population decline in the region.
- The female employment rate in many countries is set to rise by 2020 compared to 2010 as negative attitudes towards working women are slowly changing, even in countries where they were comparatively high. The female employment rate in the Netherlands for example is forecast to rise from 71.0% in 2010 to 83.2% by 2020. Female literacy rates are also improving as a result of better education for girls. In Pakistan for example, the female adult literacy rate is set to rise from 35.4% of the population aged 15+ in 2005 to 40.0% by the end of 2011;
- As there are fears of a double-dip recession in 2012 in some of the world’s major economies such as the USA and the UK, employers are likely to continue to prefer the flexibility offered by part-time female employees. The number of part-time female employees in the UK is set to rise from 4.9 million in 2010 to 5.3 million by 2020. This could present a risk of underemployment however, and may reduce consumer expenditure as a result of lower female disposable income levels. Women may be more adversely affected than men by public sector job cuts that are taking place in 2011 in many countries as part of government budget deficit reduction;
- As a result of the increase in working women overall, female average annual disposable income at the world level is set to rise from US$5,514 in 2010 to US$6,396 in real terms by 2020. This will increase opportunities for the many consumer goods industries that target women.