Men may be more vulnerable to Covid-19, but women have been hit hardest by the pandemic’s impact on education, employment and the wider economy. Targeted policy action is needed to ensure these inequalities are corrected as economies recover. Digital financial inclusion and targeted income transfers can be powerful instruments, according to a panel of female leaders from central banks, international financial institutions and the private sector hosted by OMFIF on 25 November.
Close to 1m women have lost their jobs since the start of the crisis, according to Ratna Sahay, deputy director of the International Monetary Fund’s monetary and capital markets department. Banco Central do Brasil Deputy Governor Fernanda Nechio added that in Brazil, the female unemployment rate is now double that of men. One in four women still in work are considering moving to a lower-level position or leaving the workforce, according to McKinsey research cited by Gina Omolon, partner at Mazars.
Women work in sectors hit hardest by pandemic due to lockdown and social distancing measures, Sahay explained. These include hospitality and food services, as well as the informal sector.
Kawtar Ed-Dahmani, managing director of emerging markets sovereign debt at Barings, highlighted that, ‘Any shock tends to magnify existent inequalities.’
Shutdown measures have led to an increase in family and childcare responsibilities, and women have had to take on a greater share. The same applies to housework. According to a survey conducted in Brazil, said Nechio, women are dedicating more time to these tasks than their male partners. Pointing to wage gaps within households, Omolon noted that many families have had to decide which parent should stop working. As women tend to earn less than their partners, they are usually the ones to make the sacrifice.
‘With no policy action, this trend will wipe out all the progress we’ve made in the last decade towards gender equality’, cautioned Sahay. To ensure a sustainable and inclusive recovery, she said, governments must accelerate the adoption of digital financial services. A recent IMF study ‘found that in most regions, gender gaps are closing with the advancement of fintech’.
However, she stressed that these efforts would only work alongside policies to narrow the financial literacy gaps and improve digital infrastructure. Sahay added that ‘women, on average, have a lower chance of owning a mobile phone or a traditional bank account, have more limited internet access and are poorer and less educated than men. They are also less likely to be in the labour force.’
For Ed-Dahmani, improving access to education is key to achieving an inclusive recovery. Because of cultural barriers, girls are more likely to quit school to take on childcare responsibilities. This unequal treatment has long-lasting and irreversible consequences on their access to higher education and work.
The panel discussed ways in which companies can empower women through workshops and events. In Sahay’s experience, real progress towards promoting gender diversity ‘occurs when the top leadership sends the signal’. According to IMF data, gender balance is not just important socially – it brings economic benefits as well. Diversity among companies’ top ranks results in improved financial stability. Reducing gender gaps boosts economic growth.
The pandemic has made clear the need for targeted policy instruments. Nechio emphasised the importance of tailoring policies to the needs of minorities, as they are particularly exposed and vulnerable to shocks. The Brazilian government has implemented a targeted income transfer programme for low-income households to counteract the effects of the crisis. Recognising households’ different needs depending on the main earner, single mothers receive more funding.
Ed-Dahmani and Sahay noted that fiscal constraints can limit governments’ ability to mitigate the impact of Covid-19. They highlighted the importance of ramping up international co-operation by offering finance under special conditions, granting debt relief and providing policy and fiscal advice, particularly for developing countries.
Ed-Dahmani and Nechio underlined that governments need reliable data to implement targeted policies successfully. Data gaps are often a barrier to advancing environmental, social and governance issues. Mazars, said Omolon, is developing diversity and inclusion risk analysis tools to help organisations gain insights on the state of their diversity efforts. Similarly, Ed-Dahmani outlined areas in which investors and the public sector can work together to reduce gender inequalities. For example, governments could issue ‘gender equality bonds’.
Closing, the panel reiterated the importance of education, embracing the opportunities that big tech presents, and empowering communities to push forward gender diversity initiatives.
Natalia Ospina and Levine Thio are Research Assistants at OMFIF. For more on this topic, download the Gender Balance Index.