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How Economic Development Helps the World's Women

How Economic Development Helps the World's Women
Reuters

In my previous post, I created a series of maps on the treatment and economic opportunity offered to women around the world. Today, I look at the connection between women's economic opportunity and economic development.

With the help of my Martin Prosperity Institute colleague Charlotta Mellander, we combined five leading measures (reflected in the maps I showed yesterday) into a single meta-index we call the Global Women’s Index or GWI, which covers 98 nations. These include two metrics by the United Nations, the Gender Inequality Index and the Gender Empowerment Index, the World Economic Forum’s Gender Gap Index, the Economist Intelligence Unit’s Women’s Opportunity Index and the Gender Equity Index by Social Watch.

The map by the MPI’s Zara Matheson shows how the nations of the world stack up on the overall GWI. 

Several clear patterns are immediately noticeable from this map.

  • The Scandinavian and Nordic countries are hands down the best places for women. Sweden ranks first, Norway is second, Finland third, followed by Denmark and Iceland. The Netherlands, Germany, New Zealand, Belgium and Australia round out the top ten.
  • The U.S. is 16th, behind Spain, Canada, the U.K., Portugal, and France.
  • The BRIC nations may be growing rapidly, but they still have a long way to go as far as the treatment of women is concerned. Russia is 43rd, China 61st and Brazil 70th. While we don’t have enough data to calculate a GWI score for India, it ranks 84th on The Economist’s Women’s Opportunity Index.
  • At the other end of the spectrum, Yemen, Saudi Arabia, Pakistan, and Iran rank lowest, at the very bottom on the GWI.  

It stands to reason that women will face less discrimination and have more opportunities in more advanced, affluent and democratic nations. But other factors are at work as well. My own research and that of others has begun to trace the connections between economic output and cultures that are more tolerant and diverse. 

Mellander and I looked especially at the associations between the GWI and key indicators of economic development, innovation and human capital.  As always, it's important to note that correlation does not necessarily imply causation, which is likely to go in both directions. Our indicators of the treatment of women may also reflect other characteristics of these societies. Still, the associations we found are reasonably strong and consistent, and can help illuminate the connection between the treatment of women and broader patterns of economic and social development.

Not surprisingly, the economic and social status of women improves alongside the level of economic development. The GWI is closely correlated with economic output per capita (a correlation of .74). Three key elements of economic growth and development are the level of productivity, innovation and new entrepreneurial firm formation. Nations that afford women more equal treatment perform better on each of these measures.

The GWI is closely associated with the level of innovation (measured as patents, .57) and also with research and development efforts (measured as R&D scientists per capita, .73). Levels of entrepreneurship and new firm formation are also higher in nations where women fare better. The GWI is closely associated with a comprehensive measure of firm formation, the Global Entrepreneurship and Development Index or GEDI (.75). Productivity is also higher in countries where women enjoy greater economic and social opportunity. The correlation between the GWI and total factor productivity is .72.

What about the notion that post-industrialism is tilting the playing field more in favor of women? Our findings suggest that that is indeed the case.

  • Nations where women have more opportunity and face less inequality have higher levels of human capital and more knowledge-based economies. An average level of human capital (or education) is closely correlated with the GWI (.76).
  • The correlation is closely correlated with the creative class share of the workforce, which includes scientists, engineers, techies, innovators and researchers, as well as artists, designers, writers, musicians and professionals in healthcare, business and finance, the legal sector, and education. The correlation between the two is the same as for human capital (.76).
  • Conversely, women have less opportunity and face greater inequality in nations with higher shares of blue-collar jobs. There is a negative correlation between GWI and the working class share of jobs (-.24).
  • The treatment of women also reflects levels of tolerance, openness, and diversity in a society. The GWI is positively associated with more tolerant attitudes toward racial and ethnic minorities (.40) and even more so with tolerant attitudes toward gays and lesbians (.70). 

Finally, nations where women are treated better have higher levels of happiness and subjective well-being. The GWI is closely associated (.65) with well-being, as measured by Gallup’s World Poll.

In a recent NBER study, economist Esther Duflo took a close look at the relationship between women's empowerment and economic development, concluding that:.

Women empowerment and economic development are closely related: in one direction, development alone can play a major role in driving down inequality between men and women; in the other direction, empowering women may benefit development. Does this imply that pushing just one of these two levers would set a virtuous circle in motion?

This paper reviews the literature on both sides of the empowerment-development nexus, and argues that the inter-relationships are probably too weak to be self-sustaining, and that continuous policy commitment to equality for its own sake may be needed to bring about equality between men and women.

The logic of economic development, innovation, and the knowledge-based economy points us in the direction of greater empowerment, more opportunity and fairer treatment of women across the globe. But we also must remain committed to equality for women as well as for other historically discriminated against groups in our quest to achieve a fairer, most just and prosperous society.

Richard Florida is Co-Founder and Editor at Large at The Atlantic Cities. He's also a Senior Editor at The Atlantic, Director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management, and Global Research Professor at New York University. He is a frequent speaker to communities, business and professional organizations, and founder of the Creative Class Group, whose current client list can be found here. All posts »

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