This article first appeared in Forum, The Edge Malaysia Weekly on May 1, 2017 - May 7, 2017

There is a clear link between the participation rate of the female labour force — the percentage of women aged 15 and above who are working or actively looking for work — and the level of economic development.

Statistics show that women’s participation in the labour market is not a sufficient condition for the level of development, that is, a high participation rate does not imply a high level of development. But statistics also show that most high-income economies have a relatively high women’s participation rate in the labour force.

Many poor African and Asian countries have high participation rates too. East Asian countries generally have a high percentage of working women. As a group, their participation rate of more than 60% is higher than the world average of 50%. South Asian countries, however, have a much lower participation rate of about 30% while the Middle-Eastern countries have the lowest level of just about 20%. Some affluent 

European economies, such as Switzerland, Holland and Sweden, have rates that are similar to or even higher than that of East Asian countries.

The work-leisure trade-off is well known and this dynamic is partly at work in explaining some of these numbers. The opportunity cost of leisure and even time to further one’s education is very high in poorer countries, which explains why many poor countries have high female participation rates — women are forced to work by necessity. Women in developed economies can delay their entry into the labour market or choose not to enter it at all because of their comfortable economic circumstances but overall, their participation is relatively high and they contribute significantly to the aggregate economic numbers.

There is therefore a U-shaped curve if one plots female participation rates vertically against per capita income levels. Poor economies have a high proportion of working women, which declines as income levels rise but goes up again beyond a certain income level. This is why high-income Scandinavian and European economies, such as Germany, have a high proportion of working women.

The low participation rates of South Asian and particularly Middle-Eastern countries require another explanation. Why are women not working if their economic circumstances are dire as is the case in many African or Asian countries? Is it because girls are married off at a younger age and are therefore unable to enter the labour market? Perhaps, they do not have access to schools or leave school early, which would also prevent them from entering the labour market. Perhaps, many women in these societies are working but are trapped in the informal sector and not captured by statistics.

There is something to be said about a society’s values and how it treats its women — at home, in the workplace and in the laws it enacts. Collectively, the resulting discriminatory and inequitable treatment of women, which starts from the treatment of girls, result in economic backwardness.

Somehow, without sounding flippant about the complexities of inter-relationships, economic backwardness reinforces the very values that brought about these misogynistic attitudes. We have seen examples of economic marginalisation pushing people to seek answers in all the wrong places. But such ignorance becomes a breeding ground for intolerance, which then leads to extremism, and the dynamic feeds on itself, spiralling downwards.

Misogyny has, at its root, the objectification of women as simply sexual objects, a denigration of their status as human beings; as partners, colleagues and collaborators and their potential as creators, innovators and entrepreneurs. A dismissive attitude towards the potential of women as individuals can be seen in how their role is limited primarily to that of child bearing and rearing.

Malaysia is quite unique in this sort of discussion. The number of Malaysian girls exceeds that of boys in the education system, from primary school right up to tertiary level. This is also indicative of better performance by girls as progression in education is indicative of performance. There are more young ladies than young men in our universities and therefore more academically trained women than men coming from tertiary institutions. Up to this point, the gender gap points to a male instead of a female problem but it reverses quickly and worsens as women enter the job market.

The World Bank issued a special report in 2012 — somewhat dated but still relevant — on the gender gap in Malaysia that highlighted some of the issues pointed out here. The report found that despite the advances in access to education and a reversal in gender gap in education enrolment, only 46% of Malaysian women of working age are found in both the formal and informal sectors or are looking for work. This is significantly lower than in countries whose income levels are at or above Malaysia’s. It is also lower than in other countries in the region.

The attrition rate among women is also high once they are in the labour market. The women participation rate in Malaysia is a single-peaked distribution compared with the double-peaked one found in most countries. Typically, the participation rate peaks when women are in their twenties and declines slightly as most women get married and have children. The rate gradually increases again and peaks when women are in their forties before declining again.

In Malaysia, the participation rate peaks in the twenties and declines thereafter to rates that are lower than in many countries at retirement age. Marriage is strongly associated with a lowering of participation in the labour market.

The report estimated the number of Malaysian women “absent” from the labour force at the time. This is a relative measure in comparison to countries with a selected target rate. For example, compared with Indonesia, whose participation rate is higher than Malaysia’s at about the global average of 53%, there are 570,000 “absent” Malaysian women — the additional number of Malaysian women who should be working to equal Indonesia’s rate. Compared with high-income economies, such as Singapore and Canada, the number gets larger at about 1.4 million and 2.3 million respectively.

What these numbers are suggesting is that the Malaysian economy is operating well below its potential because a sizeable part of its human resources is not being utilised, thus translating into income losses both at the aggregate per capita level as well as at the household level. The report estimated that Malaysia’s gender gap resulted in a staggering 23% loss of per capita income.

The economy, as a whole, from parents to public institutions, allocates significant resources to educate girls — an effort to enable them to realise their true potential as individual human beings, and to enable them to enter the labour market if they choose to do so. But the economy does not benefit from these resources because about half of them are not in the labour market to start with, and that rate declines as they age.

Given that women represent the better half of the country’s human resources, the economy is therefore churning at far below capacity. It is not just the loss of labour input but also the loss of potential entrepreneurship and creativity to the economy.

Economic potential and growth and therefore household income can all be improved by facilitating women’s entry into the labour market, but many things need to change for that to happen: changes in the workplace to support working mothers and equalising pay for women as well as supporting their career path development. There is clear evidence that men command higher returns on tertiary education than women with the same qualification. Apart from changes in attitude, there should be changes in laws relating to equal work and equal pay.

Women’s designated role of raising children is also a strong explanatory variable for the wage differentials. Men see themselves as the breadwinner, although their potential earnings may be lower than those of their wives. Such misplaced “machismo” in men that is not backed by commensurate human capital lowers household income to the detriment of the whole family. The male role in bringing up the children should also undergo some adjustments.

If we allow misogyny — no matter how it is dressed up by religious edicts or cultural norms or even political ideologies — we will not be caught by the so-called middle-income trap. We will gradually decline as an economy, relegated to those that are on the wrong side of the U-curve mentioned earlier.

As it is, we are already beginning to see worrying signals in the labour market, as pointed out by the World Bank report. 

Instead of reversing the worrying trend, we are witnessing increasing misogynistic attitudes being displayed.

The debate in Parliament recently on sexual crimes was distasteful and some of its depraved logic sickening. If such attitudes and values are reflective of the larger society, then we are in for a downward slide. I expected the women in government to be the strongest voice against such sexist and misogynistic attitudes but that was not totally forthcoming. Women are, however, a potent political force should they make gender equity a political issue, one that makes a lot of economic sense.
 

Dr Nungsari Radhi is an economist and managing director of Prokhas Sdn Bhd, a Ministry of Finance advisory company. The views expressed here are his own.

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