Poverty and Income Inequality Research Paper

Poverty Income Inequality and Female Labor Market Participation

1.0. Introduction

1.1. Problem Statement

Today's global inequality and poverty is an outcome of two successive centuries of unequal progress, and eradication remains one of the greatest global challenges. The 2020 Global Multidimensional Poverty Index (MPI) identified that 22 percent of the world population (1.3 billion people) live with multi-dimensional poverty, with 42 percent living in Sub Saharan Africa and 41 percent living in South Asia. Every multidimensionally poor person is deprived of multiple poverty indicators which include health, education, and standards of living indicators, which include cooking fuel, drinking water, sanitation, electricity, housing, and asset ownership (UNDP, 2020). The different levels of poverty and income inequality are a manifestation of differences in gender labor participation. According to the International Labor Organization estimates, the women labor force participation rate of 49% is disproportionately lower than the men labor force participation rate of 75% and the world labor force participation rate 62 %, implying that more women are predisposed to multi-dimensional poverty due to unemployment (ILO, 2017). The pervasiveness of the gender gaps in the labor market necessitates key policy intervention. To address the women's labor participation gaps, key policy intervention is social protection policies such as flexible working environments, childcare support, various forms of leave. Gender-specific social protection interventions that address vulnerabilities and inequalities have been identified as pivotal policy actions for addressing poverty reduction and income inequality, particularly gender parity inequalities.

1.2. Background Information

The exclusion of women from the labor market hinders an economy's full potential for economic development. Empirical evidence demonstrates that women's participation in the labor market is fundamental in inclusive economic growth (Cipollone et al., 2014). An analysis of the European Union estimates 2.8% of the EU's Gross Domestic Product (GDP) (€370 billion) as the total cost of a lower female employment rate. The low participation of women in the formal labor market is complemented by their over-representation in low productivity informal sectors that have no defined labor protection legislation policies and social security policies, resulting in overall lower rates of social security coverage among women.

Globally the population of women participating in the formal market remains comparatively low. Overall, the world recorded a decline in the global female labor force participation rate (age group 15+), decreasing to 48.5% by 2018 from 51.3%. There exists a high disparity in female labor participation, with the middle east recording the least female labor force participation while East Asia records the highest female labor participation rate. Notably, North Africa, Latin America and Caribbean, and Sub Saharan Africa recorded an increase in female labor participation rate with the other regions recording a decline (Figure 1 below).

Figure 1: Estimates of Female Labor Force Participation Rates (15+ years)

Globally, only 35 countries have realized gender parity in education, with developing countries having low education attainment for the girls. Worldwide, it's estimated that 1 in every ten girls aged 15-24 is illiterate. The underrepresentation of women in highly skilled subjects such as Science, Technology, and Mathematics (STEM) constraints their wage earnings. Women remain underrepresented in political, social, and corporate leadership. Women hold only 20% of the board director positions globally, and 36% of the public sector official and private sector managers (ILO, 2016). The International Labor Organization identifies social norms and structural barriers are the main contributing factors to the gender wage gap. Societal defined gender roles such as caregiving, which disproportionately falls on women, constrain female participation in the labor market. It's estimated that across OECD, women spend an average of 3-6 hours in unpaid care while men spend 0.5-2 hours in unpaid care (ILO, 2017). The extant literature demonstrates that addressing the gendered barriers to market participation has positive effects on the female labor market participation. Child grants transfers to finance daycare expenses, for example, incentivize the re-entry of women into the labor market (Cipollone et al., 2014).

Social protection programs have been identified to address the gender imparity gap…

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…the model explains the hypothesized phenomenon. The pseudo" R2 is a measure of the reduction of the "error variance." With an outcome of less than 0.5 implying the need, the Pseudo R^2 indicates that the variance is explained by other variables, not in the model, hence the need for revision of the independent variables considered on the analysis.

Ethical Outcome of Research

Researchers are faced with the ethical dilemma of emphasizing positive results over the negative results (Cipollone et al., 2014). While unexpected, negative, or null results from the analysis may be indicative of unsuccessful research or errors in the research design, which would potentially ruin the reputation of the researcher, disseminating such results is critical for shaping new research and generating more scientific knowledge. Moreover, failure to disclose the nonconventional results would perpetuate erroneous conclusions. A possible negative ethical outcome of the proposed social protection intervention is that the overall cost of the intervention outweighs the anticipated aggregate increase in women labor market participation. Failure to disclose such an outcome would result in the perpetual implementation of the social protection interventions that would have a negative long-term impact on economies.

Discussion & Conclusion

Empirical evidence demonstrates that women's labor participation rates could be increased through social protection programs. In addition to increased women participation, social protection contributes to positive health care and education outcomes for the household members, which positively contributes to intertemporal welfare gains such as human capital formation. It's, however, critical that the policy interventions are designed to buffer against intended effects such as inducing beneficiaries from labor participation to be fit the eligibility criteria for social protection programs, which has a negative and long-term socio-economic impact.

Women account for almost 50% of the world's working-age population. Yet, only 49% of the women participate in the formal labor market (ILO, 2017), which imposes a high cost to the global economy. Empirical evidence demonstrates that gender parity in the labor market contributes to welfare gains through increased consumption, increased…