Women's Economic Opportunity Index - Economist Intelligence Unit

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Appendix IWomen’s economic opportunityA new global index and rankingFurther ReadingCapital Access for Women: Profile and Analysis of U.S. Best Practice Programs. Urban Institute: WashingtonDC, 2006. http://www.kauffman.org/entrepreneurship/capital-access-for-women.aspxWomen Entrepreneurs and Access to Finance: Global Profiles from Around the World, InternationalFinance Corporation: Washington DC, 2006. http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_GEM_WomenEntrepreneursFinance/$FILE/Women+Entrepreneurs+and+Access+to+Finance.pdf3) Education and Training78. See D Dollar and R Gatti(1999). The World BankDevelopment Research Group/PREM Network. Also, for latesttrends see: UNESCO, EducationFor All - Global Monitoring Report2009, available at www.unesco.org.79. G Psacharopoulos and H APatrinos, “Returns to Investmentin Education: A Further Update”,Education Economics, Vol. 12,No. 2, 2004, pages 111-134.80. ibid.81. T P Schultz, “WhyGovernments Should InvestMore To Educate Girls”, WorldDevelopment, Vol. 30, Issue 2,February 2002, pages 207-225.82. H Patrinos and GPsacharopoulos, “Returns toEducation: An InternationalUpdate”, Human DevelopmentNetwork, World Bank:Washington, DC, 2007(unpublished).83. H Patrinos, Returnsto Education: The GenderPerspective, 2008. Also,Christopher Dougherty, “Why Arethe Returns to Schooling Higherfor Women Than for Men?”Journal of Human Resources, Vol.40, No. 4, 2005, pages 969-988.84. C Dougherty (2005), op. cit.85. T Kurosaki and H Khan,“Human Capital, Productivity,and Stratification in RuralPakistan”, Review of DevelopmentEconomics, Vol. 10, No. 1,February 2006, pages 116-134.86. UN Educational, Scientificand Cultural Organisationwebsite: http://www.unesco.org.Primary and secondary Education, womenThe literature on the impact of human capital on individual economic returns shows unequivocally thatthere is a positive effect of education on individual productivity and wages. Dollar and Gatti (“GenderInequality, Income, and Growth: Are Good Times Good for Women?”, 1999) found that an extra year ofschooling could increase individual earnings by 10%. 78 In estimates of Mincer earnings functions for 98countries, average returns for additional years of schooling were found to be above 17% worldwide, andare systematically higher in developing countries. 79 For girls, one extra year of schooling results in anaverage return of 9.8% in wages down the road, compared with 8.7% for men, although results vary bycountry. 80 Overall, empirical evidence from around the world shows that the social returns to the years ofschooling of females are greater than the return to males. 81Although returns on girls’ primary education in developing countries appear to be lower than forboys’, women get a greater return on secondary education than men. 82 The lower return to girls’ primaryschooling in developing countries is puzzling for researchers, as the opposite is found in most transitioncountries. Patrinos and others posit that discrimination and other factors could cause women to acceptlower wages. 83 Better-educated women (with secondary education) may be more able and willing toovercome discrimination and compete with men in the labour market, or there could be male-femaledifferences in the quality of schooling.In more developed economies such as the US, it has been found that more education for women has adual effect on women’s earnings. 84 It increases women’s skills and productivity, and it reduces the gap inmale and female earnings attributable to discrimination. Dougherty finds that discrimination accounts forabout half of the differential in the returns to schooling.Education also positively affects self-employment and entrepreneurship. One study in Pakistan showsthat returns to non-farm enterprises grow by 30-35% when household members working at the enterprisehave secondary education attainment. 85 The influence of education is different across countries, sectorsand education levels, but its positive effects are generally confirmed by virtually all cross-countrycomparisons. 86117 Economist Intelligence Unit 2010
Appendix IWomen’s economic opportunityA new global index and rankingFurther ReadingM Tembon and L Fort (eds.), Girls’ Education in the 21st Century: Gender Equality, Empowerment and Growth(Directions in Development), World Bank: Washington DC, 2008.D Abu-Ghaida and S Klasen, “The Economic and Human Development Costs of Missing the MillenniumDevelopment Goal on Gender Equity”, World Development , Vol. 32, Issue 7, July 2004, pages 1075-1107.87. Based on internal rates ofreturn analysis. R Boarini andH Strauss, “The Private InternalRates of Return to TertiaryEducation: New Estimates for21 OECD Countries”, OECDEconomics Department WorkingPaper No. 591, OECD Publishing,2007. http://dx.doi.org/10.1787/031008650733.88. G Psacharopoulos and H APatrinos, “Returns to Investmentin Education: A Further Update”,Education Economics, Vol. 12,No. 2, 2004.89. T Kurosaki and H Khan,“Human Capital, Productivity,and Stratification in RuralPakistan”, Review of DevelopmentEconomics, Vol. 10, No. 1,February 2006, pages 116-134.90. “Key Indicators 2007:Inequality in Asia”, AsianDevelopment Bank: Manila,2007.91. J R Behrman, N Birdsall andM Szekely, “Economic Policyand Wage Differentials in LatinAmerica”, Centre for GlobalDevelopment Working Paper 29,Washington DC, 2003.92. S Blondal, S Field and NGirouard, “Investment in HumanCapital through Upper Secondaryand Tertiary Education”, OECDEconomic Studies, No. 34, 2002/I, OECD: Paris.93. M Aslam, G Kingdon andM Soderbom, “Is Education aPath to Gender Equality in theLabour Market? Evidence fromPakistan”, in M Tembon and LFort (eds.), Educating Girls forthe 21st Century: Gender Equality,Empowerment and EconomicGrowth, World Bank: WashingtonDC, 2008.Tertiary Education, womenBeyond primary and secondary education, higher learning has a large impact on earnings and jobprogression, especially for individuals employed in the non-farm sector. For OECD countries, the averageindividual returns of an additional year of tertiary education are 8-11%, 87 and this is even higher for manydeveloping countries where studies have been conducted. 88 For example, in rural Pakistan, non-farmwages of those with tertiary education are 49% higher than those of the uneducated, and 30% highereven when comparing between individuals with the same kind of job. 89 Furthermore, in India, Indonesia,the Philippines and Vietnam, the wage gap between those with a tertiary education and those withoutis rising significantly. 90 Evidence from Latin America suggests that returns from secondary and tertiaryeducation are going up more rapidly than those from primary education. 91An OECD study shows that workers with tertiary education are more likely to participate in the labourmarket, and have longer active working lives. This is especially true for women, where the gap in labourforce participation between women with upper secondary and tertiary education is wider than for men.The effects of education on female labour force participation are relatively wide in all age groups studied(25-64 years). 92In Pakistan, women get far more economic returns on education (defined as earning increment from anextra year of schooling) than for men in all occupations except agriculture. Therefore, education reducesgender gaps in earnings. However, women’s participation in the labour market increases only after tenyears of education—and only about 10% of Pakistani women have had ten or more years of education (asof the early 2000s). 93Further ReadingStephen Machin and Sandra McNally, “Tertiary Education Systems and Labour Markets”, commissioned bythe OECD Education and Training Policy Division for the Thematic Review of Tertiary Education, OECD: Paris,2007.Education For All - Global Monitoring Report, published annually by UNESCO since 2002. http://www.unesco.org/en/efareport/reports118 Economist Intelligence Unit 2010
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