Women's Economic Opportunity Index - Economist Intelligence Unit

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Women’s economic opportunityA new global index and rankingcapture information that research shows is important to women’s economic opportunity but for whichthere are no globally comparable data, such as access to childcare and the availability of training forwomen running small and medium-sized enterprises (SMEs). The determinants of women’s economicopportunity are listed in the Scoring criteria and categories section (page 10), and are discussed in thePotential drivers of women’s economic opportunity part of this report (page 12). They are reviewed ingreater detail in Appendix I, which provides supporting literature (page 103), and in Appendix II, whichexplains scoring and coding (page 127) .The result is a new ranking of economic opportunity for women in 113 economies. Sweden, Belgiumand Norway occupy the top spots in the Index. These countries have particularly open labour markets forwomen, high levels of educational achievement, and liberal legal and social regimes. However, the indextells other stories as well. Hong Kong (China) performs best in the Asia region, ranking in the top 25%in most categories. Mauritius is Africa’s best finisher; its labour policies are among the most favourableto women in the region. Excluding Canada and the US, Brazil edges Chile and Mexico for the best scorein the Americas. Eastern European countries, especially Bulgaria, have particularly balanced labour-lawprotections, although retirement ages for men and women are often different. Tunisia comes first inNorthern Africa, and Sri Lanka in Southern Asia.The index reveals laggards as well as leaders. Chad, Yemen and Sudan fill the bottom three spots inthe index. Only 20% of women in Chad can read and write, and teenage girls are more likely to becomepregnant there than anywhere else.The 26 indicators in the index were selected from among hundreds of choices. Topic-specific workinggroups—on labour policy and practice, for example—were assembled to review the options and makerecommendations. Although the choice of indicators involved an element of subjectivity, the extensiveliterature on women’s economic empowerment pointed in important directions. For example, researchsuggests that the guarantee of maternity leave, particularly paid leave, will raise women’s participationin the labour force before giving birth and increase the likelihood of a return to work when the leaveends (see Appendix I). However, who pays the benefits also matters, since employers are more likely tohire women if maternity leave is provided under a universal system financed by taxes or insurance thanthrough one in which the employer shoulders the full amount. Hence, a sophisticated maternity leaveindicator has been included in the benchmarking model that takes into account both these aspects,as well as the length of maternity leave provided. Although the determinants of women’s economicopportunity are not understood perfectly, metrics were included from every step of the social andeconomic value chain—from primary education and adolescent fertility to financial access and differentialretirement age.No index of this kind can ever be perfect. This one focuses entirely on the formal sector—jobs thatusually have set hours and agreed levels of pay, and that are reflected in national accounts. Many women,especially in lower-income economies, work in the informal sector, where activity is often untaxed andnot usually counted by the authorities, but also where labour rights and contracts cannot be enforced.While informal employment can lead to short-term gains, these may be outweighed by informality’s longtermnegative impact on economic growth and job creation. For example, a study in Mexico found that5© Economist Intelligence Unit Limited 2010
Women’s economic opportunityA new global index and ranking1. J R de Laiglesia, R Bazillier, RS Parker, U Quijano, A Saracho,A Scorza and V Scorza, “Workand Well-Being in Mexico:Integrating the Employmentand Social DevelopmentAgendas”, draft report preparedfor the Mexican Ministry ofSocial Development, OECDDevelopment Centre: Pairs,2008. Cited in Is InformalNormal? Towards More and BetterJobs in Developing Countries,OECD Development Centre: Paris,2009.women moving from informal to formal employment enjoyed a significant increase in earnings. 1 Even so,including only the formal sector almost certainly understates the economic opportunities for women inpoorer countries. Yet the absence of reliable data on informal employment made it impossible to include aquantitative evaluation of this type. Future editions of the Index will probably take greater account of theinformal sector.The indicators in this Index are embedded in a model that offers a wide range of analytical tools,allowing a deeper investigation of the standing of women globally. Users can, for example, restrict theiranalysis to include only low-income or middle-income countries (see the tables that follow), or just thosein a particular region. Any two countries may be compared directly, and correlations between indicatorscan be examined. Each country can also be profiled, permitting a deeper dive into the structure ofwomen’s economic opportunity. Importantly, the weights assigned to each indicator can be changed toreflect different assumptions about the importance of categories and indicators. The model also allowsthe final scores to be benchmarked against external factors that may potentially influence women’seconomic empowerment. For example, many of the countries that offer the best opportunities for womenare also among the world’s most democratic.Indeed, this new index is intended to spur further debate on the drivers of, and constraints on,women’s economic opportunity. The results ultimately were validated against existing externalbenchmarks, such as the ratio of female-to-male participation in the labour force. The scores were alsocorrelated against other standards of women’s achievement, such as the UN Development Programme’sGender Empowerment Measure. The index was reviewed at critical stages by a peer panel of internationaldevelopment and gender experts.The index breaks new ground by focusing specifically on a country-by-country comparison of economicopportunities for women, going beyond a measurement of gender gaps. For that reason it includesan assessment of the national business environments in which women must function. The index alsobuilds on well-established legal codes, such as the ILO’s annual evaluation of equal-pay conventions;in this case, the project team created a scoring scheme based on the ILO’s written assessments. Entirelynew qualitative measures were also created, including an Economist Intelligence Unit assessment ofwhether customary practice overrides statutory law in matters of gender equality, specifically in propertyownership. Owning property can increase a woman’s access to credit, and may confer broader social andeconomic benefits, including enhanced food security, wealth, authority and a greater propensity to makeinvestments in land or property.A final goal of the Women’s Economic Opportunity Index is to promote the collection of comparable,sex-disaggregated data that will encourage further research and dialogue on the binding constraints towomen’s economic opportunities. This is a pilot project; future indices will look to include a wider groupof countries; time and data availability limited geographic reach for this first effort. Even so, we havechosen a representative sample from each geographical region to be as inclusive as possible and allow forcross-country comparisons. New and better data sources will also be considered as they become available.For now, this index opens a window on to the landscape in which women live and work, acknowledgingcountries that are coming closer to full equity and challenging those that still have work to do.6© Economist Intelligence Unit Limited 2010
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Appendix IWomen’s economic opport
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Appendix IISources and definitionsW
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Appendix IIIPrincipal componentsana
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Cover image: Russ StreetWhilst ever
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Women's Economic Opportunity Index - Economist Intelligence Unit

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