August 2012 74103 Latin America and Caribbean Poverty and Labor Brief THE EFFECT OF WOMEN'S ECONOMIC POWER in Latin America and the Caribbean Latin America and Caribbean Poverty and Labor Brief THE EFFECT OF WOMEN'S ECONOMIC POWER in Latin America and the Caribbean August 2012 Note: the symbol indicates that it requires an internet connection to use the interactive figure © 2012 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org The Effect of Women’s Economic Power in Latin America and the Caribbean This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. eISBN: 978-0-8213-9770-1 4 Table of Contents Acknowledgments.................................................................................................................................................................. 8 Executive Summary................................................................................................................................................................ 9 Introduction.............................................................................................................................................................................. 12 1. A good decade for women, a good decade for LAC.............................................................................................. 15 2. What is behind the growing contribution of women?.......................................................................................... 19 3. Emerging vulnerabilities and persistent challenges.............................................................................................. 23 Final Remarks and policy considerations....................................................................................................................... 34 References.................................................................................................................................................................................. 37 Annex........................................................................................................................................................................................... 39 LIST OF FIGURES Figure 1. 2002 is a watershed year for growth and poverty reduction in LAC (circa 1990-circa 2010)........................................................................................................................................................... 12 Figure 2. Inequality reduction accelerates in 2003..................................................................................................... 13 Figure 3. Falling Labor Income Poverty Indices suggest poverty reduction continues through 2011....................................................................................................................................................... 13 Figure 4. Female income contributed 30% to extreme poverty reduction (2000-2010, $2.5) .................................................................................................................................................................... 15 Figure 5. Female income was particularly effective in reducing the severity of poverty along with transfers (2000-2010)................................................................................................................. 16 Figure 6. Men in the labor market were more vulnerable to the crisis than women (2005-2010, $2.5 USD/PPP) ..................................................................................................................... 17 5 Figure 7. Female earnings contribute almost one third of inequality reduction in LAC (2000-2010)................................................................................................................... 17 Figure 8. Households highly dependent on female income are associated with better school enrollment rates (2010)................................................................................................................... 18 Figure 9. The gross gap in labor market earnings between men and women fell in most LAC countries (aged 15-64) (2000, 2010)................................................................................................. 20 Figure 10. Rising female labor force employment rates (aged 15-64) (2000 to 2010)........................................................................................................................................................................... 20 Figure 11. More low-income women were entering the labor force compared to high-income women (change in employment rates for women aged 15-64) (2000 to 2010)........................................................................................................................................................................... 21 Figure 12. The returns of experience in the LAC labor markets are more favorable to females than males..................................................................................................................... 21 Figure 13. Enrollment rates increased for both males and females, although females still have higher enrollment in secondary and tertiary education in LAC (2000, 2010)........................................ 22 Figure 14. Both men and women experienced important gains in life expectancy and reductions in mortality rates in LAC (2000, 2010).......................................................... 23 The Effect of Women’s Economic Power in Latin America and the Caribbean Figure 15. Men and Women ethnic minorities’ contribution to poverty reduction in Brazil (2000-2010).................................................................................................................... 24 Figure 16. Percentage of women and men in each occupation in Brazil............................................................ 26 Figure 17. The Gender gap in years of education by occupation in Brazil is declining for some top professions.............................................................................................................................. 26 Figure 18. Rising gender gaps, especially for top paid occupations (2000, 2010)........................................... 27 Figure19. Physical partner violence against women, ever and in the past 12 months......................................................................................................................................... 28 Figure 20. Intergenerational trap: Prevalence of partner violence, by history of abuse against mother.................................................................................................................................. 29 Figure 21. Adolescent fertility has declined more slowly in LAC than SSA and SA (1997-2010)............................................................................................................................... 30 Figure 22. Comparing the traditional definition of male headship to economic headship (2010)............................................................................................................................................ 32 Figure 23. Who is the bread winner? Household’s headship and extreme poverty reduction (2000-2010)................................................................................................................ 32 Figure 24. Economic household’s headship and dependency ratio (2010)....................................................... 33 6 ANNEXES Table A1. Survey by country and years............................................................................................................................ 39 Figure A1. Compare women’s contribution to poverty reduction in rural and urban areas (2000-2010, $4)....................................................................................................................................... 40 Figure A2. Labor income was more important in LAC’s Growing Urban Areas than in Rural Areas (2000-2010, $2.5).............................................................................................................................. 41 Figure A3.Household’s headship and moderate poverty reduction (2000-2010) (urban, rural, urban with kids)............................................................................................................................................ 41 Figure A4.Percentage of male adults by economic household’s headship in LAC (2010)......................................................................................................................................................... 42 Figure A5.Household’s size by economic household’s headship in LAC (2010) (urban, rural, urban with kids)............................................................................................................................................ 42 Figure A6.Percentage of children (under 15) by economic household’s headship in LAC (2010) (urban, rural, urban with kids)............................................................................................. 43 Figure A7. Percentage of elderly (over 64) by economic household’s headship in LAC (2010) (urban, rural, urban with kids)............................................................................................. 43 Figure A8.Gender gap in average age in each by occupation in Brazil............................................................... 44 Figure A9.Acceptability of wife-beating (percentage of women who said that wife-beating is justified for at least one reason)................................................................................................. 44 Figure A10.Mother’s age at first birth and labor income (by mother’s birth cohort)..................................... 45 Figure A11.Where do teen mothers live (by mother’s birth cohort)..................................................................... 45 Figure A12. Percentage of household in each category of share of woman participation in the household income – Circa 2000 and 2010........................................................ 46 BOXES Box 1. Ethnic minorities have been a key force behind the reduction of poverty in Brazil.................................................................................................................................................................. 23 Box 2. Gender Based Violence and Teen Pregnancy – manifestations of low agency........................................................................................................................................................................... 28 Box 3. Towards an Economic definition of head of household............................................................................... 31 7 Acknowledgments T his brief was produced by the Poverty, Gender on a regional microdata harmonization effort (called The Effect of Women’s Economic Power in Latin America and the Caribbean and Equity Unit from the Poverty Reduction SEDLAC) to increase cross-country comparability and Economic Management Team (LCSPP) in of selected variables from the official household the Latin America and Caribbean Region. Led by Joao surveys. Given this objective, often the indicators Pedro Azevedo and Louise J. Cord, the team included constructed through this process are different from Andrés Castañeda, Tania Diaz Bazan, Carolina Diaz- official statistics reported by Governments and Bonilla, Gabriel Facchini, Marta Favara, Alexander National Offices of Statistics. Such differences should Krauss, Ana Luiza Machado, Cesar Mejia, Mirian not be interpreted in any way as an indicator of Muller and Viviane Sanfelice. The team benefited methodological superiority as both numbers depart from comments from Alessandra Guedes, Luis-Felipe from different, yet equally important and valid, Lopez-Calva, Julian Messina, Maria Beatriz Orlando, objectives: regional comparability and best possible Marcela Sanchez-Bender and Carolina Sanchez- national representation. The welfare aggregate used Parmo. The numbers presented in this brief are based in this study is income based. 8 Executive Summary F or the last decade economic growth in Latin America and the Caribbean (LAC) has sharply accelerated, pushing poverty and inequality to historic lows in the most unequal region in the world. Even a global economic downturn and a four- in Latin America and the Caribbean would have been 30 percent higher in 2010. In other words, 17.7 percent of the population in the region would have been below the extreme poverty rate, compared to the actual 14.6 percent. Female labor market percent contraction in the regional economy in 2009 income contributed 30 percent of the reduction in could not stop the region’s progress and its significant extreme poverty, compared to 39 percent for male reductions in inequality. labor market income, while the remainder was due to public and private transfers (remittances, cash In 2012, as the world’s ongoing economic problems transfer programs, etc.). make optimistic predictions less certain and threaten to undermine gains against poverty and inequality, The contribution made by women to both extreme it is critical to better understand the structural forces and moderate poverty reduction helps explain why that have promoted recent positive social outcomes. this century’s first decade was good both for LAC These include more inclusive labor markets, expanded generally and females in particular. Growth in women’s safety nets, improved educational outcomes, macro- labor market earnings and higher participation rates, stability and relatively high rates of growth. particularly among poorer women, along with the introduction of non-contributory pension programs Executive Summary This report explores how women have played a for women, explain the important role of women in critical role in achieving the poverty declines of the reducing the region’s poverty in the last decade. Labor last decade, with their labor market participation market income from both men and women was the rates growing 15 percent from 2000 to 2010. It further greatest force behind the region’s decline in inequality considers how future progress will require increased since 2000, with transfers contributing just over a third female economic power and more effective policies to of the decline (36 percent). The increased engagement promote it. of women in labor markets was critical to the fall in the Gini coefficient, driving it down the regional average If female labor income had remained the same during by almost a third during the last decade. this period, holding all else constant, extreme poverty 9 Together with public and private transfers (which real opportunity for all children to attend regularly, cannot be attributed to any specific gender within has been limited to those between six and 15 years the household), female income proved to be crucial old. But rates of pre-school and upper secondary to reducing the pressures on the poorest of the poor, enrollment have been rising, closely linked to higher during the 2009 crisis. As male labor income declined rates of household dependency on female income. In due to the economic contraction, female participation Brazil, for example, it was between 7 and 14 percent in the labor market became a key component to more likely for children in households dependent help household’s cope with economic shocks, upon female labor income to be enrolled in preschool while demonstrating the increased vulnerability of and secondary school, respectively, compared to households that relied strictly on male income. those households dependent on male labor income A focus on women’s participation rates, especially or transfers. those of low-income women, is fundamental for understanding the significance of the increase in Despite the impressive role in LAC’s poverty reduction female labor earnings. Greater female labor force played by the growth of women’s economic The Effect of Women’s Economic Power in Latin America and the Caribbean participation was most pronounced among low- contribution, several key challenges remain which income women, a fundamental insight into LAC both affect women and potentially undermine poverty reductions in extreme poverty and its severity. reduction. These include: labor market segmentation, wage gaps, and agency, the latter understood as the Increases in female labor income and female ability to make choices and to transform them into labor market participation appear to reflect both desired outcomes. higher enrollment rates and a closing gender gap in education. In the last decade, gender gaps in Particularly in top professions, compensation for education have closed and even reversed in many women and men appears to remain unequal, with countries in Latin America and girls now have higher women in Chile, Brazil, Mexico and Peru facing a enrollment rates in secondary and tertiary education large and widening gap that is especially evident than boys. in high-ranking occupations. In Brazil, for example, women remain overwhelmingly represented in low- The expanded contribution of pension income and productivity sectors, with only small increases in the an increase in women’s life expectancy have also share of females employed as professionals and as been important factors to increased labor income clerks, despite having high levels of human capital. among women. Argentina, Chile, Brazil, Panama and At the same time, there is data that indicates that this Costa Rica have introduced non-contributory pension occupational segregation gap is changing, with access programs (paid by the government but not the to top positions becoming easier for women, and employer or the employee) for both men and women. female professionals and top officials being younger Also, women continue to live longer than men, which than their male counterparts. enables them to profit more from pensions. “Agency” is an essential ingredient if women in The growing role of female income also bodes Latin America want to take full advantage of their well for future generations. In most LAC countries improved educational levels and expanded economic compulsory and subsidized education, and therefore opportunities. While agency itself is difficult to 10 measure, manifestations of limited agency – such The report suggests focusing public policy on as high levels of gender based violence or teenage three priorities: expanding female labor market pregnancy – can provide important insight on this opportunities; improving female agency which — phenomena. Both of these social phenomena tend while important in its own right — has important to be high in Latin America, which suggests that potential benefits for equality of economic agency may be relatively low in the region, preventing opportunities and assets, and supporting the growing women from taking full advantage of their human number of poor single female-headed households. development assets and economic opportunities in Along with these suggested policy priorities, strong the labor market and beyond. monitoring and evaluation systems should be included to every extent possible. The small but seemingly growing number of households in the region in which women are the The study ends with a look at the Gender Impact only breadwinners (17 percent overall; 19 percent in Evaluation Initiative, launched by the World Bank’s urban areas) face the highest risk of poverty. Even as LAC Poverty, Gender and Equity unit to increase the expanded role of women in the workforce helps understanding of what works to promote greater dual-income households escape poverty and cope gender equity. This new effort seeks to address critical with economic shocks, those urban households with gaps in knowledge about policies and interventions for children and a female economic head are a third more women’s equality of assets, economic opportunities, likely to be extremely poor, compared to those headed and agency. The Initiative will be key to helping carry by a male (20 percent to 15 percent). out suggested policy priorities. Unprecedented improvements in poverty and inequality reduction in Latin America and the Caribbean have been undergirded by the role women have played in those processes. Yet in order for such progress to continue, still-persistent barriers to women require innovative and creative policies and programs. Executive Summary 11 Introduction T he new millennium ushered in an poverty continued falling in 2009, suggesting that The Effect of Women’s Economic Power in Latin America and the Caribbean important turning point in Latin America the region was resilient to the global economic shock, and the Caribbean. Around 2002/03, growth despite a 4 percent economic contraction in the accelerated sharply and the pace of poverty and region’s GDP (World Bank, 2011a). The overall positive inequality reduction hastened to reach historic lows impact of growth on poverty during the 2000s was by the end of the first decade. Between 2003 and accelerated by the sustained decline in inequality that 2010, poverty fell unequivocally, dropping to 29 started in the mid-1990s. Between 2000 and 2010, the and 15 percent for moderate and extreme poverty, Gini index for the region fell from a peak of 0.57, to respectively (Figure 1). Unlike in previous crises, reach 0.54 in 2010 (Figure 2). Figure 1. 2002 is a watershed year for growth and poverty reduction in LAC (circa 1990-circa 2010) 50,00 12000,00 45,00 GDP per capita PPP (constant 2005 international $) 10000,00 40,00 35,00 Poverty Headcount (%) 8000,00 30,00 25,00 6000,00 20,00 4000,00 15,00 10,00 2000,00 5,00 0,00 00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Poverty headcount (%) GDP per capita PPP (constant 2005 international $) Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank). 12 Figure 2. Inequality reduction accelerates in 2003 Gini (circa 1995-circa 2010) 59 58 57 GiniCoe cient 56 55 54 53 52 51 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Author’s calculations, SEDLAC data, 2011 (CEDLAS and the World Bank). Gini computed with zeros. Poverty reduction in LAC will likely continue countries with data, the LIPI continued declining in through 2011, although the global slowdown 2011 (Brazil, Peru and Ecuador), while it remained at may significantly constrain poverty reduction in the post-crisis high in Mexico. While the data for 2012 2012. The Labor Income Poverty Index (LIPI) monitors remains very preliminary, the LIPI stagnated in Brazil households that cannot obtain the basic food basket for the first quarter and saw a small uptick in Peru with their labor income, thereby acting as a leading (although the latter could also reflect the seasonality indicator of poverty trends1. In three out of the four which characterizes Peru). Figure 3. Falling Labor Income Poverty Indices suggest poverty reduction continues through 2011 1,40 1,19 1,18 1,13 1,20 1,10 1,10 1,15 0,98 0,88 0,80 0,89 0,74 0,60 0,75 0,61 0,40 Introduction 0,20 0,00 2005 2006 2007 2008 2009 2010 2011 2012 Argentina-Urban Brazil-Urban Colombia-National Uruguay-National Ecuador-National Mexico-National Peru-Urban Lima Source: Author’s calculations, LACLAC data, 2011 (CEDLAS and the World Bank). 1 For a more detailed explanation of the LIPI methodology please see World Bank (2010). 13 Yet, despite these historic achievements, there This brief takes advantage of the harmonized remains important terrain to be covered to address household data from SEDLAC to document the the persistent high rates of poverty and inequality contribution of women to reducing poverty and in Latin America and the Caribbean. More than inequality in Latin America and the Caribbean (LAC).3 one in four people are poor and more than one in 10 It also explores key drivers behind their expanded role cannot meet their basic food needs, with this number and, perhaps most importantly, highlights several even higher amongst children (World Bank, 2011b). key constraints that could limit their contributions Moreover, the region still is the most unequal in the going forward, before concluding with some policy world. The most equal country in LAC (i.e. Uruguay) is priorities. Section 1 examines the contribution of still more unequal than the most unequal country of women to poverty and inequality reduction in LAC the OECD (i.e. Portugal). over the last decade, while Section 2 looks at the main drivers behind these contributions. Section 3 explores Understanding the structural forces behind the the main challenges that prevent women from gains of the last decade can help crystallize the expanding even further their economic contributions, policy agenda ahead necessary to promote further and finally it concludes with the overview of some progress in Latin America and the Caribbean. policy priorities. Much has been said about the role of expanded safety nets, improved educational outcomes, macro- stability and relatively high rates of growth as key The Effect of Women’s Economic Power in Latin America and the Caribbean contributors behind the positive social outcomes of the 2000s (López- Calva and Lustig, 2010; Gasparini and Lustig, 2011; Azevedo et al., 2012a). However, the role of women and their expanded contributions to the economy during this period have been less explored2. 2 One notable exception is the work of Chioda et al (2011), “Work and Family: Latin American and the Caribbean Women in Search of a New Balance.” The report highlights the tremendous expansion of female labor force participation in LAC since 1980 and highlights the increasingly complex challenges women face in balancing work and family and the need for job opportunities with increased flexibility. 3 See Table A1 in the Appendix. 14 1. A good decade for women, a good decade for LAC W omen made a crucial contribution to both extreme and moderate poverty reduction between 2000 and 2010. The growth in female income accounted for 30 percent of extreme poverty reduction, against 39 percent for in 2010. Most of the gain in female income reflects increased labor earnings, but expanded access to pensions and increased labor force participation were also contributing factors. In addition, approximately one third (31 percent) of the poverty reduction was that of men (Figure 4). Holding all else constant in the from non-labor income (e.g. public and private labor market, if female income had remained the same transfers), which cannot be attributed to any specific during this period, extreme poverty in Latin America gender within the household.4 1. A good decade for women, a good decade for LAC and the Caribbean would instead be 30 percent higher Figure 4. Female income contributed 30% to extreme poverty reduction (2000-2010, $2.5 USD/PPP) 5 Men Women Other 0% -5% -3% -3% -6% -6% Share of percentage change -10% -15% -20% -21% -25% -30% -30% -30% -31% -35% -40% -39% Share of occupied Labor income Pension Share of occupied Labor income Pension Non Labor income Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank). Note: Poverty defined by Headcount ratio at $ 2.5 USD/PPP. Please see footnote 4 for a brief explanation of the methodology used. 4 Similar results have been found for moderate poverty reduction. See Figure A2 in the Appendix. 5 Methodological note. In order to decompose the contribution of each factor to changes in poverty and inequality between 2000 and 2010, we follow a variation of the accounting structure proposed by Barros et al (2006). This approach 15 Female income was especially critical in reducing women) from the poverty line. In the case of males, the strains on the poorest of the poor, along with there is some evidence that the very poorest were public and private transfers. Female labor market exiting the labor market. Not surprisingly, non-labor income was more than twice as effective as male labor income, including public transfers and remittances, market income in reducing the severity of poverty played the most important role in calming the (Figure 5). Higher returns from the labor market, more severity of poverty, as it accounted for more than half than higher participation rates, were accountable for of the decline. reducing the distance of the very poor (both men and Figure 5. Female income was particularly effective in reducing the severity of poverty along with transfers (2000-2010, $2.5 USD/PPP) Men Women Other 4% 0% 0% -2% -8% -5% Share of percentage change -10% -12% -20% -19% -30% -26% -40% The Effect of Women’s Economic Power in Latin America and the Caribbean -50% -60% -70% -66% Share of occupied Labor income Pension Share of occupied Labor income Pension Non labor income Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank). Note: The indicator used to measure the severity of poverty is the squared poverty-gap ratio (FGT2, defining the poverty line at $2.5). During the 2009 crisis, female participation in help compensate for the fall in male labor income, the labor market was crucial for compensating contributing to half of the poverty reduction that for the decline in male labor income. Despite the occurred in 2009. The other half was from households fact that male labor income was the most important with both male and female labor market income. in pushing households out of poverty during the last These trends underscore the importance of female decade, it was also the most vulnerable to the crisis labor market income for coping with shocks, and the (Figure 6). Meanwhile, females remained active in added vulnerability of households relying on male the labor market during the crisis and were able to income exclusively. generates entire counterfactual distributions that help quantify the contributions to observed distributional changes that are accounted for by changes in labor and non-labor income for males and females, as well as the component of non-labor income that cannot be assigned to any particular gender in the household. In contrast with much of the literature, we perform the decompositions following every possible decomposition path, thus reporting robust Shapely-Shorrocks values for each component following the work of Azevedo et al (2012b). 16 Figure 6. Men in the labor market were more vulnerable to the crisis than women (2005-2010, $2.5 USD/PPP) Men Women Rank correlation 0.3 Share of effects on the total change in poverty 23% 0.2 0.1 0.0 -0.1 -9% -0.2 -16% -18% -18% -0.3 -27% -29% -0.4 -32% -33% -0.5 -51% -53% -0.6 -55% -59% -62% -61% 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Source: World Bank (2011a). Note: The nine countries are Argentina, Brazil, Costa Rica, Ecuador, Honduras, Paraguay, Peru, the Dominican Republic and Uruguay. Data for Brazil, Costa Rica and Honduras are from 2009 but inflated using national accounts to represent 2010 levels. Poverty is calculated using only labor income in this exercise. Fournier (2001) decomposition6. While male labor income and pensions each of the decline in inequality in the 2000s, labor market contributed more than a third of the inequality income (both male and female) was the principal reduction, female labor income was a critical driver of the decline. For both men and women, factor behind the sharp decline in inequality higher returns to labor were more important than experienced in LAC, accounting for 28 percent increased labor force participation in promoting a of the reduction (Figure 7). While transfers and more equal distribution of income. pensions together explain almost half (46 percent) 1. A good decade for women, a good decade for LAC Figure 7. Female earnings contribute almost one third of inequality reduction in LAC (2000-2010) Men Women Other 0% -5% -4% -4% -4% -6% Share of percentage change -10% -15% -20% -18% -25% -30% -29% -28% -35% -36% -36% Share of occupied Labor income Pension Share of occupied Labor income Pension Non Labor income Source: Author’s calculations, SEDLAC data, 2011 (CEDLAS and the World Bank). Please see footnote 5 for a brief explanation of the methodology used. 6 Fournier (2001) decomposition of poverty by factor components: changes in poverty due to changes in labor income, changes in non-labor income, and changes in the rank correlation between the income sources. Since there is no way to consider a variation of the marginal distribution of a specific income source, keeping constant both the marginal distribution of other sources and the correlation between sources, Fournier uses an alternative approach that looks at rank correlation. In this approach, one can do simulations that are based on totally non-parametric 17 The growing importance of female income may percent higher than similar households dependent also yield greater poverty reduction for the next upon male labor income (Figure 8). For instance, in generation. Higher rates of household dependency Brazil children in households dependent on female on female income are associated with higher rates labor market income were 7 and 14 percent more of school enrollment, particularly for pre-school likely to be enrolled in preschool and secondary and upper secondary school – where traditionally school, respectively, than in households more enrollment rates have been lowest in the region. dependent on male labor income or transfers. These (In most LAC countries, education is compulsory estimates control for income per capita, the share and subsidized between six and 15 years old). of pensions and transfers in household income, the Households where women contribute more than 75 size of household, and the existence of single parent percent of total income have enrollment rates for households. preschool and high school that are about 1 to 25 Figure 8. Households highly dependent on female income are associated with better school enrollment rates (2010) Children 3 to 5 years old Children 6 to 15 years old Children 16 to 19 years old The Effect of Women’s Economic Power in Latin America and the Caribbean Coe cient 0.0100 0.2400 Source: Author’s calculations using SEDLAC data, 2011 (CEDLAS and the World Bank) computations since they only use the rank structure of various income sources. In addition, this method presents the major advantage of allowing for a distinction between changes in the correlation between income sources and changes in the marginal distribution of income sources, without using an ad hoc sharing rule for the correlation effect between sources. 18 2. What is behind the growing contribution of women? T he contributions of female income to poverty and inequality reduction in LAC in the 2000s reflects the growth in their labor market earnings compared to men (Figure 9), and higher participation rates (Figure 10), particularly Unpacking the increase in female labor earnings reveals that rising participation rates were important, especially for low-income women. In LAC, female labor market participation rates surged by 15 percent over the last decade, while that of men among poorer women, as well as the introduction only increased by 2 percent (Figure 10). Nevertheless of non-contributory pension programs for women, this change has been heterogeneous. In countries especially in Southern Cone countries. such as Costa Rica and Panama, more than 25 percent 2. What is behind the growing contribution of women? more women worked in 2010 than in 2000, while The gross earnings gap between men and women in El Salvador the increase was less than 5 percent. has declined significantly during the 2000s, Honduras is the only country where the female reflecting higher participation rates, especially employment rate actually declined, while male among older females, and a gradual convergence participation rates declined in four countries (Ecuador, of male and female returns to experience. This Mexico, Dominican Republic and Costa Rica). Despite trend is fairly widespread across LAC, as the gap the general trend towards higher female labor declined in 12 countries with comparable data and market participation, it remains significantly below rose in six countries. Nonetheless, gross female labor male participation rates in LAC and OECD countries. income remains less than that of males, at around 60- In 2010, in LAC about 46 percent of women aged 90 percent. The gap is greatest and growing in Bolivia between 15 and 64 participated in the labor market, and Peru and, while declining, remains significant in against 76 percent of men. In OECD countries, the Chile and Guatemala (Figure 9). participation of women in the work force exceeds LAC’s by about 10 percentage points.7 7 http://stats.oecd.org/ 19 Figure 9. The gross gap in labor market earnings between men and women fell in most LAC countries (aged 15-64) (2000, 2010) Decreasing gender gap in monthly labor income Slv 0.82 0.88 Dom 0.75 0.84 0.78 Cri 0.84 0.74 Hnd 0.82 0.80 Ven 0.81 0.78 Ecu 0.79 Arg 0.72 0.78 Mex 0.64 0.73 Bra 0.69 0.71 Pry 0.69 0.70 Gtm 0.55 0.65 Chl 0.61 0.64 Increasing gender gap in monthly labor income Pan 0.93 0.90 Col 0.84 0.81 Nic 0.83 0.80 Bol 0.71 0.65 Ury 0.69 0.69 Per 0.68 0.64 2000 2010 The Effect of Women’s Economic Power in Latin America and the Caribbean Source: SEDLAC (CEDLAS and The World Bank) Note: The ratio is computed dividing the female monthly labor income by the male monthly labor income in both years. The monthly labor income is expressed in nominal Local Currency Unity (LCU). Argentina (28 main cities, 2000; EPHC, 2010); Bolivia (National, 2000; 2008); Brazil (New PNAD 2001, 2009); Chile (2000, 2009), Colombia (ECH National 2001; GEIH-National 2010); Costa Rica (2000, 2010); Dominican Republic (ENFT 2000, 2010); Ecuador (ENEMDU, 2003, 2010); El Salvador (2000, 2010); Guatemala (ENCOVI, 2000; 2006); Honduras (EPHPM 2001, 2009); Mexico (2000, 2010); Nicaragua (2001, 2005); Panama (2001, 2010); Paraguay (2000, 2010); Peru (ENAHO, 2000, 2010); Uruguay (only urban 2000, 2010); Venezuela (2000, 2007). Figure 10. Rising female labor force employment rates (aged 15-64) (2000 to 2010) Female Male 40% 35% 35% Change in employment rate (%) 30% 26% 24% 23% 25% 21% 18% 18% 20% 15% 15% 13% 13% 13% 12% 15% 9% 10% 7% 6% 4% 4% 5% 3% 2% 2% 2% 1% 0% 0% 0% -1% -5% -2% -3% Dmr -4% Mex -5% -10% Pan Col Arg Per Cri Ury Bra LAC Pry Chl Mex Slv Dmr Hon Ecu Pan Col Arg Per Cri Ury Bra LAC Pry Chl Slv Hon Ecu Source: Azevedo, et al. (2012a). Female labor market participation rates are the share of women from 15 to 64 who declare a positive income in the household survey. 20 The increase in female labor force participation Overall, returns to education and experience in rates has been sharpest among low-income the labor market fell for both men and women women, helping to explain the contribution of in the 2000s (Figure 12). However, while both female labor earnings to the decline in extreme male and female returns to education declined, the poverty as well as the severity of poverty (Figure deterioration occurred earlier and more sharply for 11). Comparing the increase in labor market women than for males. The more rapid reduction in participation between women from the bottom and returns to education for females might be explained top quintile in LAC reveals that low-income women by more educated women, relative to men, joining are entering the labor force at a much higher rate than the labor markets in the region. This could undermine wealthier women. This trend is particularly marked in incentives for continued high female investment in Panama, Paraguay, Costa Rica, Peru and Colombia. human capital and erode their relative gains in the labor market. Figure 11. More low-income women were entering the labor force compared to high-income women (change in employment rates for women aged 15-64) (2000 to 2010) Poorest Richest 76% 80% 70% 64% Change in employment rate (%) 60% 50% 41% 39% 35% 40% 30% 27% 30% 21% 20% 19% 19% 18% 17% 17% 20% 14% 14% 14% 14% 13% 12% 12% 12% 9% 10% 6% 3% 2% 0% 0% -1% -10% -5% 2. What is behind the growing contribution of women? Hon -12% -20% Pan Pry Col Per Cri Arg Dmr Ury Chl LAC Bra Slv Mex Ecu Pan Pry Col Per Cri Arg Dmr Ury Chl LAC Bra Slv Mex Ecu Hon Source: Azevedo et al. (2012a). Note: Poorest: bottom 20 percent of income distribution; richest top 20 percent of income distribution Figure 12. The returns of experience in the LAC labor markets are more favorable to females than males. a. Male - Return to skills b. Female - Return to skills 105 110 100 95 100 90 85 90 80 80 75 70 70 1995 2000 2005 2010 1995 2000 2005 2010 Education Experience Other factors Education Experience Other factors Source: Azevedo et al (2011). Index 2000 = 100. 21 The increase of female labor income and female countries. Almost all LAC countries closed their gender labor market participation is likely linked to gaps in primary education. Secondary education and higher enrollment rates and the closing gender tertiary education have not only reached gender gap in education. In the last decade, gender gaps parity but have reversed it, as girls now significantly in education have closed and even reversed in many outnumber boys (Figure 13). Figure 13. Enrollment rates increased for both males and females, although females still have higher enrollment in secondary and tertiary education in LAC (2000, 2010) School enrollment, primary (% net) School enrollment, secondary (% net) School enrollment, tertiary (% gross) 2000 2010 2000 2010 2000 2010 100% 94% 94% 92% 93% 90% 80% 75% 70% 70% 62% 58% 60% 50% 41% 40% 33% 30% 23% 20% 20% The Effect of Women’s Economic Power in Latin America and the Caribbean 10% 0% Female Male Female Male Female Male Female Male Female Male Female Male Source: World Development Indicators (WDI). Note: the values reported for 2010 are an average of 2009 and 2010 indicators. Primary (secondary) Net enrollment rate is the ratio of children of the official primary (secondary) school age who are enrolled in primary (secondary) school to the total population of the official primary (secondary) school age. School enrollment gross: is the total enrollment in tertiary education, regardless of age, expressed as a percentage of the population of official tertiary education age. Another important factor behind the increase longer than men, which enables them to profit more in female labor income reflects the expanded from pensions. On average, women live two years contribution of pension income. The latter is due, longer than they did 10 years ago and they live, on in large part, to the introduction of non-contributory average, six years longer than men. The increasing pensions for women, as well as an increase in female life expectancy for women has been, in part, driven life expectancy. Argentina, Chile, Brazil, Panama by a decline of maternal mortality. However, the and Costa Rica have introduced non-contributory rate at which LAC maternal mortality has declined is pension programs for both men and women. There less than planned and this is one of the Millennium were gains in life expectancy and reductions in the Development Goals (MDGs) where the region is mortality rate for both men and women in the 2000s lagging (UNDP, 2011). (Figure 14). Nonetheless, women continue to live 22 Figure 14. Both men and women experienced important gains in life expectancy and reductions in mortality rates in LAC (2000, 2010) Life expectancy at birth Maternal mortality ratio Mortality rate Female Male Female Male 80 115 220 211 Mortality rate (per 1,000 female/male adults) 78 77 110 110 210 Maternal deaths every 100,000 live birth 76 105 200 75 190 181 74 100 180 95 170 72 71 160 90 150 Years 70 140 68 85 68 81 130 117 80 120 66 110 75 100 98 64 70 90 62 65 80 70 60 60 60 2000 2010 2000 2010 2000 2010 2000 2010 2000 2010 Source: World Development Indicators (WDI). Note: Life expectancy at birth indicates the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life. Maternal mortality ratio is the number of women who die during pregnancy and childbirth, per 100,000 live births. The data are estimated with a regression model using information on fertility, birth attendants, and HIV prevalence. Adult mortality rate is computed as the probability of a 15-year-old dying before reaching age 60 (every 1,000 female/male adults), if subject to current age-specific mortality rates between those ages. There is also some evidence suggesting that labor in 2000s (Box 1). The expanded role of minority force income increased significantly for minorities labor income may reflect improved access to labor –both men and women– in the 2000s, which would markets; higher rates of human development assets also be a driving factor behind the decline in (mainly education but also health); the introduction extreme poverty in the region. In the case of Brazil, of minimum wages and pensions; and perhaps also there is clear evidence that labor market income less discrimination in the job market, although this from female, and especially male, ethnic minorities remains to be explored. 2. What is behind the growing contribution of women? contributed to the country’s poverty reduction Box 1. Ethnic minorities have been a key force behind the reduction of poverty in Brazil In the last decade, the contribution of ethnic minorities8 to labor earnings in Brazil has been substantial. The reduction in extreme poverty due to male minority income has been more than 6.5 times the contribution of male income from non-minority groups. Among women, minorities contributed 2.5 times compared to non-minority women (Figure 15). The expansion of minimum wages is likely to have played an important role behind the change in labor earnings for minority workers and their ability to contribute to poverty reduction. Male labor market income amongst minority groups was significantly more important in pushing down poverty, contributing almost double the amount of poverty reduction compared to female labor market income from minorities. In contrast, in comparing the contribution of men and women of non- minority groups – the share of poverty reduction from female income was greater than for males. 8 In this exercise we consider “white,” which represent about 45 percent of the population, as the non-minority group and the rest of population as the minority group. 23 Figure 15. Men and Women ethnic minorities’ contribution to poverty reduction in Brazil (2000-2010) Men Women Other Minority No minority Minority No minority 0% -1% -5% -4% -3% -2% -5% -6% -6% -7% Share of percentage change -10% -9% -15% -20% -17% -25% -24% -23% -30% -35% -36% -40% -39% Labor income Pension income Labor income Pension income Labor income Pension income Labor income Pension income Non labor income The Effect of Women’s Economic Power in Latin America and the Caribbean Source: Author’s calculations, SEDLAC data, 2011 (CEDLAS and the World Bank). Please see footnote 5 for a brief explanation of the methodology used. 24 3. Emerging vulnerabilities and persistent challenges T he growth in the economic contribution of women to poverty reduction in LAC during the last decade was impressive; however, there remain several important challenges labor market segmentation, wage gaps, and agency, Despite the presence of occupational segregation in Brazil, there is some preliminary evidence that the access to top positions may be becoming easier for women. While women in Brazil still need more education to reach top jobs, this characteristic which affect women and potentially undermine the is eroding, as the educational gap between men and rate of poverty reduction in the region. women in top professions is growing smaller (Figure 17). In Brazil, women senior officials, technicians, and 3. Emerging vulnerabilities and persistent challenges Despite having higher levels of human capital, clerks tend to have more education than their male female workers are more likely to be in low counterparts, although this difference has declined productive sectors than their male counterparts. in the 2000s. Moreover, there is even some evidence Although data from Brazil suggests that the presence that women professionals and top officials are of women in some top occupations is increasing younger than their male counterparts (Figure A8 in slightly, women are still overwhelmingly represented the Appendix). in low-productivity sectors. In Brazil, there have been small increases in the share of women employed as There is some evidence that women and men professionals (from 6 percent to 10 percent) and as may not be compensated on par, especially in clerks (from 10 to 13 percent), but the share of women top professions. After controlling for education, in services has remained constant and is more than age and proportion of workers in each occupation double the share of men in that sector (Figure 16). between 2000 and 2010, there is evidence of a large and persistent wage gap for women in Chile, Brazil, Mexico and Peru that is especially marked for top- paid professions (Figure 18).9,10 9 All results are population weighted. Median labor income are from pooled data of the Household Survey for four countries (Brazil, Chile, Mexico, Peru) in 2000 and 2010. 10 Examining the ratio of median labor income between males and females with no controls shows a decline in the wage gap over time (Figure 9). However, when controlling for education, age and proportion of workers by occupation, 25 Figure 16. Percentage of women and men in each occupation in Brazil Year Occupation Circa 2000 Circa 2010 Professionals Senior o cials Technicians Clerks Machine operators Craft workers Service and market sales Skilled agricultural Elementary occupation 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 Share of workers Share of workers Source: Author’s calculation. Data: Household Survey Data (Brazil) in 2000 and 2010. Note: The red line is the median value of the parameter considering all occupations together in the country considered. The dotted grey line is the median value of the parameter considering all occupations and all countries together (Brazil, Chile, Mexico, Peru). The occupations are ranked by median labor income, from the top-paid to the bottom-paid occupations. The Effect of Women’s Economic Power in Latin America and the Caribbean Figure 17. The Gender gap in years of education by occupation in Brazil is declining for some top professions Year Occupation Circa 2000 Circa 2010 Professionals Senior o cials Technicians Clerks Machine operators Craft workers Service and market sales Skilled agricultural Elementary occupation 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Years of education Years of education Source: Author’s calculation. Data: Household survey data (Brazil) in 2000 and 2010. Note: The red line is the median value of the parameter considering all occupations together in the country considered. The dotted grey line is the median value of the parameter considering all occupations and all countries together (Brazil, Chile, Mexico, Peru). The occupations are ranked by median labor income, from the top-paid to the bottom-paid occupations. the gap has increased in the last decade. These results differ from Hoyos and Ñopo (2010), as they analyze different time periods (2000-2010 in this report, compared to 1992-2007 in Hoyos and Nopo) and the country coverage is different. 26 Figure 18. Rising gender gaps, especially for top paid occupations (2000, 2010) 2000 2010 140 135.05**** 137.19* 130 120 114.04** 110 Coe . 100 90 80 74.55 70 60 Gender gap Gender gap in top paid occupations Gender gap Gender gap in top paid occupations Source: Author’s calculation. Data: SEDLAC data (Brazil, Chile, Mexico, Peru) in 2000 and 2010. Note: The results reported refer to OLS estimation of the median labor income, pulling together data from the four countries. The “gender gap” bar indicates the value of the estimated coefficient of the variable gender (1= Men) and the bar labeled “gender gap in top paid occupations” shows the value of the estimated coefficient for the interaction of the variable gender and a dummy equal to 1 for the three top-paid occupations (Professionals, Senior Officials and Technicians). Wage gaps and the concentration of females in (2009) provide empirical evidence of the positive certain sectors likely reflect a variety of factors. effect of increased aspirations on investment behavior These may include: differential employment choices and income. In their randomized experiment, women and patterns (as women more often than men are whose aspirations increased through communication less engaged in the work force when they marry with successful and motivated female leaders were and/or have children, and as women may select more likely to make higher human capital investments to work in sectors more conducive to flexible and/ and have higher incomes. or part-time schedules); as well as unequal de facto or de jure opportunities for men and women in the While agency itself is difficult to measure, 3. Emerging vulnerabilities and persistent challenges labor market. Influencing both of these factors is manifestations of limited agency –such as high levels the concept of agency, which is “the ability to make of gender-based violence or teenage pregnancy– choices and to transform these choices into desired can provide important insight on these social outcomes” (WDR, 2012).11 phenomena. Both of these tend to be high in LAC, which suggests that agency may be relatively low “Agency” is an essential ingredient if women in in the region, preventing women from taking full Latin America want to take advantage of their advantage of their human development assets and expanded assets and economic opportunities to economic opportunities in the labor market and make choices consistent with their aspirations and beyond (Box 2). desires. In a joint research paper, Macours and Vakis 11 The WDR 2012 identifies five expressions of agency for women, namely: control over resources, freedom of movement, decision-making power in the family, freedom from the risk of violence, and ability to have a voice in society and influence policy. 27 Box 2. Gender Based Violence and Teen Pregnancy – manifestations of low agency GENDER-BASED VIOLENCE Gender-based violence affects a substantial proportion of women in the region. Collecting accurate information of gender violence is difficult given the sensitive nature of the topic and lack of clarity for women in defining what constitutes violence by their partners. However, a forthcoming publication by PAHO and the CDC (Bott et al.) suggests that there is significant gender-based violence in LAC and that it may have long-term structural effects. The percentage of women across 12 countries who reported that their partners beat or physically abused them at some point in their lives varies, from 13 percent in Haiti to overall half of women in Bolivia; while between 7 to 24 percent of women in LAC reported that their partners beat or otherwise physically abused them in the past 12 months preceding the survey (Figure 19). Figure19. Physical partner violence against women, ever and in the past 12 months The Effect of Women’s Economic Power in Latin America and the Caribbean Bolivia 2003 52.3 Bolivia 2008 24.5 Colombia 2005 38.6 20.7 Peru 2007/8 38.6 14.0 Ecuador 2004 31.0 10.3 Nicaragua 2006/7 27.0 8.0 Guatemala 2008/9 24.5 7.8 Honduras 2005/6 7.4 El Salvador 2008 24.2 6.8 Paraguay 2008 17.9 6.7 Jamaica 2008/9 17.2 6.5 Haiti 2005/6 13.4 12.1 Dominican Republic 2007 16.1 10.9 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 Ever Past 12 month Source: Bott S, Guedes A, Goodwin M, Mendoza J (forthcoming) Violence against women in Latin America and the Caribbean: A comparative analysis of population-based data from 12 countries. Washington DC: Pan American Health Organization and the Centers for Disease Control and Prevention. Note: Considering the most recent partner only. Data: DHS and RHS surveys, various years. Women who have not had a partner are excluded. Gender-based violence appears to have inter-generational implications, affecting the agency and voice of the next generation as well. In the same study, the reported prevalence of physical and sexual violence from an intimate partner is higher among women who reported that their mother was beaten, compared with women whose mother suffered no domestic violence (Figure 20). Gender-based violence also seems to be a fairly widespread accepted norm: The percentage of women who consider wife-beating to be acceptable ranges from 3 percent in Jamaica to 38 percent in Ecuador (Annex A9).12 12 Those who support beating gave one of the following actions as an acceptable reason: (i) neglects children or housework, (i) goes out without telling him, (iii) refuses sex, (iv) argues or disagrees with husband, (v) burns the food, (vi) raises a suspicion of being unfaithful, (vii) asks husband if he is unfaithful, or (viii) disobeys husband. 28 Figure 20. Intergenerational trap: Prevalence of partner violence, by history of abuse against mother Bolivia 2003 60.1 45.2 Peru 2007/8 49.8 29.9 Colombia 2005 48.8 34.6 Ecuador 2004 43.6 25.4 Nicaragua 2006/7 41.9 24.1 El Salvador 2008 41.5 20.9 Guatemala 2008/9 37.3 22.1 Paraguay 2008 34.7 15.8 Haiti 2005/6 33.7 16.9 Jamaica 2008/9 32.5 16.5 Dominican Republic 2007 28.1 14.6 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 Among women who reported mother (or stepmother) NOT beaten Among women who reported mother (or stepmother) was beaten Source: Bott S, Guedes A, Goodwin M, Mendoza J (forthcoming) Violence against women in Latin America and the Caribbean: A comparative analysis of population-based data from 12 countries. Washington DC: Pan American Health Organization and the Centers for Disease Control and Prevention. Data: DHS and RHS surveys, various years. TEENAGE PREGNANCY High rates of teenage pregnancy represent another manifestation of low agency. LAC has the third 3. Emerging vulnerabilities and persistent challenges highest teenage pregnancy rate in the world, almost tied for second place with South Asia. Moreover, the rate is declining slower than in other regions (Azevedo, Lopez-Calva et al. forthcoming). Despite the fact that the region has improved health and education outcomes significantly over the last two decades, addressing teen pregnancy and early childbearing remains a challenge for many countries. Middle-income countries such as Chile and Brazil have achieved impressive gains in a number of health indicators, including maternal and child mortality and chronic malnutrition, but have been much less successful in stemming teen pregnancy. 29 Figure 21. Adolescent fertility has declined more slowly in LAC than SSA and SA (1997-2010) Figure 21. Adolescent fertility has declined more slowly in LAC than SSA and SA (1997-2010) 140 120 100 80 60 40 20 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 East Asia & Paci c (all income levels) Europe & Central Asia (all income levels) High income: OECD Latin America & Caribbean (all income levels) Middle East & North Africa (all income levels) South Asia Sub-Saharan Africa (all income levels) World The Effect of Women’s Economic Power in Latin America and the Caribbean Source: World Bank (forthcoming) Teenage Fertility Decisions, Poverty and Economic Achievement in Latin America and the Caribbean. Washington, DC Teenage pregnancy is associated with high levels of poverty with important implications on the economic and human development outcomes for the mothers and even their children. A forthcoming World Bank Regional study on teenage pregnancy in LAC finds that it is associated with high levels of poverty, rural residence, limited aspirations, growing up on a single parent household, and being born to a teen parent. There is also some evidence linking teen mothers to lower rates of secondary school completion and post-secondary education. In terms of the children born to teen mothers, the evidence suggests any negative nutritional and educational impacts of being born to a teen mother are negligible over the medium-term; however, they do face a higher risk of deviant behavior when they become adolescents themselves, including higher rates of sexual activity. In addition, there is evidence of higher health risks and maternal mortality rates for adolescent pregnancy, particularly those for under-18 years of age, as the reproductive system has not yet reached full maturity before that age. (2007 UNICEF/ECLAC Study). While in general the expanded engagement of increase in urban areas (from 17 to 19 percent of the females in the workforce has helped dual income households) (Figure A12). In households with children households exit poverty and cope with shocks, in urban areas, a female economic head of household there is a growing vulnerable group of women who faces a 20 percent likelihood of being extremely poor, are single economic heads of households (Box 3). compared to 15 percent for a male economic-headed In a small but seemingly growing share of households, household (Figure 23). It is important to note that women are the only breadwinners and face the highest male single-headed households (where all the labor risks of poverty. In 2000, 16 percent of the households earnings are from men) are also more vulnerable to had only female labor market income while, in 2010, poverty, although less so than female single-headed this share had grown to 17 percent – with the largest households. 30 Female single-headed households may also be under income, they tend to be the only adults and have a stress given the smaller number of male adults in much higher dependency ratio to support. In contrast, the household and higher dependency ratios than in the traditional home where males contribute all male-headed households. Figure 24 shows that the the labor income, more than 50 percent of the adults dependency ratio for male single-headed households tend to be females, who can help with family chores, in urban areas is around 0.55 per adult, compared to care giving and the provision of other non-monetary almost 0.7 for female single-headed households. In support. households where females contribute all the labor Box 3. Towards an Economic definition of head of household Using the traditional definition of headship, most households are headed by males, even when females contribute 80 percent of household income. On average, between 80 and 55 percent of households in rural and urban areas, respectively, are considered headed by males (Figure 22). In this brief, a new concept of “head of household” is introduced using “economic headship” based on two well-defined steps: First, calculating the share of total household income earned by the female; and second, identifying the male or female “head” as the person earning more than 50 percent of household income. Furthermore, a female (male) single-headed household is a household where all income is generated by the female (male) household’s members. Having control over the household’s resources (i.e., contributing more than 50 percent of total household income), gives the economic head greater bargaining power to make his or her preferences prevail over others. Using this definition of headship, 17 percent of the households in LAC are single-headed female 3. Emerging vulnerabilities and persistent challenges households, where women provide all of the labor earnings, up from 16 percent in 2000. The traditional definition of headship. The United Nations defines the “head of household” as “that person who is acknowledged as such by other members”.13 The UN’s Demographic Household Survey interviewer’s manual indicates that: “…the person who is identified as the head of the household has to be someone who usually lives in the household. This person may be acknowledged as the head on the basis of age (older), sex (generally, but not necessarily, male), economic status (main provider), or some other reason. It is up to the respondent to define who heads the household”. 14 Although interview manuals for household surveys may explicitly define “household head,” as stated above, wives often may report their migrant husbands as “heads” even though they are not currently residing in the household. 13 United Nations Principles and Recommendations for Population and Housing Censuses, Sales No. E.98.XVII.8 New York, 1998 Paragraph 1.324 14 ICF Macro. 2009. Demographic and Health Survey Interviewer’s Manual. Measure DHS Basic Documentation No. 2. Calverton, Maryland, U.S.A.: ICF Macro 31 Figure 22. Comparing the traditional definition of male headship to economic headship (2010) Circa 2010 Percentage of male headed households (survey de nition) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations, SEDLAC data, 2011 (CEDLAS and the World Bank). Note: See Figure A12 for the percentage of household in each category of share of woman participation. The Effect of Women’s Economic Power in Latin America and the Caribbean Figure 23. Who is the breadwinner? Household’s headship and extreme poverty reduction (2000-2010, $2.5 USD/PPP) Circa 2000 Circa 2010 45% 40% 35% Headcount ratio ($2.5) 30% 25% 20% 15% 10% 5% 0% 0% 1-20% 21-40% 41-60% 61-80% 81-99% 100% 0% 1-20% 21-40% 41-60% 61-80% 81-99% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations, SEDLAC data, 2011 (CEDLAS and the World Bank). Note: Extreme poverty headcount is computed considering only labor income (poverty line $2.5 USD/PPP). 32 Figure 24. Economic household’s headship and dependency ratio (2010) Circa 2010 120% 100% 80% Dependency ratio 60% 40% 20% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations, SEDLAC data, 2011 (CEDLAS and the World Bank). Note: The dependency ratio is equal to the number of individuals aged below 15 or above 64 divided by the number of individuals aged 15 to 64, expressed as a percentage. 3. Emerging vulnerabilities and persistent challenges 33 Final Remarks and policy considerations I n the last decade, Latin American and be on: (i) direct and indirect policies to expand female The Effect of Women’s Economic Power in Latin America and the Caribbean Caribbean countries have experienced labor market opportunities (increasing labor force unprecedented improvements in terms of participation as well as reducing the wage gap and poverty and inequality reduction. As highlighted segmentation in the labor market); (ii) improving in this report, women have played a crucial role in female agency, which is expected to be important in this process. If female labor market participation its own right, and also to have important potential had remained constant over the last decade, poverty benefits for equality of economic opportunities and reduction would have been 30 percent lower and assets; and, (iii) supporting families of the growing the Gini inequality index 28 percent higher. In terms number of poor single female-headed households. of human development endowments, educational To the extent possible, interventions should be outcomes have dramatically improved (WDR, 2012). accompanied by strong monitoring and evaluation In most LAC countries, girls have been achieving systems to better identify what works, and under gender parity in primary school enrollment and even what circumstances, for promoting gender equality. outperforming boys at the secondary and tertiary level. Increasing investments in human capital Labor market policies have traditionally focused on together with the decline of fertility and the later age expanding vocational and skills training for women of marriage have contributed to increased women’s as well as providing job intermediation services to participation in the labor market, as participation help women to engage in non-traditional jobs and rates grew 15 percent from 2000 to 2010. find better employment opportunities. Several of these programs are summarized below. A recent Yet, there remain persistent barriers for women to review by the World Bank (2012) suggests that training expand their economic contribution, which require and job intermediation programs are most effective innovative and creative policies and programs in when combined with interventions designed to order that they be addressed. Several suggestions expand female empowerment and agency, such as for policy priorities that emerge from the discussion soft-skills training, interactions with female leaders in this brief are summarized below. The focus should and community.15 15 World Bank, (forthcoming in 2012), “Women’s Economic Empowerment in Latin America and the Caribbean: Lessons Learned from the World Bank’s Gender Action Plan”. 34 • Training programs, in the traditional and non- enter the workforce.17 The availability of flexible work traditional sectors, and often covering both soft alternatives may facilitate women in balancing their and hard skills. For example, programs in the “new identity” in the labor market with traditional Dominican Republic provide training through responsibilities within the households. These options private sector employers, while in Chile, Chile may not only have significant positive effects on access Califica, has established public-sector providers to the formal labor markets, but also may expand the of vocational training. In Haiti, the Adolescent capacity of women to aspire to, and have control over, Girls Initiative is procuring training to young their life, blending work and family demands. women through a variety of NGOs. In Argentina, low-income women are provided with subsidies Policy makers should not ignore ‘the other half of for professional training and certification in gender’.18 Addressing the roles of men and boys certain skills.16 in gender roles and stereotypes is an important investment in gender equality. Instituto Promundo, • Job intermediation programs, helping women Brazil has undertaken interesting work in this area.19 find higher quality employment. For example, While women have increasingly entered the labor in Chile, female job seekers are provided with force, time-use surveys show that men still do not matching services to find employers, along sufficiently participate in domestic and care work. The with access to networks and information on job results are a double burden for women. One option opportunities via Chile Califica. In Argentina, a for policy makers is to increase men’s participation gender pilot engaged seven gender-sensitized in child care and housework through parental municipal employment offices to help them leave policies and the promotion of joint parenting. link women job searchers to employment Governments should consider introducing targeted opportunities. risk management programs and assistance programs to this vulnerable group. Improving access to childcare and flexible work options offers another avenue to expand female There is no one set of policies to promote agency labor market opportunities. Evidence presented in but it will be important to start treating “agency” the “Work and Family” report (Chioda et al., 2011) like any other assets (such as good health or access suggests that access to child care and flexible work to credit) that can be nurtured and developed Final Remarks and policy considerations options can raise female labor force participation through good policies and programs. Clearly and more generally expand their opportunities in policies to address gender-based violence (both the labor market. Evidence from Brazil, where the prevention and treatment) and teenage pregnancy Municipality of Rio de Janeiro offered free day care to are important. However, agency-enhancing poor and vulnerable mothers, indicates that day care interventions can be integrated into a wide variety of can improve the intensive margin of participation traditional interventions, which will not only improve (how many hours worked or sorting into higher the effectiveness of these policies but also have a productivity jobs), more than encouraging women to broader impact on development outcomes. Smart 16 For more information World Bank (forthcoming in 2012), “Women’s Economic Empowerment in Latin America and the Caribbean: Lessons Learned from the World Bank’s Gender Action Plan.” 17 Ricardo Paes de Barros, Pedro Olinto, Trine Lunde, Mirela Carvalho (2011) “The Impact of Access to Free Childcare on Women’s Labor Market Outcomes: Evidence from a Randomized Trial in Low-income Neighborhoods of Rio de Janeiro. 2011 World Bank Economists’ Forum.” 18 Bannon, Ian and Correia, Maria (Editors), 2006: “The other half of gender,” The World Bank. 19 http://www.promundo.org.br/en/ 35 policies will complement traditional interventions Given the non-negligible increase in female with agency-targeted components. An example of single-headed households, particularly in urban smart policy is the Nicaraguan Atención a Crisis pilot areas where they can be one out of every five combined a traditional CCT to increase the asset households, it is important to design programs base and risk management capacity of rural poor to support these vulnerable households. To date, households exposed to weather risk (droughts). Its there have been relatively few programs targeted activities aimed at improving health, education and to this group. Options for consideration include: nutrition outcomes. While all beneficiary women conditional cash transfer programs for children of received the cash transfers, one-third of them single-headed female households, quality day-care received an additional scholarship to send one and after-school programs, mentoring for children household member to a vocational training course. of working mothers, nutritional and educational Another third received a business grant and technical support, and youth groups. assistance for productive investments in livestock or non-agricultural activities. The evaluation found that Finally, it is important to expand the knowledge when women increased their aspirations through base of what works to promote greater gender social interaction and communication with successful equity. The LAC Poverty, Gender and Equity unit is and motivated female leaders, they were more launching a Gender Impact Evaluation Initiative, likely to make higher human capital investments. with the main objective the filling of critical In fact, women who received the productive grant knowledge gaps around policies and interventions The Effect of Women’s Economic Power in Latin America and the Caribbean and worked in non-agricultural self-employment for equality of assets, economic opportunities and increased their incomes by an additional 100 percent agency. The evaluations will identify key policies and (on top of the gain from the program intervention) initial conditions in order to distinguish what works when they were in a setting where all leaders around and what does not (and for whom) in order to achieve them had also received the productive grant.20 improvements in gender equity. 20 Macours, Karen and Vakis, Renos, 2009. “Changing households’ investments and aspirations through social interactions : evidence from a randomized transfer program,” Policy Research Working Paper Series 5137, The World Bank 36 References Azevedo, João Pedro, María Eugenia Dávalos, Carolina Barros, Ricardo Paes de, Pedro Olinto, Trine Lunde, Diaz-Bonilla, Bernardo Atuesta, Raul Andres Mirela Carvalho (2011) “The Impact of Access Castañeda (2011). “Fifteen Years of Inequality to Free Childcare on Women’s Labor Market in Latin America: How Have Labor Markets Outcomes: Evidence from a Randomized Trial in Helped?” World Bank, mimeo. 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Available in http://www.uff.br/ Muñoz (2011). “Work and Family: Latin American revistaeconomica/V8N1/RICARDO.PDF and Caribbean Women in Search of a New Balance.” World Bank: Washington, D.C. 37 Fournier, M., 2001. “Inequality decomposition by World Bank (2011)a. “On the Edge of Uncertainty: factor component: a ‘rank-correlation’ approach Poverty Reduction in Latin America and the illustrated on the Taiwanese case.” Recherches Caribbean During the Great Recession and économiques de Louvain, 2001/4 Vol. 67, p. 381- Beyond”. Washington, D.C.: LCSPP Poverty and 403. DOI : 10.3917/rel.674.0381 Labor Brief, No. 3. Hoyos, Alejandro and Hugo Ñopo (2010). “Evolution World Bank (2011)b. “A Break with History: Fifteen of gender gaps in Latin America at the turn of Years of Inequality Reduction in Latin America”. the twentieth century: An addendum to ‘New Washington, DC: LCSPP Poverty and Labor Brief, century, old disparities.’” IDB WORKING PAPER No. 2. SERIES No. IDB-WP-176 World Bank, (forthcoming in 2012). “Women’s ICF Macro (2009). Demographic and Health Survey Economic Empowerment in Latin America and Interviewer’s Manual. Measure DHS Basic the Caribbean: Lessons Learned from the World Documentation No. 2. Calverton, Maryland, Bank’s Gender Action Plan.” U.S.A.: ICF Macro WDR (2012), “World Development Report 2012: López-Calva, Luis Felipe and Nora Claudia Lustig (eds) Gender Equality and Development.” World Bank. (2010). “Declining Inequality in Latin America, A The Effect of Women’s Economic Power in Latin America and the Caribbean Decade of Progress?” Brookings Institution Press and United Nations Development Programme, c. 253 pp. Lustig, Nora & Leonardo Gasparini (2011). “The Rise and Fall of Income Inequality in Latin America.” Working Papers 1110, Tulane University, Department of Economics. Macours, Karen and Renos Vakis (2009) “Changing households’investments and aspirations through social interactions : evidence from a randomized transfer program” Policy Research Working Paper Series 5137, The World Bank. UNICEF, ECLAC (2007). “Teenage motherhood in Latin America and the Caribbean Trends, problems and challenges”. United Nations (1998). “Principles and Recommendations for Population and Housing Censuses “Sales No. E.98.XVII.8 New York, 1998 Paragraph 1.324 World Bank (2010). “Did Latin America Learn to Shield its Poor from Economic Shocks?” Washington, D.C.: LCSPP Poverty and Labor Brief, No. 1. 38 Annex Table A1. Survey by country and years. Relevant information on the Socio-Economic Database for Latin America and the Caribbean (SEDLAC) Country Name of survey Acronym Coverage Circa 2000 Circa 2010 Encuesta Permanente de Argentina EPH-C Urban-31 cities 2000 2010 Hogares-Continua Encuesta Continua de Bolivia ECH Urban 2000 2008 Hogares- MECOVI Pesquisa Nacional por Brazil PNAD National 2001 2009 Amostra de Domicilios Encuesta de Caracterización Chile CASEN National 2000 2009 Socioeconómica Nacional Gran Encuesta Integrada de Colombia GEIH National 2002 2010 Hogares Encuesta de Hogares de Costa Rica EHPM National 2000 2008 Propósitos Múltiples Dominican Encuesta Nacional de Fuerza ENFT National 2000 2010 Republic de Trabajo Annex Encuesta de Empleo, Ecuador ENEMDU National 2003 2010 Desempleo y Subempleo Encuesta de Hogares de El Salvador EHPM National 2000 2010 Propósitos Múltiples Encuesta Nacional de Guatemala ENCOVI National 2000 2011 Condiciones de Vida 39 Relevant information on the Socio-Economic Database for Latin America and the Caribbean (SEDLAC) Country Name of survey Acronym Coverage Circa 2000 Circa 2010 Encuesta Permanente de Honduras Hogares de Propósitos EPHPM National 1999 2009 Múltiples Encuesta Nacional de Mexico Ingresos y Gastos de los ENIGH National 2000 2010 Hogares Panama Encuesta de Hogares EH National 2001 2010 Encuesta Permanente de Paraguay EPH National 1999 2010 Hogares Encuesta Nacional de Peru ENAHO National 2002 2010 Hogares Encuesta Continua de Uruguay ECH Urban 2000 2010 Hogares LAC average     2000.4 2009.6 The Effect of Women’s Economic Power in Latin America and the Caribbean Figure A1. Compare women’s contribution to poverty reduction in rural and urban areas (2000-2010, $4 USD/PPP). Men Women Other 0% Rural percentage change -10% -8% -8% -6% -10% -20% -17% -23% -30% -29% -40% -45% -33% 0% -4% -3% Urban percentage change -10% -6% -7% -20% -22% -30% -27% -32% -40% -47% -37% Share of occupied Labor income Pension Share of occupied Labor income Pension Non labor income Source: Author’s calculations, SEDLAC data, 2011 (CEDLAS and the World Bank). Note: Poverty defined by Headcount ratio at $ 4 USD/PPP. Please see footnote 4 for a brief explanation of the methodology used. 40 Figure A2. Labor income was more important in LAC’s Growing Urban Areas than in Rural Areas (2000-2010, $2.5 USD/PPP). Men Women Other 0% Poverty reduction bene ted Poverty reduction bene ted -10% -5% -5% -8% -15% -7% by rural areas -20% -26% -30% -30% -30% -40% -43% 0% -2% -3% -4% -6% -10% by urban areas -20% -24% -30% -33% -33% -29% -39% -40% Share of occupied Labor income Pension Share of occupied Labor income Pension Non labor income Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank). Please see footnote 5 for a brief explanation of the methodology used. Figure A3. Household’s headship and moderate poverty reduction (2000-2010, $4 USD/PPP) (urban, rural, urban with kids) Circa 2000 Circa 2010 70% 60% 50% Headcount ratio ($4) 40% 30% 20% 10% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank) Annex 41 Figure A4. Percentage of male adults by economic household’s headship in LAC (2010) Circa 2010 45% 40% % of adult men (15-64 years old) 35% 30% 25% 20% 15% 10% 5% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank) Figure A5. Household’s size by economic household’s headship in LAC (2010) (urban, rural, urban with kids) The Effect of Women’s Economic Power in Latin America and the Caribbean Circa 2010 6,0 5,0 4,0 Household members 3,0 2,0 1,0 0,0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank) 42 Figure A6. Percentage of children (under 15) by economic household’s headship in LAC (2010) (urban, rural, urban with kids) Circa 2010 50% 45% 40% % of children under 15 years old 35% 30% 25% 20% 15% 10% 5% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank) Figure A7. Percentage of elderly (over 64) by economic household’s headship in LAC (2010) (urban, rural, urban with kids) Circa 2010 16% 14% 12% % of adults over 64 years old 10% 8% 6% 4% 2% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Share of women participation on the household income Rural Urban Urban and kids Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank) Annex 43 Figure A8. Gender gap in average age in each by occupation in Brazil Year Occupation Circa 2000 Circa 2010 Professionals Senior o cials Technicians Clerks Machine operators Craft workers Service and market sales Skilled agricultural Elementary occupation 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 Average age (years) Average age (years) Source: Author’s calculation. Data: Household survey data (Brazil) in 2000 and 2010 Note: The red line is the median value of the parameter considering all occupation together in the country considered. The dotted grey line is the median value of the parameter considering all occupation and all countries together (Brazil, Chile, Mexico, Peru). The occupations are ranked by median labor income, from the top paid to the bottom paid occupation. The Effect of Women’s Economic Power in Latin America and the Caribbean Figure A9. Acceptability of wife-beating (percentage of women who said that wife-beating is justified for at least one reason) Ecuador 2004 38.2 Haiti 2005/6 28.5 Paraguay 2008 22.9 Bolivia 2008 16.5 Honduras 2005/6 15.6 Nicaragua 2006/7 13.8 Peru 2007/8 5.3 Dominican Republic 2007 4.3 Jamaica 2008/9 2.9 0 5 10 15 20 25 30 35 40 45 Source: Bott S, Guedes A, Goodwin M, Mendoza J (forthcoming) Violence against women in Latin America and the Caribbean: A comparative analysis of population-based data from 12 countries. Washington DC: Pan American Health Organization and the Centers for Disease Control and Prevention. Data: DHS and RHS surveys, various years. 44 Figure A10. Mother’s age at first birth and labor income (by mother’s birth cohort) Circa 2010 550 500 450 400 Per capita labor income 350 300 250 200 150 100 50 0 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Mother´s age at first child 15-20 20-25 25-30 30-35 Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank) Figure A11. Where do teen mothers live (by mother’s birth cohort) Circa 2010 0.95 0.90 0.85 % living in urban areas 0.80 0.75 0.70 0.65 0.60 0.55 0.50 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Mother´s age at first child 15-20 20-25 25-30 30-35 Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank) Annex 45 Figure A12. Percentage of household in each category of share of woman participation in the household income – Circa 2000 and 2010. 60 50 49% 44% Total 40 30 20 16% 17% 12% 11% 13% 13% 10 7% 7% 4% 4% 1% 1% 0 70 64% 62% 60 50 40 Rural 30 The Effect of Women’s Economic Power in Latin America and the Caribbean 20 8% 9% 8% 9% 10% 10 8% 6% 7% 3% 3% 1% 1% 0 70 60 50 45% 39% 40 Urban 30 17% 19% 20 13% 12% 14% 14% 10 7% 4% 7% 5% 1% 1% 0 70 60 47% 50 Urban and kids 40% 40 30 20 15% 13% 14% 16% 15% 15% 10 7% 8% 4% 4% 1% 1% 0 0% 1-20 % 21-40 0% 41-60 % 61-80 % 81-99 % 100% 0% 1-20 % 21-40 0% 41-60 % 61-80 % 81-99 % 100% 2000 2010 Source: Author’s calculations SEDLAC data, 2011 (CEDLAS and the World Bank). 46 The World Bank 1818 H Street, NW, Washington, DC 20433, USA. www.worldbank.org