In 2017, women around the world made up 47 percent of the formal workforce but only earned, on average, 77 percent of men’s earnings. These figures are critical in understanding the staggering inequalities present in the global workforce and the need to address gender inequality through an economic lens. Gender equity and economic empowerment are inextricably linked: Without the ability to make independent financial decisions for themselves and their families, women cannot truly attain equality. Achieving gender equity requires policy interventions that directly address women’s economic equality and empowerment and shines a light on the importance of such empowerment. What do these policy interventions look like and how can they pave the way for equality? Focusing on overcoming barriers that have historically limited women’s financial and economic freedom, such as women’s access to credit, financial independence, and equal pay for equal work, is an important first step.
Acknowledging Institutional Barriers to Credit
To achieve gender equity means that everyone is treated everyone fairly — not necessarily identically. When it comes to equitable treatment regarding access to finance, more often than not, men and women’s needs are distinct and they require separate sets of tools to achieve the same outcome. I learned during my time working in the rural western highlands of Guatemala that to ensure men and women are receiving credit at the same rate, it is important to consider different institutional barriers they each face.
Specifically, women are more likely to work primarily or exclusively in the unpaid domestic sector and as such, their employment and salary history are undocumented making it difficult or impossible to provide proof of work and financial stability. Such situations often prevent them from obtaining bank loans or credit to establish a small business, grow equity, purchase land, or otherwise increase their revenues. Men, however, are more likely to work outside the home in formal sectors. Because they can demonstrate formal income, they are more readily able to access financial support from local banks. As a result, their ability to start a business or borrow money to purchase land is greater. In these cases, it is critical to not turn a blind eye to the gap of formal documentation that women often face to obtain financial backing in the first place.