65932 Opportunities for Men and Women: Emerging Europe and Central Asia Sarosh Sattar Executive Summary THE WORLD BANK WASHINGTON, D.C. Executive Summary T he countries of Central and Eastern Europe and Central Asia have a long history of striving for gender equality, especially in the public sphere. Not only was this an important goal during the socialist era, but governments continued to pursue gender equality even during the difficult years of transition. The governments in the region allocated substantial resources toward the health and education of both women and men. They also adopted legislation that treated women and men equally in the la- bor market and they provided child care services. During much of the last century, the region surpassed countries—both developing and developed—in establishing the equal treatment of women and men. Much of the first decade of the 21st century was defined by robust growth. The new member states of the European Union saw major structural changes, while the Commonwealth of Independent States bounced back from the financial crisis in the Russian Federation at the end of the previous decade. Thus, for several years, the econ- omies of the region experienced robust growth. However, this period of prosperity was followed by a global financial crisis, which hit the region severely, especially in 2009 and 2010. The question remains whether men and women benefited equally over the course of the last decade, with its major economic developments, or whether the gaps between men and women and girls and boys changed significantly. This report reviews changes in gender inequalities in Europe and Central Asia over the last decade, with a particular focus on economic opportunities both in labor mar- kets and in entrepreneurial activity. In addition, given the importance of health and education in opening up opportunities for men and women in the economic sphere, the report discusses the changes in human capital endowments in this area as well. Un- fortunately, the lack of data prevents us from covering the role of other assets, such as property or financial assets, in broadening opportunities for women. There is a significant body of work on gender equality to build upon. Most re- cently, the World Bank published World Development Report 2012: Gender Equality and Development, which examines the progress in women’s lives and provides policy recommendations to advance gender equality (World Bank 2011a). The report also 1 provides a useful framework for understanding Gender disparities still remain in many areas, the underlying causes as well as consequences. and even in rich countries. The most persistent Gender in Transition, an earlier World Bank report and egregious gaps include excess deaths of specific to the region, also reviewed the gender- girls and women…, disparities in girls’ school- based differences in economic opportunities, es- ing…, unequal access to economic opportuni- pecially in the labor market and human capital, ties…, [and] differences in voice in households over the first decade of transition in the 1990s and society. (World Bank 2011a, xxi) (Paci 2002). The remainder of this executive summary is Income growth by itself does not deliver structured as follows. The next section, A, reviews greater gender equality on all fronts… Gen- the main aspects of the World Development Re- der gaps persist where girls and women face port on gender and development. The following other disadvantages… Markets, institutions, sections, B and C, discuss the main messages of this and households can also combine to limit report and policy priorities, respectively. Section D progress… globalization can help…, but [the] makes some closing remarks. impact [of the related forces] will be muted without effective domestic public action. (World Bank 2011a, xxi) Links to World Development Report 2012: Gender Equality and Development As the report suggests, there is an important role for policies targeted toward reducing the most World Development Report 2012: Gender Equality costly gender disparities that are not responsive to and Development examines various dimensions of growth, and closing the most egregious gender gaps gender equality in the context of the development has become more urgent now than it was two or process. In particular, gender equality is viewed three decades ago. through an economic lens, with a focus on the re- An overlap exists between World Develop- lationship among (1) the accumulation of endow- ment Report 2012 and this report. The methodol- ments (such as human capital and financial assets), ogy of examining endowments and the access to (2) access to economic opportunities and their re- economic opportunities and their returns is ap- turns, and (3) agency, or the ability to take actions plied in the analysis of gender issues in Europe and and make choices that impact the individual, house- Central Asia. Our report discusses issues of hu- hold, or public spheres. These factors interact and man capital, such as education and health, which affect one another significantly. is the most important asset of the majority of the The report’s main messages are as follows: population. In our report, the issues of economic opportunities and their returns are discussed in Gender equality is a core development objec- the context of labor markets. The entrepreneur- tive in its own right. . . . Greater gender equal- ship chapter (chapter 3) touches on women’s ity can enhance productivity, improve devel- business assets and on economic opportunities. opment outcomes for the next generation, However, our report does not address agency, a and make institutions more representative. topic extensively addressed in World Development (World Bank 2011a, xx) Report 2012. The concept of agency—the ability to exer- Development has closed some gender gaps. cise choice over consequential decisions—is im- The disadvantages faced by women and girls portant in furthering our understanding and in- that have shrunk most rapidly over the past corporating into analysis, particularly where there quarter century include educational enroll- are large discrepancies between men and women ment…, life expectancy…, and labor force in the private (household) and public spheres. In participation. (World Bank 2011a, xx) Europe and Central Asia, women and men appear 2 Opportunities for Men and Women: Emerging Europe and Central Asia Figure eX. 1 The Gender Gap in Human Capital a. Gender gap, secondary gross enrollment rate b. Gap in life expectancy, women and men percentage points number of years, 2009 15 10 9 10 8 7 5 6 5 0 4 3 –5 2 1 –10 0 ECA LAC MNA SSA EAP SAS ECA LAC MNA SSA EAP SAS 1999 2009 Source: World Development indicators Database, World Bank, Washington, DC, http://data.worldbank.org/data-catalog/world-development- indicators/. Note: The gender gap measures the difference in the gross secondary enrollment rate or life expectancy of males and females. eAP = east Asia and the Pacific. eCA = europe and Central Asia. LAC = Latin America and the Caribbean. MNA = Middle east and North Africa. SAS = South Asia. SSA = Sub-Saharan Africa. All regional data are for developing countries only. to have equal agency because of factors such as Main Messages the gender-blind legal system, women’s compara- ble labor force participation rates, and girls’ access This section consolidates the analysis in our main to education. However, if equal agency is to exist, report to identify the overarching messages. This men and women may need different types of in- approach allows policy makers and civil society stitutional support given the differences between alike to see the significance of individual gender them. gaps within the larger context of economic devel- Agency in the context of Europe and Cen- opment and prosperity. Presented below are the tral Asia has changed over the last two decades report’s three take-away messages. in concert with the changes brought about by the First, the region’s advantage in gender equal- contraction of the role of the state and, more gen- ity has eroded, with the result that the region now erally, the transition to a market economy and the looks more similar to the rest of the world. The development of large informal markets. Across gender gaps in school gross enrollment rates have the board in the region, there has been a reduc- fallen further in Europe and Central Asia over the tion in fertility-related benefits, especially the past decade, but so have the world average gaps, contraction in childcare services. The scarcity of given the substantial progress achieved in improv- childcare availability has narrowed women’s op- ing educational outputs (see figure 1).1 Globally, portunities, especially in the labor market. Agen- female enrollment rates have risen more rapidly cy has also been circumscribed by low incomes than male enrollment rates at both the primary and on the one hand and, on the other hand, by a lack secondary school levels so that global gender gaps of the public services (for example, childcare) in 2009 had fallen to 4 and 2 percentage points, re- that allow women to function independently. spectively, compared to Europe and Central Asia’s However, women have much greater agency in the region because of human capital endow- ments, independent sources of income, and the 1 Measured using the difference between male and legal framework. female gross enrollment rates. Executive Summary 3 1 and 3 percentage points. In terms of health out- menia, Azerbaijan, and Georgia, the corresponding comes, the region exhibits health indicators that number is 16, 15, and 11, respectively. The miss- are better than the world averages, especially the ing girls at birth reflect covert discrimination in maternal mortality rates, which, in the region, are the household, resulting from the combination of the lowest among all developing countries. How- strong preferences for sons, declining fertility, and ever, in terms of female life expectancy, the region the spread of prenatal sex determination. The sex ranks below Latin America and the Caribbean, but imbalance is reversed among the population group is comparable to East Asia and the Pacific and the ages 50 years and above by the early demise of men, Middle East and North Africa. Male life expectan- especially in Kazakhstan, Russia, and Ukraine be- cy in the region is unusually low and comparable to cause of poor health, alcoholism, and accidents. the average of Sub-Saharan Africa. Second, the structural changes in the econo- The region’s gender gap in education is similar mies of the region have opened up economic and to the gaps in other predominantly middle income re- employment opportunities for women and reduced gions. One of the key areas where the gender pro- some avenues of prosperity for men. Women play an file of the region is similar to that of the rest of the important role in these economies; they comprise 46 world is in the area of education, especially in pri- percent of the labor force in the region, which is above mary education and, to a lesser extent, in secondary the world average of 40 percent. The labor force education. Net primary enrollment rates in the re- participation rates of women and men in Europe gion are comparable to the world average, with no and Central Asia average 51 and 69 percent, respec- significant gender gap. However, even in the area of tively (figure 2). While female participation rates are secondary education, selected regions such as Latin comparable to the world average, male participation America are quickly converging toward Europe rates are well below the global average of 78 percent. and Central Asia’s high net female and male en- This may be a reflection of many factors, including rollment rates and modest gender gap. Among the the types of jobs being created. Over the last decade, countries in the region that have made significant the region has experienced an expansion in the ser- progress over the last decade, Turkey stands out be- vice sector, while the manufacturing and agriculture cause of an increase of 20 percentage points in fe- sectors have shrunk significantly. The contraction of male secondary enrollment rates. However, Turkey the manufacturing sector in particular has had a dis- continues to show a large gender gap at the second- proportionate and adverse impact on men, while the ary level, as do some minority communities (such growth in the service sector has opened up relatively as the Roma) in Central and Eastern Europe. At the more opportunities for women, who constitute half tertiary level, female enrollment rates exceed male of all workers in the service sector in the region. enrollment rates in most parts of the region, and However, women’s gains in the service sector may the level of inequality appears to increase with de- be only short term. Service sector jobs are diverse velopment. Next to the high-income countries of in terms of occupations and productivity. Service the Organisation for Economic Co-operation and jobs may be found in both the public and private Development, the region has the largest gender gap sectors. In the region, women appear to be dispro- in tertiary education, at 11 percentage points. portionately represented in the public sector, as Health indicators in the region are superior to indicated by several country studies. For example, those in other middle- and low-income countries, ex- if we look at the education sector (which is mostly cept for a sex imbalance among young children that in the public sector), women constitute 91 and 72 has begun to emerge and unusually high mortality percent, respectively, of all primary and secondary rates among prime age men in selected countries. Ar- teachers. However, the fiscal pressures on the large menia, Azerbaijan, and Georgia show the highest public sector are growing because of the need for sex imbalance at birth in the world after China. adjustment following the economic crisis, which hit Thus, in China, 18 more baby boys than baby girls the region severely. Moreover, the role of women in are born per 100 live female births, while, in Ar- the private sector as employees, but also as employ- 4 Opportunities for Men and Women: Emerging Europe and Central Asia Figure eX. 2 Employment Opportunities a. Labor force participation rates, 2009 b. Raw gender wage gap percentage male wages in excess of female wages, % 100 50 45 45 80 40 39 36 35 60 30 25 40 20 18 15 10 20 10 5 0 0 ECA LAC MNA SSA EAP SAS EU10 Central Asia Russian S. Caususes W.Balkans Federation Female Male Sources: For labor force participation rates: World Development indicators Database, World Bank, Washington, DC, http://data.worldbank.org/ data-catalog/world-development-indicators/. For the wage gap: various; see chapter 2. Note: eAP = east Asia and the Pacific. eCA = europe and Central Asia. eu10 = the 10 european union (eu) countries of Central and eastern europe, that is, Bulgaria, the Czech republic, estonia, Hungary, Latvia, Lithuania, Poland, romania, the Slovak republic, and Slovenia. LAC = Latin America and the Caribbean. MNA = Middle east and North Africa. SAS = South Asia. russian Federation, S. Caucasus = southern Cau- casus. SSA = Sub-Saharan Africa. W. Balkans = western Balkans. ers lags significantly with respect to the role of men. Third, the dramatic demographic changes For example, women are much less likely to engage in the region have different implications for men in entrepreneurship, which has long-term implica- and women, which must be taken into account if tions for women’s wealth accumulation. economic growth is to be sustained in the medium The wage gap between men and women remains to long term. Though the total population of the large in the region, and, if human capital endow- region is not expected to change during the first ments are taken into account, the gap is even wider. quarter of this century (a projected −0.1 percent- The wage gap in the region is comparable with the age point decrease), there will be a dramatic change gap observed in other low- and middle-income in the age structure of the population in coming countries. The data indicate that women’s hourly years. The share of the population above 60 years wages are 22 percent less than the hourly wages of of age will rise sharply in 2009–25, from 15 to 25 men, on average, in the region. Moreover, because percent of the population, and women will con- women work fewer hours, the monthly wage gap is stitute 57 percent of this age group. Moreover, 17 larger, indicating that women earn 29 percent less countries in the region will suffer from population than men per month. Women earn systematically implosion, which will result in a shrinking labor less than men even if one controls for differences in force. These countries can ill afford this outcome human capital. The size of the gender wage gap var- given their levels of income and investment. ies greatly within the region. The differences across There will be more elderly people, especially wom- countries are large within the region. The western en, and these people will be vulnerable to old age pov- Balkans (with the exception of Albania), the EU10 erty. A variety of factors increase the probability that countries, Moldova, and Turkey have a gender gap of about 20 percent.2 Other countries show gender 2 The EU10 refers to the 10 European Union (EU) gaps that are among the largest in the world (for ex- countries of Central and Eastern Europe, that is, Bul- ample, Tajikistan, with a gap of about 65 percent), garia, the Czech Republic, Estonia, Hungary, Latvia, while still others (Albania and Russia) have gaps in Lithuania, Poland, Romania, the Slovak Republic, and the intermediate range of about 35 percent. Slovenia. Executive Summary 5 women are more likely than men to fall into poverty. removing the impediments women face in contrib- Women without independent sources of income in uting to the economy. The gaps to fill in the labor old age must rely on the incomes of family members. market in the economies of the region are large and However, even women who work in the formal sec- will become larger in the future. The countries might tor and possess pension rights tend to be more vul- also benefit from the more effective use of women nerable to poverty. Pension rules in many systems because of their higher levels of human capital. in the region allow women to retire early, but this The first policy recommendation: take measures decision has consequences for the level of benefits. to facilitate women’s entry into the labor force so as to Moreover, women live longer, on average, than men, meet the challenges of demographic changes, especially meaning that their low benefits must stretch farther, the aging of the population. Women’s labor force par- likely resulting in a divergence between average pen- ticipation is important for several reasons, includ- sions and average wages over time. Finally, the infor- ing to help ward off old age poverty and to assist mal social safety net may be weakened because older the region’s economies adjust to the contraction women will have fewer children to rely upon. in the labor force. However, at the same time, it is Many countries in the region will have to find a also important that labor market participation not way to encourage more women to participate without impede women in having children. These multiple decreasing women’s fertility. Many of the countries objectives might be accomplished by (1) increasing in Europe and Central Asia with aging or declin- the retirement age of women so as to achieve par- ing populations could experience an economic ity with the retirement age of men; (2) reevaluating contraction because of the shrinking labor force. maternity-related benefits in terms of their effec- To prevent a sharp decline in economic activity, tiveness in increasing fertility, for example, mater- one may adopt the option of trying to maintain the nity leave, child allowances, lump-sum payments size of the labor force by attracting temporarily or for the birth of a child; and (3) providing childcare permanently inactive women or by retaining work- given that its absence may account for the choices ing women in the labor force for a longer period women make in their fields of specialization in ter- of time by delaying retirement (so that the retire- tiary education and in their occupation because of ment age of women is equal to the retirement age compatibility with raising children. of men). Yet, to achieve higher female labor force The second policy recommendation: adopt educa- participation without adversely impacting fertil- tional reforms to reduce the gender imbalances at the ity, the supporting institutional infrastructure (for secondary and tertiary levels. The secondary school example, childcare and appropriate parental leave gender gap (in favor of males) appears, at best, to benefits) needs to be in place, and pension rules be closing only slowly. Country-specific policies are should be amended. needed given that, depending on the country, the cause of the gap may vary significantly across the region, from income to minority status or ethnic- Policy Priorities ity. For example, Roma children (especially girls) are less likely to attend secondary school. At the Policy recommendations that address gender equal- tertiary school level, significantly more women ity in the region could have two main objectives. The than men pursue higher education: the average first goal may be to achieve equal opportunity among female and male gross enrollment rates are 60 and men and women by taking into account their differ- 45 percent, respectively. The lower probability that ent circumstances. Women differ from men in terms men will participate in tertiary schooling may be of their roles in the private sphere, their greater linked to the lower perceived returns to education vulnerability to physical insecurity because of their among men (either in absolute terms or relative to longer life spans, and their fertility, among other fac- what men might earn through migration). Also, tors. The second goal may involve helping societies given the real concerns of the relevance of educa- meet their medium- to long-term economic needs by tion discussed in Skills, Not Just Diplomas: Manag- 6 Opportunities for Men and Women: Emerging Europe and Central Asia ing for Results in Education Systems in Eastern Europe Concluding Remarks and Central Asia (Sondergaard and Murthi 2012), young men may decide to forgo education so as to This report analyzes various markets through a gen- acquire additional work experience and earnings. der lens. It thereby quickly makes two main find- The third policy recommendation: address pock- ings. First, our knowledge of why men and women ets of health disparities on a country-by-country ba- behave differently is limited. For example, why do sis. The region is not free of health disparities, al- women pursue certain fields in education that men though no one health challenge is regionwide. To tend to avoid or why do more women than men address health problems, a comprehensive national migrate from some countries. Second, average eco- program is needed that operates at all levels of gov- nomic indicators can be misleading because they ernment. The countries will need to ensure that an hide the differences in behavior across large groups appropriate strategic, legislative, and policy frame- (in our case, males and females). The importance of work exists, along with adequate institutional ca- the adoption of a gender lens in the development of pacity. In addition, the identification and delivery policies in the region derives in no small part from of specific programs would be required and, to be the high stakes resulting from the dramatic demo- effective, may call for a multifaceted approach that graphic changes and mounting labor resource needs. includes components such as information cam- Moreover, such a lens helps countries identify the paigns to promote the more effective enforcement necessary and appropriate policy and institutional of existing laws (such as road safety campaigns) to framework to allow them to take advantage of un- the more effective provision of health services (for derexploited opportunities (for example, bringing example, emergency care). This is true of the effort more educated women of prime age into the labor to reduce maternal mortality rates, increase male force). Ultimately, the use of disaggregated data to life expectancy, and address the imbalance in the undertake analysis will likely lead to better poli- sex ratio. cies that further the long-term objective of shared growth. Executive Summary 7