Opportunities for Men and Women: Emerging Europe and Central Asia Sarosh Sattar November 28, 2011 Europe and Central Asia Region The World Bank

Outline Motivation and Objective Economic context Education Labor market outcomes Entrepreneurship Concluding remarks

Motivation and Objective Rapid growth, so who was benefiting? Big crisis, so who was hurt? Objective Do women and men have comparable outcomes in key economic spheres in ECA? If not, what are the potential sources of the differences?

Motivation: The Economic Context Economic growth, Sectoral contributions, and Demographic profile

ECA economic growth was robust ECA grew robustly compared to LAC and the world average. ECA grew well above the global average The ECA region was growing robustly so one obvious question is who is benefiting from this growth? We tend to assume that growth is equally distributed, but this is a naïve assumption.

The ascendance of the services sector Globally, the importance of services sectors grew in GDP while the share of agriculture and services shrank There is a large global shift occurring which is the ascendance of the services sector in almost all regions. However, the services sector is very heterogeneous and includes activities such as high productivity ICT and doctors and low productivity services such as small retailers and taxi drivers. In ECA, the services sector constitutes about 62 percent of GDP value added compared to about 70 percent for the world average.

ECA’s population is older and aging Though ECA ‘s population currently is more in their prime age years, it is because of fewer children. The higher share in ECA vs the world average of only 3 percentage points of the population in the 65+ age group translates into 13 million more persons. By 2025 it will be 17 percent vs. 11 percent.

Human Capital Academic performance, School enrollments, and Fields of study

Small enrollment gender gaps in ECA The gender gap in ECA is minimal and comparable to high income OECD countries. Though slightly more boys than girls attend school, the gaps are comparable to what is seen in high income OECD countries. This being said, primary school enrollment rates are in the 90 percent range for girls and boys, while secondary school enrollment rates are in the 80 – 82 percent enrollment rates – which lag behind the high income OECD countries by about 10 percentage points.

International comparison of academic performance, 2009 The gender gap in academic performance is small and on average girls do better than boys Program for International Student Assessment which uses a standardized method to test 15 year olds across different countries. 16 ECA countries were included in this round including Russian Federation, Turkey, two from Central Asia, 3 from the Western Balkans (Croatia, Montenegro, and Serbia), several of the New Member States.

More women than men go to university Women’s gross tertiary enrollment rates exceed those of men – and higher incomes will only accentuate this inequality. This is where the difference really begin in terms of human capital assets of males and females.

Fields of study With the exception of sciences and engineering, female students out numbered male students in other fields. The differences in male and female human capital accumulation continues. Data year:2007 - 2008 Science&Eng: Science+Enginerring Social & Business and law: Social Science+Humanity and Art Education, Health and Welfare: Education+ health and welfare Other: Agriculture+Service+unspecified EU: missing Luxembourg

Labor market outcomes

ECA’s labor force participation rates High income OECD averages, by gender Globally there is a gender gap. ECA’s female and male labor force participation rates are well below the high income OECD averages Compared to the global average, female labor force participation rates are slightly above the average (59 vs. 57 percent) while male rates are low (74 vs. 83 percent). It is difficult to say whether participation rates are “high” or “low” since the key is whether rates are sufficient for achieving the desired or needed economic growth and to prevent falling into poverty now or later.

Labor force participation rates were stagnant ECA’s participation rates stayed stagnant despite high economic growth . NO Data for serbia

Employment by sector in ECA, 2008 The majority of women employees are in the services sector which is the growing sector of the economy. 66% of women work in services Two-thirds of all women work in services. Many men continue to work in the industry sector which is quite volatile since it includes construction.

Number of jobs lost or gained by sector, 1999-2008 Though men and women gained more or less an equal number of the new jobs over the last decade, women’s gains were almost all in the services sector. Over the last decade, women shifted out of agriculture and into services, whereas men shifted out of agriculture and into industry and services.

Occupations by gender Women disproportion- ately pursue professional & technical jobs compared to men. 39% of women are professionals or technicians These 4 occupations comprise 80% of all occupations. The other thing noteworthy is that many women are in the formal sector and prefer the public sector. Thus, when we discuss public sector reforms in the Bank, it is important to take into account the gender dimension.

Raw gender wage gap The gender wage gap is large. Moreover, once corrected for human capital it is very larger. The raw gender wage gap is 29 percent and once we correct for hours worked it falls to 22 percent.

Gender Gap in time use (in number of hours per day) Women in ECA are involved more in domestic activities than men and less than As expected, women work more than men at household chores and in ECA this results in fewer hours spent at work.

Relatively few young children in ECA are in childcare Formal childcare in ECA is not prevalent With the demise of the Soviet Union, child care opportunities fells. We understand little how the lack of childcare affects women’s occupational choice, early retirement, and how far from home women chose to work. We do know from US analysis that women who leave the labor force for one year for maternity purposes and return, lose 10 percent of income over their life time.

Relatively few young children in ECA are in childcare In ECA, women with children decrease their participation in the labor force significantly

Entrepreneurship

Business activity is relatively modest New business activity is low in ECA compared to other regions of the world

Women employers Yet, the gender gap is still large

Female firm ownership by sector

Women participate in the private sector but are poorly represented in key roles This is for registered firms with 5 or more employees

Some findings about female owned firms They are smaller in size whether in terms of sales revenues or employees Women-owned firms concentrate in different sectors than male-owned firms. Female-owned firms are as profitable as male owned firms holding firm characteristics constant. Female owned firms pay a slightly higher interest rate than men (0.6%). From the World Bank perspective this indicates that any procurement rules that prevent small firms are bidding for contracts or favor one sector over another could inadvertently affect male or female owned firms disproportionately.

Concluding remarks

Overarching messages Europe and Central Asia’s gender advantage is eroding and the rest of the world is catching up rapidly. The last decade opened up opportunities for women and took away some for men, but occupational segregation and wage disparities hinder women’s progress. The demographic transition has large and different implications for men and women in many areas including pensions and labor markets.