All the Gulf economic visions aim to increase female labor force participation, in the pursuit of economic equality in the gender domain, as well as the broad economic benefits that accrue when a society makes uses of its females’ abilities, and not just those belonging to its males. However, policymakers the world over face considerable difficulty in determining the best policies for enabling women, as some previous efforts have indirectly backfired, affirming the need to regularly revise policies, drawing upon the experience of other countries.
The problem arises from the existence of biological differences between the two sexes, namely the fact that only women bear children and nurse them directly, which gives males an advantage in performing certain jobs that require sustained work, and that do not suit those who prefer flexibility in their working hours.
As a response, many governments have developed labor market reforms designed to make it easier for women to participate in the labor force without doing so at the expense of having children or nursing them naturally. For example, the law might require companies to give mothers two months of paid leave after birth, or to provide nurseries in the office for employees who have children once the total number of employees exceeds a specified amount.
At first sight, such policies appear to expand the options available to women, and therefore improve economic and social equality. However, there might be some adverse, unintended consequences, because these types of regulations make employing women more expensive than employing men, which may make companies favor males—covertly, to avoid being held accountable.
This problem is analogous to optimal minimum-wage determination: workers benefit from a higher minimum wage, but they also suffer from being made redundant, or not being employed in the first place, due to increases in the minimum wage.
Economists Claudia Olivetti (Boston College, USA) and Barbara Petrongolo (Queen Mary University, UK) undertook research about the best ways of economically enabling women. Their study is based on summarizing what one can infer from the experiences of various advanced economies in the domain of female-friendly labor market policies, as there exist significant difference between countries such as the USA, which offer limited assistance to females, and the countries of the European Union, which are characterized by strong support for females. As the Gulf countries look to improve female labor force participation, policymakers may benefit from the researcher in their efforts to design policies that enable women.
Based on global comparisons, Olivetti and Petrongolo concluded that there is a non-linear, hump-shaped, relationship between government-mandated maternity leave, and female labor force participation, with the highest levels of participation associated with leave of 50 weeks. In countries such as the USA, where maternity leave is 12 weeks, female participation is lower as women struggle to balance the demands of motherhood with those of work. In contrast, in countries such as Sweden, where the corresponding figure is 70 weeks, the length of the leave impairs female professional development, as their skills atrophy, biasing labor force participation in favor of males.
The two economists discovered an additional corollary of short maternity leaves, which is the decision by females to delay child bearing, sometimes until the 30s or 40s, whereupon woman will withdraw from the labor market for an extended period of time to rear children, with their circumstances not allowing them to return to the workforce.
The Gulf governments give females significant support in the labor market. For example, in Saudi Arabia, women working in the public sector are allowed two fewer hours of work daily for the first two years after giving birth. However, one of the reasons for affording women such support is the government’s desire to raise the living standards of the citizens working the public sector, even if that comes at the expense of economic criteria, such as the efficiency of the public sector, or setting salaries in a cost-effective manner.
However, in light of falling oil prices, and the governments’ decision to increase the private-sector share of employment among citizens at the expense of public-sector employment, the Gulf governments may be forced to revise some of these policies, to ensure their compatibility with efficiency concerns. Accordingly, authorities should consult with private sector representatives, as well as women’s groups, to design policies that suit the new format of labor markets.
There should also be an effort to benefit from substantive research, and to consult with leading global economists specializing in female labor market issues. Yet the Gulf governments also need to exercise caution, as the knowledge of global experts is based primarily upon the experience of traditional advanced economies, which provide the high-quality data that facilitates analysis. The Gulf economies have a fundamentally different structure to those in the western world, most notably due to migrant workers representing the majority of the workforce. As such, efforts should be made to cooperate with the experts who have studied western economies to perform new studies tailored to the specific needs of the GCC.
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