Afghanistan’s Moment of Risk and Opportunity
A Path to Peace for the Country and the Region
Over the past nine months, the global spread of COVID-19 has forced governments and businesses around the world to take drastic action—both to protect public health and to mitigate the devastating effects of the coronavirus pandemic on national economies and citizens’ finances. Bold new fiscal packages and corporate policies, many of which would have seemed unthinkable before the crisis, have been enacted with remarkable speed. While these initiatives have helped to stabilize the global economy during a once-in-a-lifetime emergency, far too many of them have failed to sufficiently consider the half of the world’s population that is arguably more critical to a full economic recovery: women.
Though men are more likely to become severely ill or to die from the novel coronavirus, the economic effects of COVID-19 have hit women harder. Worldwide, the pandemic has devastated female-dominated fields, while increasing the unpaid caregiving responsibilities that women disproportionately shoulder. If policymakers and corporate leaders do not make women’s economic participation central to their post-pandemic recovery planning, even the modest economic gains that women have made in recent decades will be lost—and the world’s economic prospects will significantly weaken as a result.
In many countries, women are more likely to work in sectors—including hospitality, education, food service, and retail—that have proved especially vulnerable during the crisis. In the developing world, women typically work in the informal economy—as domestic workers or market vendors, for example—and thus have little protection against sudden unemployment. Though women make up just 39 percent of the global labor force, an analysis by the McKinsey Global Institute in July found that they accounted for 54 percent of pandemic-related job losses.
Since March, when lockdowns forced schools and daycare centers in many countries to close, the lion’s share of the unexpected homeschooling and childcare has fallen to women. Whether or not they are employed, and in economies of every size, women’s unpaid care obligations have multiplied. In May, the global consulting firm Dalberg estimated that COVID-19 had increased the time women in India spend on family responsibilities by 30 percent. The following month, a report by Oxfam and Promundo found that women in the United States were spending ten to 15 hours more per week on caregiving responsibilities than they had before the pandemic.
Unequal access to financial and digital services has further increased women’s vulnerability during the crisis. Globally, women have 77 percent of the access to financial services that men do and as a result are less likely than men to benefit from stimulus support from their governments. A November 2019 analysis by the International Telecommunication Union found that, globally, women are 17 percent less likely than men to have access to the Internet—a gap that has grown more burdensome during the pandemic, now that many businesses, essential services, and children’s classes have gone online.
Childcare is not a “women’s issue”—it is a vital piece of economic infrastructure.
These inequities not only affect the daily lives of women worldwide but also undermine prospects for a global economic recovery. If the gendered effects of the pandemic remain unaddressed, McKinsey found, global GDP could be $1 trillion lower by 2030 than it would have been if the impact of COVID-19 were gender-neutral. Conversely, taking immediate action to counter COVID-19’s gender-regressive effects would result in $13 trillion in global GDP gains by 2030.
These figures almost certainly underestimate the impact that COVID-19’s gender-regressive effects will have on the global economy. Since McKinsey’s report was released in July, the gendered costs of the pandemic have increased in many countries. In the United States, 80 percent of the 1.1 million people who dropped out of the labor force in September were women. In October, the Centre for Monitoring Indian Economy reported that women in India were withdrawing from the workforce at a rate 2.5 times as fast as that of men.
Even in wealthy European countries—where, thanks to targeted government stimulus spending and strong employment protections, women were less likely to outright lose their jobs than they were elsewhere in the world—female workers saw their wages decline faster than those of their male counterparts. A December analysis by the International Labor Organization found that in Germany, women’s wages had declined by 8.6 percent, nearly double the drop of men. A recent report by UN Women found that as a direct result of pandemic-related unemployment and lost earnings, women’s poverty rates have increased by 9.1 percent worldwide, and the poverty gap between men and women is widening after years of steady decline.
As the United States and other countries rebuild after the pandemic, they can chart a new course that is both fairer for women and better for the global economy as a whole. To do so, policymakers must invest in the care economy and close gender gaps in digital and financial services.
COVID-19 has made it clear that childcare is not a “women’s issue”—it is a core element of the economy. While some countries spend a significant percentage of GDP on childcare—1.1 percent in Sweden and 0.7 percent in Norway, for instance—most countries do not. The share is only 0.01 percent in Mexico and 0.05 percent in the United States.
Governments can address this gap. They can adopt tax policies that encourage spouses to work—for example, tax deductions to help defray childcare costs. They can help finance a more professionalized and better-compensated childcare industry, thereby stimulating the economy by helping more women to go back to work and creating more jobs in childcare. They can also encourage employers to strengthen family-friendly policies, including flexible and part-time programs, in order to support workers experiencing an increased childcare burden during the pandemic and beyond. Such reforms would reflect the societal and economic value of caregiving and generate trillions in global GDP growth.
Though the gendered effects of the COVID-19 crisis are being felt in advanced and developing economies alike, they have not been distributed evenly across countries. In Australia, Denmark, Norway, and the United Kingdom, for example, the employment gap between men and women has actually narrowed over the course of the pandemic. What set these countries apart was the fact that their governments took bold action, early in the pandemic, creating childcare programs to support working parents through school and daycare closures.
To close gender gaps in digital and financial services, there are a number of actions that governments can take. They can invest in digital infrastructure, particularly in emerging economies. India’s government, for example, delivered emergency payments directly to 200 million women on the back of its earlier large-scale investments in digital identification and financial inclusion. Governments can also address gender stereotypes that inhibit women’s access to mobile phones and focus on women-owned enterprises in stimulus-spending programs.
Women’s economic participation is not simply a matter of fairness—it is an economic imperative that governments and businesses need to elevate to improve growth and standards of living around the world. Recovering from the worst economic disruption since World War II will require drawing on the economic potential of 100 percent of the population. Doing so will also ensure that we can create maximum growth in the post-pandemic world.