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Gender Inequality in China’s Workforce is Bad News for the Economy

Economic News: Over the last few decades, China has risen to become an economic power. However, the Peterson Institute for International Economics (PIIE), shows that the rise put women at a disadvantage and worsened gender inequality in China’s workforce.

In contrast, other major economies, such as Japan, the US, and the European Union have made progress in reducing the gender gap over the years in their respective labor markets.

A report released last week compared data on male and female labor force participation rates by the International Labor Organization. It’s a United Nations agency focusing on issues affecting workers globally.

The participation rate in the labor force is the percentage of men and women between the ages of 15 and 64 in employment or looking for a job.

According to the PIIE report, a significant factor behind the widening gap in China’s workforce is the loss of state control over the marketplace since the former leader Deng Xiaoping liberalized China’s economy.

Since 1978, a series of economic reforms kicked off decades of rapid economic growth in China.

However, it gave the private sector and state-owned enterprises more leverage in a competitive economic environment to discriminate against women in the workforce and pay.


China’s track record

The PIIE report highlights the widening gender gap in China’s labor market in employment opportunities and potential pay.

However, China didn’t always have such a poor track record in giving women equal employment opportunities.

According to a report published in January, China’s female labor force participation rate in the early 1980s exceeded that of many developed countries. The Australian National University released the report in the Asia and Pacific Policy Studies journal.

China’s gender wage gap was also much smaller compared to other major economies, like the US. The earlier success resulted from a strong government commitment to promoting gender equality.

These kinds of plans could easily translate into actual policies and actions at the time. This was due to state control over large swathes of the economy.

Encouraging women’s participation in the workforce became a part of the overall national development plans during that time. The Public sector’s dominion over the economy played a crucial role in implementing gender policies when China centrally controlled the system.

Leveling the economic playing field at work benefited the entire economy – not just Chinese women.

However, women’s participation in the workforce has dwindled over the years. This is true even though China leapfrogged from one of the poorest economies to become the second-largest globally.

Women’s labor force participation rates have dropped to levels lower than international standards. Gender gaps in pay have also widened, as well as widespread gender discrimination in the labor market.

There is also evidence of a worsening bias against a woman’s right to work and leadership in the workplace.

Declining state-supported childcare facilities has forced women to stay at home to take care of their children.


Dragging the economy

According to the World Economic Forum report, China is one of the countries with the worst gender inequality in economic, health, education, and political terms.

The World Economic Forum (WEF) ranked China in the 106th position out of 153 countries, with the smallest overall gender gap to the worst.

China ranked 91st out of 153 countries in terms of the gender gap in economic participation and opportunity. It was below other emerging economies such as Brazil and Russia, but above India.

According to the PIIE report, if China’s widening gender gap in the labor force persists, then it could become a bigger burden on the economy when the growth is slowing down.

China’s labor force is shrinking due to declining birth rates. The aging population is also growing, as is life expectancy. Economists have warned that such demographic changes will weigh on China’s economic growth prospects.


Increase gender equality

However, PIIE researchers wrote that increasing gender equality could counter this drag.

Increasing gender equality requires greater policy intervention, targeted support for women, and stringent enforcement of antidiscrimination laws.

Finally, leveling the economic playing field at work would benefit not only Chinese women but the entire economy.

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