Author : Nilanjan Ghosh

Expert Speak India Matters
Published on Mar 07, 2024

Fostering women's participation in the workforce is a cornerstone towards achieving not only a more equitable world but also promoting economic efficiency and sustainable development

Hitting the sweet spot of demographic dividend

This article is part of the series — International Women's Day


This year’s International Women’s Day calls for inclusion. The explicit message of “Inspire Inclusion” entails the celebration of gender diversity and women empowerment. Such a theme has come at a time when only last year, under India’s G20 presidency, “women-led development” was highlighted as a key pillar. This marked a paradigm shift from the ways the role of women had been looked at in large parts of the Global South: from the equity concern of “women empowerment” to the efficiency pillar of “women-led development”. The G20 New Delhi Leaders’ Declaration 2023, therefore, emphasises at least four key phrases here: Enhancing Economic and Social Empowerment; Bridging the Gender Digital Divide; Securing Women’s Food Security, Nutrition and Well-Being; and Driving Gender Inclusive Climate Action. Furthermore, the G20 India Leaders’ Summit also witnessed the formation of a Working Group on the empowerment of women to support the G20 Women’s Ministerial that convened its first meeting during the Brazilian G20 Presidency on 17 January 2024.

The “women-led-development” discourse is a statement towards the promotion of efficiency and sustainability, thereby, helping the cause of reconciling the irreconcilable trinity of equity, efficiency, and sustainability.

Given this background, this essay is a tribute to the “women-led development” discourse that needs more deliberations. At the very outset, one needs to note that the idea of women-led development goes much beyond SDG 5, which talks about gender equality. As such, while SDG 5 has nine targets, six of those are outcome targets and the remaining three are implementation targets. On the whole, gender equality as a goal is largely a concern of equity and distributive justice and has an ethical overtone than being linked to development. The “women-led-development” discourse is a statement towards the promotion of efficiency and sustainability, thereby, helping the cause of reconciling the irreconcilable trinity of equity, efficiency, and sustainability.

Women-led-development as an extension of women-in-development 

While it might seem that adopting a gender-neutral stance in the development discourse ensures impartiality, devoid of value judgments, the reality is that discussions of development inherently adopt a normative stance. Gender permeates every facet of development discourse, policy, and practice, challenging the simplistic notion that incorporating a gender perspective is merely about increasing women's representation in decision-making or isolating gender as an independent variable. Traditional views have often reduced gender differences to biological distinctions or focused narrowly on ending gender-based violence and domestic strife. Connell and Pearse, in their 2015 work, argue that a gender lens in development reveals the systemic structures and processes that institutionalise gender within power dynamics across various scales. These dynamics are shaped by the surrounding socio-economic and cultural contexts, making it crucial to interpret gender-sensitive development within its specific situational framework. Wendy Harcourt eloquently argues that gender experiences vary widely across different locales, bodies, and contexts, emphasising that gender and development must consider the interplay between local gender relations and global forces.

 Gender equality, often perceived as a matter of equity, addresses long-standing marginalisation and resource deprivation faced by women and transgender individuals in certain regions. This imbalance, rooted in biological differences, perpetuates unequal power dynamics, as evidenced by the lack of legal protections against domestic violence in 49 countries and unequal inheritance rights in 39 countries. However, beyond equity, incorporating a gender perspective in development highlights its efficiency aspect. Empowering women economically not only combats poverty but also fosters a better-educated future generation, shifting the role of women from welfare recipients to active participants in development. This recognition gained prominence in 1970 when the UN General Assembly integrated women into its development strategy, marking the birth of the Women in Development (WID) approach, which later evolved into the Gender in Development (GID) perspective in the 1980s, offering a more comprehensive view of women's roles in development.

Traditional views have often reduced gender differences to biological distinctions or focused narrowly on ending gender-based violence and domestic strife.

Sustainability emerges as a crucial concern from this discourse, introducing the concept of four capital factors: social, human, physical, and natural capital. A paper by the Observer Research Foundation argued that achieving the Sustainable Development Goals (SDGs) hinges on these factors, facilitating a conducive business environment. Importantly, the gender lens underscores that progress towards all SDGs is intrinsically linked to the success of SDG 5, emphasising gender equality as a foundational element for sustainable development.

Women as a growth force

In this vein, a 2015 McKinsey report on Saudi Arabia’s dwindling oil reserves—a critical economic cornerstone—poses the question of the country's future in a post-oil era. McKinsey suggests a shift towards a productivity-driven transformation by transitioning from a government-centric economic model to a market-based one, emphasising the need for increased female workforce participation, a move that challenges the traditional societal norms of Saudi Arabia. Essentially, the recommendation is to compensate for the diminishing “natural capital” by optimally leveraging “human capital” towards a diversified economy, thereby, ensuring sustainable growth and reducing natural resource dependency. This approach exemplifies the “demographic dividend” potential, where an economy benefits from a rise in skilled, healthily employed workers outpacing the overall population growth.

This model is not only applicable to Saudi Arabia, but could also be transformative for India and other South Asian regions. Despite India's rapid urbanisation, its development strategy has yet to capitalise on this demographic dividend by encouraging greater female labour force participation. However, India has taken rapid strides towards promoting female entrepreneurship through the promotion of the Micro Units Development and Refinance Agency Limited (MUDRA) financial inclusion framework that utilises the JAM (Jan-Dhan, Aadhaar, Mobile) trinity by integrating the Jan Dhan bank accounts, direct biometric identification under Aadhaar, and mobile phones to enable direct transfers of funds. Women's entrepreneurship is extremely important as in certain sectors where women play major roles (like those of care economies), a large part of these sectors is not formalised. One also needs to remember that entrepreneurship has a multiplier effect on employment and income in an economy. There is an immense opportunity for increasing the female workforce participation in India, which remains as low as 37 percent as compared to the male workforce participation of 76 percent, as per Periodic Labour Force Survey (PLFS) Annual Report 2022-2023. This becomes imperative when one notes that the percentages of male and female population between the ages of 15 and 49 years are more or less equal and stand at 54.5 percent as per estimates.

Women's entrepreneurship is extremely important as in certain sectors where women play major roles (like those of care economies), a large part of these sectors is not formalised.

If the neoclassical law of diminishing marginal product of factor input is to be believed, it is axiomatic to argue that the marginal labour productivity of women at a lower level of labour time use is higher than the marginal labour productivity of male folks. However, the existing wage differentials either do not indicate that, or there is a critical disequilibrium in the labour market due to factors unaccounted for. While the contention of differential marginal product remains a working hypothesis at a macro-scale, there is no doubt that there is immense opportunity for economic growth with further women inclusion in the workforce not only in India but large parts of the Global South nations where female workforce participation is low. Here arises the opportunity for “hitting the sweet spot of demographic dividend” by including women in the workforce and entrepreneurship and transforming their roles as the drivers of economic growth and development.

The essence of this essay is that fostering women's participation in the workforce is a cornerstone towards achieving not only a more equitable world but also promoting economic efficiency and sustainable development. Efficiency parameters are addressed through a more productive labour force while fairness and equity are promoted by distributing incomes more widely, thereby significantly contributing to sustainability.


Nilanjan Ghosh is a Director at the Observer Research Foundation

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Author

Nilanjan Ghosh

Nilanjan Ghosh

Dr Nilanjan Ghosh is a Director at the Observer Research Foundation (ORF) in India, where he leads the Centre for New Economic Diplomacy (CNED) and ...

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