7.4 Women and Economic Development

In many lower-income countries, much of women's work is unpaid (caring for children and elders, cooking, fetching water) or in the informal sector, like small-scale farming and street vending. That work is essential but doesn't show up in GDP or official job statistics (7.3).

As countries develop, girls usually stay in school longer, fertility falls (2.8) and more women take paid jobs outside the home. Women's roles in the workforce change over time. In the early stages of industrialization, many work in export factories. The garment industry in Bangladesh employs about 4 million workers, most of them women. Later, more women move into services, teaching, health care, business and government. In high-income countries, women now earn a majority of college degrees in many fields.

• Pay: worldwide, women earn on average roughly 20% less than men, according to International Labour Organization estimates. Part of the gap comes from women being concentrated in lower-paid jobs and part from unequal pay for similar work.
• Legal barriers: the World Bank's 2024 Women, Business and the Law report found that, on average, women have only about two-thirds of the legal rights men have in areas like work, pay, property and running a business.
• Social barriers: expectations about caregiving, limits on women's mobility, and violence or harassment keep many women out of paid work or in low-wage jobs.
• Leadership: women hold a much smaller share of top business and government positions than men in most countries.
• Safety: low-wage factory work can be dangerous. In 2013 the Rana Plaza garment factory building collapsed near Dhaka, killing more than 1,100 workers, most of them women.

Legal change can move numbers quickly. After Saudi Arabia allowed women to drive in 2018 and loosened other rules on women's work and travel, the share of Saudi women in the labor force roughly doubled within a few years. Policies such as paid parental leave, affordable childcare and equal-pay laws, common in Nordic countries, also raise women's participation in paid work.

Microloans are small loans to people who can't get credit from regular banks, often because they have no collateral. Microfinance is the wider set of services (loans, savings, insurance) for low-income people. Muhammad Yunus started the Grameen Bank project in Bangladesh in 1976, lending mostly to women in small groups that shared responsibility for repayment. He and the bank won the Nobel Peace Prize in 2006.

Supporters say microloans help women start businesses, like raising goats or running a small shop, and give them more say in household decisions. But randomized studies in six countries, published together in 2015, found modest benefits: borrowers often expanded businesses, but on average incomes and poverty didn't change dramatically. Critics also point to high interest rates and debt traps. Microloans help some women, but they don't replace education, health care and legal equality.