How to Advance Women’s Economic Security Using Insights from Behavioral Science

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The United States Strategy on Global Women’s Economic Security (2023) envisions a world in which women and girls in all their diversity are equally able to contribute to and benefit from economic growth and development. U.S. Department of State (2023). United States Strategy on Global Women’s Economic Security. https://www.state.gov/wp-content/uploads/2023/01/U.S.-Strategy-on-Global-Womens-Economic-Security.pdfThis includes equal access to quality education, better jobs and decent work. Globally, however, women and girls face disproportionate barriers to economic entry and full, equitable participation and advancement in the workforce. These barriers include gender-based violence, harassment, income and resource disparities, limited access to education, limited access to quality healthcare (especially sexual and reproductive healthcare), excessive caregiving responsibilities, limited job opportunities, and harmful gender norms.  U.S. Department of State (2023). United States Strategy on Global Women’s Economic Security. International Labor Organization (2023). World Employment and Social Outlook.

For example, the International Labor Organization estimates women’s labor force participation rate globally at 47.4 percent and men’s participation rate at 72.3 percent with a gender gap of 24.9 percentage points. International Labor Organization (2023). World Employment and Social Outlook. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_865332.pdf Where women are employed, they tend to face poor working conditions, including informal work characterized by lack of legal and social protections, and unequal work hours and pay. World Economic Forum (2023). Global Gender Gap Report 2023. https://www.weforum.org/reports/global-gender-gap-report-2023/ https://www.ilo.org/infostories/en-GB/Stories/Employment/barriers-women#unemployed-vulnerable/vulnerable-employment

Evidence-Based Practices Based in Behavioral Science

To increase women’s economic security, it is critical to consider the role of human behavior in understanding and addressing barriers to women’s labor force participation and control over financial resources. Behavioral science provides a research-based approach to understand the psychological, social, and structural reasons people behave the way they do in real world environments.

Broadly, there are four main evidence-based practices from behavioral sciences that can be used to improve women’s economic security:

1. Correct misperceived social norms

Social norms are formal or informal rules or standards that guide people's behavior within a group. People often form beliefs about social norms by observing the behavior of their peers. Norms have the power to shape behavior, but can be inaccurately perceived. For example, a majority of young, married men in Saudi Arabia privately supported women working outside the home, but underestimated the extent to which their peers (other young, married men) support women working outside the home. Bursztyn, L., González, A. L., & Yanagizawa-Drott, D. (2020). Misperceived social norms: Women working outside the home in Saudi Arabia. American Economic Review, 110, 2997-3029

When this misperception of the social norm was corrected among men, men were more willing to help their wives search for jobs and women were more likely to have applied and interviewed for a job. And when this misperception was corrected among women, they were more likely to switch from an at-home job to a higher-paying job outside the home.

2. Increase women’s control over financial resources, including cash transfers

A common challenge in empowering women through cash transfer programs is that social norms, including gender norms, often encourage women to cede control over their new cash to their male partners or to support the businesses of other members of their household or family. A recent evidence review by the Abdul Latif Jameel Poverty Action Lab (J-PAL) indicates that providing financial resources, including cash transfers, to women is ineffective if women do not retain control over the resource use. Abdul Latif Jameel Poverty Action Lab (2021, February). Designing financial services and social protection programs to enhance women’s economic empowerment. https://www.povertyactionlab.org/policy-insight/designing-financial-services-and-social-protection-programs-enhance-womens-economic

The same evidence review indicates that there are ways to design the distribution of these resources to give women more control and allow them to safeguard resources against the demands of others. For example, direct deposits into separate bank accounts for women coupled with training on the benefits of the accounts increased women’s labor supply both to India’s federal workfare program and to private sector employment. Moreover, it shifted gender norms towards greater women’s empowerment. Field, E., Pande, R., Rigol, N., Schaner, S., & Troyer Moore, C. (2021). On her own account: How strengthening women’s financial control impacts labor supply and gender norms. American Economic Review, 111, 2342-2375. Similarly, mobile payments (vs. cash) also offers women greater privacy and control over resources, subsequently increasing women’s participation in economic activitiesAker, J. C., Rachid Boumnijel, Amanda McClelland, and Niall Tierney. (2016). Payment mechanisms and antipoverty programs: Evidence from a mobile money cash transfer experiment in Niger. Economic Development and Cultural Change, 65,1–37. and business profits. Riley, E. (2020) Resisting sharing pressure in the household using mobile money: Experimental evidence on microenterprise investment in Uganda. Oxford University Research Archive Working Paper. Available at https://ora.ox.ac.uk/objects/uuid:b7ed6a67-88a9-4714-a419-b4c43decc7e8 (Accessed: 6 July 2023).

3. Avoid backlash by pairing programs that benefit women with programs that benefit the rest of the community

Traditional gender norms not only shape how money is spent and controlled, but also have the risky potential to spark backlash if these norms are violated. For example, cash transfers to women in Northern Nigeria increased sexual intimate partner violence (IPV) by 6 percentage points because cash transfers challenge traditional masculinity norms and threaten male authority. Cullen, C., Gonzalez Martinez, P., Papineni, S. (2020). Empowering women without backlash? Experimental evidence on the impacts of a cash transfer and community livelihoods program on intimate partner violence in Northern Nigeria. Working Paper. Available at https://custom.cvent.com/4E741122FD8B4A1B97E483EC8BB51CC4/files/csaecullengonzalezpapineniipvpaper01312020.pdf

Although community livelihood programs alone had no significant effect on IPV, when cash transfers were paired with a community livelihoods program that benefited whole communities, sexual IPV actually decreased by 13 percentage points. These findings suggest that IPV is most effectively reduced when women are given cash transfers to boost their bargaining power in the home, while paired community livelihoods programs also benefit their partners and buffer against threats to masculinity norms.

4. Use commitment devices to encourage sticking to financial goals

Commitment devices are techniques that make fulfilling an intention easier by either tying failure to specific consequences or by imposing external, voluntary restrictions on behavior. For example, you might download an app that limits the time you can spend on distracting websites or on “screen time” overall (a voluntary, external restriction on behavior). Commitment techniques can also be helpful in providing external support for self-control in maintaining savings as well as maintaining women’s control over a financial asset within their households. One study in the Philippines, for example, found that women who were restricted from withdrawing money from a savings account until they met their own self-defined, predetermined date or savings goal increased their household decision making power. Ashraf, N., Karlan, D., & Yin, W. (2010). Female empowerment: Impact of a commitment savings product in the Philippines. World Development, 38, 333-344.

Potential future avenues

In addition to the interventions described above, there are two more potential avenues to increase women’s labor force participation across sectors described in ideas42’s guide, Better Choices, Decent Work: Using Behavioral Design to Improve Labor Market Programs in Low and Middle-Income CountriesAibana, K., Barofsky, J., Datta, S., Jean-Francois, J., & Martin, J. (2020). Better choices, decent work: Using behavioral design to improve labor market programs in low and middle-income countries. Available at https://www.ideas42.org/wp-content/uploads/2020/02/I42-1145_InternationalLabor_Paper_final.pdf

  • Encourage role models to share experiences in male-dominated industries. Male-dominated industries often pay more than female-dominated industries, including for women who work in these industries. One predictor of women’s engagement in male-dominated industries is whether or not they had a male role model in the industry in their youth. Campos, F., Goldstein, M., McGorman, L., Boudet, A. M. M., & Pimhidzai, O. (2018). Breaking the metal ceiling: Female entrepreneurs who succeed in male-dominated sectors. In S. Anderson, L. Beaman, & J.P. Platteau (Eds.), Towards Gender Equity in Development (pp.167-191). Oxford University Press. Similarly, exposure to counterstereotypical role models (i.e., women in male-dominated industries and men in female-dominated industries) can increase aspirations toward and engagement with counter stereotypical career paths. Olsson, M., & Martiny, S. E. (2018). Does exposure to counterstereotypical role models influence girls’ and women’s gender stereotypes and career choices? A review of social psychological research. Frontiers in Psychology, 9, doi: 10.3389/fpsyg.2018.02264. However, more research needs to be done to establish whether role model relationships cause women to pursue male-dominated career paths and the reasons some role model-based interventions are more successful than others. Furthermore, occupations have been devalued, or relative pay decreased, as greater proportions of women have entered them in the United StatesLevanon, A., England, P., & Allison, P. (2009). Occupational feminization and pay: Assessing causal dynamics using 1950–2000 US Census data. Social Forces, 88, 865-891. suggesting that shifting career-choice alone at scale is insufficient to achieve economic equality.
  • Correct misperceptions about the nature and "appropriateness" of a work opportunity. Women may be reluctant to pursue particular occupations because their families disapprove and hold biased beliefs about “appropriate” work settings for women. For example, parents in rural Pakistan believed that factory work was degrading or would put their daughters at risk of sexual violence. A randomized controlled trial established that providing information about the “female-friendly” working conditions and environment of garment factories improved parents’ attitudes towards women working in these factories. Makino, M. (in press) Labor market information and parental attitudes toward the labor force participation of their daughters: Experimental evidence from rural Pakistan. Economic Development and Cultural Change, doi: 10.1086/722160 However, this intervention did not measure or demonstrate that women’s employment in factories increased as a result of providing additional information. Thus, correcting misperceptions shows promise, but additional research is needed to identify whether this type of intervention actually increases women’s labor force participation.

Conclusions

Behavioral science can improve women’s economic empowerment by addressing the psychological, social, and structural (including physical) barriers that limit their workforce participation and control over financial resources within their households. The most promising approaches focus on shifting or bypassing the (perceived) social norms that dictate what is or is not appropriate behavior and social roles for women and men. Behavioral science is not a substitute for legal rights and other policies that promote economic gender equality, but it can improve the implementation of these policies by addressing the underlying drivers of inequality.

Interested in using behavioral science to advance women’s economic empowerment or promote economic growth? You can reach out to USAID’s Office of the Chief Economist (oce@usaid.gov); contact Laura Van Berkel (lvanberkel@usaid.gov) or Tania Alfonso (talfonso@usaid.gov) to join USAID’s Behavioral and Social Sciences Working Group; and contact David Kauper (dkauper@usaid.gov), the COR for EMD’s Technical Assistance Project for Economic Growth mechanism, which can conduct customized experiments and behavioral studies.


Author: Laura Van Berkel

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