Impact of Financial Crisis on Women and...
Transcript of Impact of Financial Crisis on Women and...
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Impact of Financial Crisis on Women and Families
PREM Gender and Development, World BankFebruary 2009
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3 Main Messages
Effects on women and children, if ignored, will both increase current poverty and imperil future development.
Effective policy responses should build on women’s roles as economic agents.
The financial crisis will have gender-specific impacts.
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ImpactsImpacts
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The crisis has first and second round impact on women and families
Drop in aggregate
demand/ exports
Tightenedcredit
markets
Drop inremittances
Food priceshocks
Impact 1:Loss of
employment
Impact 2:Fall in MFI
lending resources
Drop inhousehold income.
Increased riskof poverty
Impact 3:Vulnerable hhd coping strategies
First round impactsFirst round impacts Second round impactsSecond round impacts
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Impact 1: Women workers in export industries lose jobs
Export Manufacturing
More than 50%
ElectronicsPhilippines
85%GarmentsBangladesh
78%GarmentsMalaysia
% of workforce
female
IndustryCountry
More than 50%
ElectronicsPhilippines
85%GarmentsBangladesh
78%GarmentsMalaysia
% of workforce
female
IndustryCountry
High Value Export Agriculture% of
workforce female
IndustryCountry
80%FruitsThailand
70%Cut flowerEcuador
85%Cut flowerUganda
% of workforce
female
IndustryCountry
80%FruitsThailand
70%Cut flowerEcuador
85%Cut flowerUganda
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Impact 2: Tightening credit markets can squeeze MFI loans to women producers
MFIs typically lend to women:
Over 3,330 MFIs reached 133 million clients in 2006
93 million of the clients were among the poorest when they took their first loan
85% of these poorest clients were women
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Drop in remittances lowers income available to HHS
-14% -12% -10% -8% -6% -4% -2% 0%
Afghanistan
Uzbekistan
Tajikistan
Kyrgyz Republic
Haiti
Cape Verde
Source: World Bank (2009)
Falling Remittances to Developing Countries (as % of GDP) Falling Remittances to Developing Countries (as % of GDP) 20082008--20092009
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HH Coping StrategyHHs send women to work
% C hange in Labor Force Part icipat ion ( 19 9 3 - 9 5) , Lat in A merican C risis
-3-2-10123
Argentina Brazil Mexico
Female
Male
% Change in Labor Force Participation (1997-99), East Asian Crisis
-3-2-10123
Indonesia Korea,Rep. Philippines
Source: WDI, 2008
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HH Coping Strategy HHs pull girls (and boys) out of school
Source: Gubert and Robilliard 2007; Jensen (2000); Skoufias and Parker 2006; Schady (2004).
Low income countries:Madagascar (fall in ag income) girls more likely to drop out of schools.Cote d’Ivoire (drought) enrollment decreased 11 pptsfor girls and 14 ppts for boys.
Middle income countries:Mexico (peso crisis) girls attendance fell by 8%, no impact on boys.Peru (1980s crisis) no impact on school enrollment for either girls or boys, schooling increased.
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HH Coping Strategy HHs cut back on health investments,
affecting girls disproportionately
Source: Baird, Freedman and Schady, 1998
Data from 59 developing countries, different years ranging from 1985 to 2004
Girls’ (IMR) exceeds boys’ during economic downturns
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Policy implicationsPolicy implications
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Priority Investment:Put income in women’s hands in poor hh
because….
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…because loss of women’s earnings can have long-term welfare impacts
Loss of employmentfor women in export oriented industries
Microfinance likely to be affected
(MFI borrowers are typically women)
Drop in current poverty reduction
and economic growth
Greater impact onwell-being of
children
Drop in future povertyreduction and
economic growth
Fall in women’s control over household decisions
Drop infemale
earnings
Fall in remittances
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...because income transfers to women have larger effects on children’s nutritional status than similar transfers to men.
Source: Thomas (1990) for Brazil, Khandker (1998) for Bangladesh, and Duflo (2003) for South Africa.
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0
20
40
60
80
100
Brazil Bangladesh South Africa
% c
hang
e in
chi
ld's
an
thro
pom
etric
mea
sure
Woman's income Man's income
Children’s weight for height
Children’s height for age
Children’s height for age
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… because the effect of female borrowing on hh welfare is larger than the effect of male borrowing (e.g. Bangladesh)
Source: Khander (1998)
Impact of a 10% increase in borrowing from Grameen Bank
0.43
0.0150.18
-0.06
11.63
-4.92-0.2
0
0.2
0.4
0.6
0.8
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Per Capita HH expend. Women's Labor Supply Girls' height for age
Perc
enta
ge c
hang
e
Borrowing by Women Borrowing by Men
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..especially in more than half in a sample of countries, where women are most
vulnerable to effects of the crisis.
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DeceleratingDeceleratinggrowthgrowth HighHigh ChildChild
MortalityMortality
Low Low gendergenderparityparity in in schoolingschooling
Women & girls in 50% of countries in the sample (of 90) face moderate to high exposure to negative impact of crisis
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BankBank’’s Responses Response
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Mapping impacts to policy
Capitalization of microcreditCapitalization of microcreditWomen producersWomen producers
Cash transfer programsCash transfer programsOther social safety net programsOther social safety net programs
Women and girlsWomen and girls’’human developmenthuman development
Employment generation programsEmployment generation programsWomenWomen’’s employments employment
Policy/programsImpacts
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Bank’s Response
World Bank Group’s Gender Action Plan will allocate its financial resources in 2009 to assist in ensuring that WBG responses to the crisis maximize women’s income, especially in those countries where women and girls are most vulnerable to the effects of the crisis.