Women’s participation in labor force can yield significant increase in economic growth

Posted on May 6, 2017  /  2 Comments

For a number of reasons, I’ve been thinking about Sri Lanka’s unusually low female participation in the labor force. As is common among policy people, I was emphasizing the benefits for households from having multiple incomes and to various sectors from having less constraints on labor inputs. Here, Janet Yellen talks about the macro-economic benefits directly:

The sweeping movement of women from the home to the workplace during the mid-20th century, she said, was a “major factor in America’s prosperity.” But that progress has stalled in recent decades, leaving women less likely than men to hold paying jobs. Bringing more women into the work force with policies like expanding the availability of paid leave, affordable childcare and flexible work schedules, she said, could help to lift the American economy from a long stretch of slow growth.

“Evidence suggests that many women remain unable to achieve their goals,” Ms. Yellen said in a speech at Brown University. “If these obstacles persist, we will squander the potential of many of our citizens and incur a substantial loss to the productive capacity of our economy at a time when the aging of the population and weak productivity growth are already weighing on economic growth.”

Ms. Yellen cited one recent estimate that raising women’s participation to the same level as men’s could increase the nation’s annual economic output by 5 percent.

The full speech is available here.


  1. Amila Munasinghe

    In my point of view rather than participating women in employments to develop the economy of a country it would be better they manage the home economy whilst letting men to work for the macro economy. This does not mean non of the women should be avoided from working. But there were some piece full times in the past where father was dominated and earned the living and mother took care the rest of family chores. But it is utmost important to develop the house hold income by participating the women through livelihood development programs. I just felt this thought because most of the families had ruined their own family lives by engaging this rat race without compromising to each other and falling victim to their children who raised them selves alone. Personally I did’t want my mother going to work since I felt really bad when I was alone in my childhood.

  2. In Sri Lanka, we need a better understating of causes of low female participation rate in the labor force. Not enough attention has been paid to finding the reasons, although the large gap has been known for years. Many reasons from child and elderly care, transportation, sexual harassment, lower pay, bias against have been put forward, but the level of each of them and potential solutions need to be addressed. Understanding causes will give a good starting point to move forward. There is no argument on the importance and the value of women’s contribution to household and family. But story does not end there. Just to take one example, properly managed community child care (elderly care) programs can be cheaper, can have wider social benefits, and release mothers to become participants in the labor force raising standards of living.