Impact of Financial Crisis on
Women and Families


PREM Gender and Development, World Bank
February 2009


               ...
3 Main Messages

The financial crisis will have gender-specific impacts.


Effects on women and children,
if ignored, will...
Impacts




          3
The crisis has first and second round impact
           on women and families
                     Impact 1:
   Drop in
  ...
Impact 1: Women workers in export industries lose jobs

      Export Manufacturing
  Country       Industry       % of
   ...
Impact 2: Tightening credit markets can squeeze MFI loans
                  to women producers


   MFIs typically lend to...
Drop in remittances lowers income available to HHS
        Falling Remittances to Developing Countries (as % of GDP)
     ...
HH Coping Strategy
                            HHs send women to work

                                % C hang e in Lab o...
HH Coping Strategy
             HHs pull girls (and boys) out of school


Low income countries:
  Madagascar (fall in ag i...
HH Coping Strategy
              HHs cut back on health investments,
               affecting girls disproportionately

  ...
Policy implications




                      11
Priority Investment:
Put income in women’s hands in poor hh
              because….




                                  ...
…because loss of women’s earnings can have
          long-term welfare impacts


Loss of employment                       ...
...because income transfers to women have larger effects on
  children’s nutritional status than similar transfers to men....
… because the effect of female borrowing on hh welfare is
   larger than the effect of male borrowing (e.g. Bangladesh)


...
..especially in more than half in a sample
   of countries, where women are most
    vulnerable to effects of the crisis.
...
Women & girls in 50% of countries in the sample (of 90)
   face moderate to high exposure to negative impact of crisis


D...
Bank’s Response




                  18
Mapping impacts to policy

Impacts                 Policy/programs

Women’s employment      Employment generation programs...
Bank’s Response

World Bank Group’s Gender Action Plan will
allocate its financial resources in 2009 to
assist in ensuring...
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Impact of Financial Crisis on Women and Families

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Impact of Financial Crisis on Women and Families

  1. 1. Impact of Financial Crisis on Women and Families PREM Gender and Development, World Bank February 2009 1
  2. 2. 3 Main Messages The financial crisis will have gender-specific impacts. 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. 2
  3. 3. Impacts 3
  4. 4. The crisis has first and second round impact on women and families Impact 1: Drop in Loss of aggregate demand/ exports employment Tightened Drop in Impact 3: credit Impact 2: household income. markets Vulnerable Fall in MFI Increased risk hhd coping of poverty lending resources strategies Drop in remittances Food price shocks Second round impacts First round impacts 4
  5. 5. Impact 1: Women workers in export industries lose jobs Export Manufacturing Country Industry % of workforce female Malaysia Garments 78% Bangladesh Garments 85% Philippines Electronics More than 50% High Value Export Agriculture Country Industry % of workforce female Uganda Cut flower 85% Ecuador Cut flower 70% Thailand Fruits 80% 5
  6. 6. 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 6
  7. 7. Drop in remittances lowers income available to HHS Falling Remittances to Developing Countries (as % of GDP) 2008-2009 Cape Verde Haiti Kyrgyz Republic Tajikistan Uzbekistan Afghanistan -14% -12% -10% -8% -6% -4% -2% 0% Source: World Bank (2009) 7
  8. 8. HH Coping Strategy HHs send women to work % C hang e in Lab o r F o r ce Par t icip at io n ( 19 9 3 - 9 5) , Lat in A mer ican C r isis 3 2 1 Female 0 -1 Argentina Brazil Mexico Male -2 -3 % Change in Labor Force Participation (1997-99), East Asian Crisis 3 2 1 0 -1 -2 -3 Indonesia Korea,Rep. Philippines 8 Source: WDI, 2008
  9. 9. HH Coping Strategy HHs pull girls (and boys) out of school Low income countries: Madagascar (fall in ag income) girls more likely to drop out of schools. Cote d’Ivoire (drought) enrollment decreased 11 ppts for 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. 9 Source: Gubert and Robilliard 2007; Jensen (2000); Skoufias and Parker 2006; Schady (2004).
  10. 10. HH Coping Strategy HHs cut back on health investments, affecting girls disproportionately Girls’ (IMR) exceeds boys’ during economic downturns Data from 59 developing countries, different years ranging from 1985 to 2004 10 Source: Baird, Freedman and Schady, 1998
  11. 11. Policy implications 11
  12. 12. Priority Investment: Put income in women’s hands in poor hh because…. 12
  13. 13. …because loss of women’s earnings can have long-term welfare impacts Loss of employment Drop in current for women in export poverty reduction oriented industries and economic growth Drop in Drop in future poverty female reduction and earnings economic growth Microfinance likely to be affected Fall in women’s control over (MFI borrowers household decisions are typically women) Greater impact on well-being of children Fall in remittances 13
  14. 14. ...because income transfers to women have larger effects on children’s nutritional status than similar transfers to men. Woman's income Man's income Children’s height for age 100 anthropometric measure % change in child's 80 Children’s weight Children’s height 60 for height for age 40 20 0 Brazil Bangladesh South Africa -20 Source: Thomas (1990) for Brazil, Khandker (1998) for Bangladesh, and Duflo (2003) for South Africa. 14
  15. 15. … because the effect of female borrowing on hh welfare is larger than the effect of male borrowing (e.g. Bangladesh) Impact of a 10% increase in borrowing from Grameen Bank 11.63 1 0.8 Percentage change 0.6 0.43 0.4 0.18 0.2 0.015 0 -0.06 -0.2 -4.92 Per Capita HH expend. Women's Labor Supply Girls' height for age Borrowing by Women Borrowing by Men 15 Source: Khander (1998)
  16. 16. ..especially in more than half in a sample of countries, where women are most vulnerable to effects of the crisis. 16
  17. 17. Women & girls in 50% of countries in the sample (of 90) face moderate to high exposure to negative impact of crisis Decelerating High Child growth Mortality Low gender parity in schooling 17
  18. 18. Bank’s Response 18
  19. 19. Mapping impacts to policy Impacts Policy/programs Women’s employment Employment generation programs Women and girls’ Cash transfer programs human development Other social safety net programs Capitalization of microcredit Women producers 19
  20. 20. 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. 20

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