From Ngozi Okonjo-Iweala,Managing Director,World Bank

Dear Colleagues,Over the past decades I have had theopportunity to look at developmentfrom a variety of perspectives, includ-ing as a development economist, asFinance Minister and as ManagingDirector. One essential observationpervades my experience; develop-ment is held up without the eco-nomic empowerment of women.Multilateral financial institutions andgovernments of developing coun-tries have historically been slow toembracewomen’s economic empow-erment as a core strategy to reducepoverty. But lately, a growing num-ber of governments, internationalorganizations, NGOs and privatesector partners have begun puttingemphasis on the potential economicgains of increasing gender equality.They maintain that gains in recentdecades in women’s education andhealth levels can be converted tofaster poverty reduction and devel-opment. This new interest to investin women’s access to productiveemployment and agriculture, entre-preneurship and financial serviceshas helped forge newand sometimessurprising partnerships that straddletraditional divides, such as betweenthe private and public sectors.The World Bank’s Adolescent GirlInitiative, which will be launched onOctober 10, 2008, is one example ofsuch an innovative approach andpartnership. The initiative began asa US$3 million public-private sectorpartnership between the Govern-ment of Liberia, the World BankGroup and the Nike Foundation. Ina pilot-phase, it will expand to atleast six other low-income or post-conflict countries with new donors,governments, foundations and corpo-rations participating. If successful,we hope to see the

By Morten Larsen and Helene Carlsson Rex

In Lao PDR, many poor, primarilywomen-headed rural households

find it impossible to connect to theelectricity grid. A major obstacle forthese households is the connectionfee of about US$100. In some areas,up to 40 percent of households havebeen unable to mobilize money forthe connection cost and are thus leftwithout access to electricity eventhough the grid is passing rightthrough their village.

This lack of access to electricity is alarge stumbling block for povertyreduction efforts. Evidence suggeststhat electricity not only helps extendhours for both productive and leisureactivities in Lao PDR, but it also trans-lates into better educational outcomes,improved social and communityservices, and better security. Surveysof newly-electrified rural householdsalso show that grid electricity has

been used for income-generatingactivities such as water pumping forvegetable gardens, household indus-try like mat and basket weaving, andthe use of refrigerators for small-scale entrepreneurship servingtourists, such as ice cream vending.

Moreover, electricity has been shownto help close gender gaps by reducingtime spent on cumbersome chores,such as fetching water, and by allow-ing for greater flexibility in organizinghousehold activities. The literacy gapbetween men and women is smaller

Shining a Light on Women’sProductivity in Lao PDR

The villagers of Phon Phang, a rice-growing community in the rural Savannahkhet Province of Laos, willhave opportunities for higher incomes and a better quality of life once connected to the electricity grid.

(cont. on p. 2)

(cont. on p. 2)

Inside:Zoellick Makes MDG3 Commitments 3Tracking Gender Impact at IFC 4In Brief 4Women in Agriculture 5Innovative Approaches in LAC 6Low-Skilled Macedonian Women 7Retirement Gap in Vietnam 8

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ender equalityas smart economicsA World Bank Group Action Plan

September 2008

Mailing Label

initiative scaled-up and replicatedin more countries.Based on the belief that adolescentgirls and young women are catalystsof change and a smart way to breakintergenerational patterns of poverty,the initiative promotes the economicempowerment of young women bysmoothing their path to productiveemployment. While girls and boyshave achieved parity in education inmost developing countries, girls’ ac-cess to the labor market consistentlylags behind boys’, often considerablyso. Together with our partners wehave developed anewmodel of skills-training matched to market needs

incentive structures in place to max-imize access to wage jobs or success-ful self-employment. We will bringthismodel to theotherpilot countriesand, if successful, to many more.Depending on the economic envi-ronment, we plan to add interven-tions such as business developmentskills training, job placement incen-tives and assistance, access to microfinance, and mentoring and ap-prenticeship programs. Rigorousimpact evaluation will tell us whatworks and what does not.The World Bank Group will host thehigh-level launch of the AdolescentGirls Initiative on October 10, 2008,as an Annual Meetings side-eventin Washington DC. Bob Zoellick isscheduled to open the event, andwill be joined by leaders of donorand Bank member countries, corpo-rations, foundations and experts,along with adolescent girls from sitecountries. We will hear their storiesand, despite years of systematic dis-advantage and conflict, their aspi-rations to participate fully in thedevelopment of their communitiesand countries, to the benefit of usall. I hope to see you there.

Ngozi Okonjo-Iweala

Gender Equality as Smart Economics • September 20082

From theManaging Director,cont. from p. 1

You May RequestGender Equality as Smart Economics: A World Bank Group Action Plan materials,including an overview brochure and the operational plan are available in print andon the Web in English, Arabic, French, Portuguese, Russian, and Spanish. Thesematerials are also available in English on a CD that contains a video describingsuccessful programs that promote women’s economic empowerment in Africa,Asia, Latin America and the Middle East.For more information about Gender Equality as Smart Economics, contact:Alexandra Brunais Malcolm EhrenpreisTel: (202) 458-5039 Tel: (202) 458-5219Fax:(202) 522-3237 Fax:(202) 522-3237abrunais@worldbank.org mehrenpreis@worldbank.org

Gender Equality as Smart EconomicsPoverty Reduction and Economic Management NetworkThe World Bank1818 H Street, NW, Washington, DC 20433 USAwww.worldbank.org/gender

This newsletter, Gender Equality as Smart Economics is published by the WorldBank Group’s Gender and Development Group twice a year, in print and on theweb at www.worldbank.org/gender. EDITOR: Alexandra Brunais. Please sendyour comments, questions or request for materials to: abrunais@worldbank.org.

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in electrified villages in Lao PDR.Similarly, girls’ secondary and voca-tional school attendance are higherin electrified villages.

Recognizing these benefits, the Gov-ernment of Lao PDR has placed elec-trification at the center of its povertyreduction efforts. Through a RuralElectrification Project, co-financed bythe World Bank’s Global Environ-mental Facility, NORAD and AusAid,the Government aims to electrify 90percent of the country’s householdsby 2020, up from 55 percent in 2007,which in turn is up from 15 percent in1995. While the rate of electrificationhas been high, connection rates arestarting to fall short of targets as thenetwork expands to rural and margin-alized areas of the country where con-nection cost may be tougher to bear.

In response to this problem, the WorldBank’s East Asia and Pacific RegionGender Program designed a HouseWiring Assistance Program, whichhelps poor households connect to thegrid. With funding from the GenderAction Plan (GAP), Gender Equality asSmart Economics, a framework andimplementation materials for the proj-ect were developed, and plans arenow afoot to offer a concessionary

credit of US$80 to households thathave been unable to finance the initialconnection cost. The pilot is givingparticular attention to women-headedhouseholds. Once connected, house-holds will spend approximately US$1per month for electricity, comparedto the approximately US$3 per monththey are now estimated to pay for en-ergy in the form of car batteries, dieselfuel, candles and so on. These energyexpenditure savings are expected toallow households to repay the con-nection cost fully in three years.

The pilot project, called Power to thePoor, begins implementation in Sep-tember 2008 and is financed by theWorld Bank’s International Develop-ment Association and AusAID, andimplemented by the national utilitycompany, Electricité du Laos. Theprogram is expected to increase over-all connection rates by as much as 10to 20 percent. If successful, the govern-ment says it will replicate it further.

Morten Larsen is a Mining & EnergySpecialist in the World Bank East AsiaPacific region and Helene Carlsson Rexis a Senior Gender Specialist in thePoverty Reduction and EconomicManagement (PREM) Gender unit.

Connecting to Grid, cont. from p. 1

forwomenaged16-24 in Liberia,with

Gender Equality as Smart Economics • September 2008 3

The World Bank took an importantstep this spring in its commitment

to gender equality. President Zoellickpromised Bank resources for adoles-cent girls so they can find quality workin the marketplace.

The Bank intends to invest more inthis group that has made impressivegains in school enrollment and com-pletion in the last five to ten years, buthas hadmore difficulty than boys tran-sitioning from school to work. Thusthe Bank will launch the AdolescentGirls Initiative (AGI) on October 10th.

Building on the considerable progressmade on gender equality in healthand education over the past decades,and supporting the Bank’s goal toachieve the same results in the produc-tive sectors, Mr. Zoellick announcednew measures to boost women’s em-powerment:

By 2010, at least half of the WorldBank’s rural and agricultural projectswill address a gender inequity or prob-lem, such as by helping women obtaintitle to their land, often a prerequisiteto obtaining financing. The Bank plansto nearly double agricultural lendingto Africa from US$450 million toUS$800 million over the next year.

TheWorld Bank Group’s private sectorarm, the International Finance Corpora-tion,will channel at least US$100milliontoward women entrepreneurs by 2012.

The Bank will create the PrivateSector Leaders’ Forum to supportGender Equality as Smart Economics,and convene their first meeting on themargins of the 2008 Annual Meetings.

The International Development Asso-ciation (IDA) will increase investmentsfor Gender Equality. A review of IDA-funded activities will be performedwith regard to gender mainstreamingat the end of the IDA15 cycle, with theobjective of increasing IDA investmentson gender equality in operations fi-nanced through IDA16.

These commitments were made on thesidelines of the Bank’s 2008 SpringMeetings at the seminar on ways tobridge gender gaps, which brought

together ministers from Germany,Egypt, Sweden, Denmark and Liberiato take stock of the status of womenin developing countries.

Denmark brought its MDG3 GlobalCall to Action campaign to the event toraise the profile of the third MillenniumDevelopment Goal—gender equalityand empowerment ofwomen by 2015—

as part of an effort to build supportfor gender equality before a September25 United Nations High Level MDGsummit. Mr. Zoellick, along with theGerman Minister for Economic Coop-eration and Development, HeidemarieWieczorek-Zeul, accepted the cam-paign’s symbolic MDG3 torch andDenmark’s challenge to “do somethingextra” to promote women’s economicempowerment.

“I think the acceptance of the MDG3torch sends a crucial signal of thepersonal commitment by you, Mr.Zoellick, and the indispensable rolethat the World Bank has for the em-powerment of women,” said DanishMinister for Development Ulla Peder-sen Tørnæs. Minister Wieczorek-Zeulalso underlined the importance ofstrengthening the global cooperationto support women’s empowerment.“I am really convinced that, in ourdevelopment cooperation, we canchange behavior, thinking, feeling,but also results in the interests ofwomen and the whole society.”

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Danish Development Minister Ulla Pedersen Tørnæs passes the MDG3 Torch to President Robert. BZoellick and GermanMinister for Economic Cooperation and Development HeidemarieWieczorek-Zeul.

The Danish MDG3 Torch goes to individualswho stand out in their support to women’seconomic development.

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Bank Makes New Commitments toWomen’s, Girls’ Economic Empowerment

Gender Equality as Smart Economics • September 20084

By Liane Asta Lohde andCarmen Niethammer

In October 2005, the InternationalFinance Corporation (IFC), the privatesector arm of the World Bank Group,launched its corporate DevelopmentOutcome Tracking System (DOTS) inresponse to increased demand fromstakeholders, including IFC Manage-ment and the Board, to better demon-strate the developmental impact ofits operations. Through DOTS, IFCis able to more efficiently assess itsdevelopmental impact.

The process of developing a set ofappropriate gender impact indicatorsstarted in November 2006 when IFCSenior Management mandated thatprojects better track IFC’s contributionto its mission and its commitment tothe Millennium Development Goals. InJune 2007, IFC’s Development Effec-tiveness unit and the Gender Programfollowed by commissioning a reviewthat was to examine how IFC invest-ment projects track and report theirgender effects. The review comprisedthe entire active investment portfolioand showed that 3 percent of IFC proj-ects contained a reference to gender.

Leading up to the integration of coregender indicators in DOTS, the De-velopment Effectiveness team wentthrough a six month process thatstarted with a dialogue with industrydepartments, resulting in consultationswith DOTS departmental representa-tives, social and environmental spe-cialists and the gender team. As aresult, IFC now has in place a system-atic gender & development impacttracking process.

“Engendering DOTS by includingspecific gender indicators means thatIFC will have a better measure of itsclients’ development impact on womenand will improve its understanding ofthe role that women play in privatesector development, economic growthand poverty reduction,” explainsRoland Michelitsch, Manager, Devel-opment Effectiveness.

The gender & development impacttracking process can not only help IFCtrack and report female employmentcreated through its investments, itcan also report industry-specific gen-der outcomes, such as the number offemale and male patients treatedthrough IFC-supported investmentsin the health sector.

“Since DOTS informs the strategicdirections at IFC, engendering DOTSwill also help put gender issues morecenter stage. Ultimately, what getsmeasured gets done - including de-sirable gender-specific developmentimpacts,” adds Mr. Michelitsch.

To acknowledge the importance ofgender impact tracking to IFC’s mis-sion, IFC's Executive Vice Presidentand CEO Lars Thunell presented thefirst IFC CEO Gender Award to theDevelopment Effectiveness team fortheir gender work in March 2008.The annual IFC CEO Gender Awardwill be given to an IFC team that hasbeen exceptional in advancing IFC’sgender agenda.

For more information contactgem@ifc.org or deveffectiveness@ifc.org,or visit www.ifc.org/gender andhttp://www.ifc.org/ifcext/devresultsinvestments.nsf/Content/Home.

Liane Asta Lohde is a Private SectorDevelopment Specialist, IFC, andCarmen Niethammer is a ProgramOfficer in the Gender EntrepreneurshipMarkets, IFC.

Tracking Gender Impact at the InternationalFinance Corporation

In BriefThe World Bank Group will launch an Adolescent Girls Initiative on October 10 with the participation of PresidentRobert B. Zoellick, Nobel Laureate Michael Spence and Nike CEO Mark Parker. Other invitees include Liberian PresidentEllen Johnson Sirleaf. This public-private partnership aims to economically empower girls and young women. Threestudies on young women and employment will be released in October prior to the launch. For more information, goto www.worldbank.org/gender.

A capacity-building workshop on gender and infrastructure, co-sponsored by the World Bank and the Asian DevelopmentBank, will take place in Manila, Philippines, in November 2008. Fifteen case studies will be presented. For more information,contact dlallament@worldbank.org or kmedlin@worldbank.org.

“Equality for Women: Where Do We stand” will be launched on September 24. This new World Bank and OECDpublication takes stock of progress on the MDG3, identifies the most important gaps and proposes a way forward.The launch is co-hosted by the International Center for Research on Women at their Washington DC headquarters,with a panel discussion on gender and development. For more information, contact abrunais@worldbank.org.

Global Entrepreneurship Week, an initiative that encourages young people to explore their entrepreneurial potential,will take place November 17-23 with events in over 65 countries. With support from the GAP, special events will bededicated to women's entrepreneurship. For more information, contact jferreira@unleashingideas.org.

Gender Equality as Smart Economics • September 2008 5

By Lynn Brown and Catherine Ragasa

Women are estimated to make up most of the world’sagricultural workforce, but this is often overlooked in

policy design, which can result in misguided policies andprograms, foregone agricultural output and income, andpotentially exacerbated levels of poverty, malnutrition andhunger. This is troubling in an international context wherefood prices have increased by over 60 percent since Jan-uary 2008, increasing the number of poor by an estimated73 million to 105 million people.

The forthcoming (October 8, 2008) World Bank-FAO-IFADpublication, Gender in Agriculture Sourcebook, highlightsthe pervasive gender inequalities in access to productiveresources and political voice in the agriculture sector andpresents evidence of benefits from gender-responsive actions.The Sourcebook provides a practical guidance for practi-tioners in integrating gender into operations and calls forgreater investment in gender equality as an essential com-ponent of agricultural productivity and as a long-termsolution to the food price crisis.

The most urgent step is to strengthen property rights, assetownership and access to credit services, technology andmarketing channels for women working in agriculture.There has been some progress over the last decade; forinstance, many African countries have passed laws tostrengthen women’s land rights. Ethiopia, for one, issuedcertificates to about six million households for 18 millionplots between 2003 and 2005, which documented inher-itable land use rights for men and women. The womenwho received certificates almost universally reported thishad improved their economic and social status and, afterthe titling, both men and women invested more in theirland. In Kenya, studies estimate that redistributing inputsequally between women and men farmers could result inup to 20 percent increased agricultural yields, and doublethe national GDP from 4.3 to 8.3 percent.1

Women tend to focus on crops for household consumptionand to sell any excess while men cultivate crops primarilyfor sale, leading to a disproportionate portion of agricul-tural income going to men. This may result in a suboptimalsituation for the household: studies show that when womencontrol the income, households spend a significant degreemore of their income on food consumption and on children’shealth and schooling, which benefits the household greatlyin the long run.

The establishment of women’s groups and networks hasproved to be one way to bolster their agricultural income.Mainstreaming gender into policies and institutions is alsovital. Numerous examples demonstrate the importance ofsetting quotas that increase the representation of womenin user groups. For example, the Karnataka WatershedDevelopment Project in India, meant to improve theproductive potential of watersheds, involved the womenfrom the community from the onset by offering them

training programs and explicitly including them in farmergroups. The project did not only improve agricultural yieldswith crop diversity increasing from 4 to 9 varieties, but70 percent of the women in the community said the projecthad improved their lives. Average household income alsowent up by US$373 in the community.

In many parts of the world, Ministries of Agriculture andtheir researchers and policy-makers are dominated bymen; for example, women make up just 18 percent ofAfrican agricultural scientists. In such a scenario, there isa risk that the important perspective of the rural femaleagricultural worker and the constraints and opportunitiesthat she faces everyday are simply lost. Ensuring a pipelineof qualified female candidates for senior positions in publicand private agriculture organizations could be a way toensure that women agricultural workers receive the policyand project support they need to raise households’ foodsecurity, incomes and welfare.

Against the backdrop of a food crisis that is now estimatedto quickly increase the ranks of the undernourished fromtoday’s 800 million people, the gender inequities that con-tinue to constrain agriculture from achieving its potentialoutput and its possibility to spread food security and reducepoverty levels should be addressed.

Lynn Brown is a Rural Development Specialist andCatherine Ragasa is an Agricultural Economist inthe Agriculture and Rural Development Department.For more information about the Sourcebook, contactcragasa@worldbank.org.

The important role of women in agriculture in many parts of the worldcalls for urgent attention to gender specific policies.

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Women in Agriculture

1 World Bank. 2007a. Gender and Economic Growth in Kenya.Washington, DC: World Bank.

Gender Equality as Smart Economics • September 20086

By Pamela Cox

Why is the economic empower-ment of women so important in

Latin America and the Caribbean(LAC)? The answer is that it is notonly an equity issue but it is alsoessential to accelerate the reductionof poverty and inequality.

The capability of Latin American andCaribbean women to participate inmarkets has increased greatly in thepast decades. We have seen a loweringof fertility rates, which releases timefor income-generating activity; theexpansion of access to basic servicessuch as water and electricity has fur-ther reduced the burden of domesticchores; there has been a closing, andin some cases a reversal, of gendergaps in education; and the share ofland and property titles in the handsof women has increased and providedthem with sources of economicempowerment. In Peru for instance,secure land titles have positivelyaffected women’s labor force partici-pation as they no longer have to stayhome to guard the property andprevent evictions.

However, while the region has beensuccessful at building the capabilitiesof women, economic opportunitiesfor women remain restricted. Womenstill have lower labor market partici-pation. This matters for growth andpoverty. For example, raising thelabor force participation rate ofChilean women from its actual lowlevel of 37 percent up to 50 percent(which is the average of countries atChile’s level of income) would increasethe average per capita income bynearly 8 percent and decrease povertyby 16 percent.

Women earn less than men. This gapis not only caused by diffuse discrim-ination in the labor market, but alsoby labor regulations that raise thecost of hiring women. Occupationalsegregation by sex is also an impor-tant driver of wage gaps. Gender-based occupational segregation isextremely high in Latin Americawhere women are concentrated inlow-paying jobs and low-productivitysectors. Up to 25 percent of urbanpoor women in LAC work in domesticservices. Women also crowd into theinformal sector: research from Boliviashow that in 2005, 71 percent ofwomen in urban areas were em-ployed informally compared to 54percent of men. Finally, women con-tinue to have restricted access toland and property rights and are lesslikely to rely on formal banking andfinancial services.

In the last few years, gender-specificissues have been successfully includedin the social sectors, i.e. educationand health, in World Bank operationsin LAC. We are now actively workingto incorporate gender perspectives inthe productive sectors: infrastructure,private sector development, labor,land and financial markets. Demandsfrom client countries on gender is-sues are simultaneously moving be-yond health and education to theseproductive sectors. These demandsare becoming increasingly sophisti-cated: the challenge is no longer sim-ply to increase women’s labor forceparticipation but to enhance thequality of their participation.

We have begun this work throughprojects funded by Gender Equalityas Smart Economics. The projectsunderway include analytical work ongender and informality in Bolivia,gender mainstreaming in a series ofoperations, including rural roadsprojects in Mexico, labor marketinterventions in Chile and Argentina,property and land titling projects inPeru and Honduras, and pilot andtests of interventions to enhance theincome-generation capabilities ofpoor rural women in Nicaragua.

Our work to empower women eco-nomically in Latin America and theCaribbean is far from over, but withthe support of Gender Equality asSmart Economics, we look forward tocontinue addressing new and emerg-ing demands for gender equity inour region.

Pamela Cox is the World Bank VicePresident for Latin America and theCaribbean region.

The Power of Creating Economic Opportunities for Women

Innovative Approaches in Latin Americaand the Caribbean

Pamela Cox is the World Bank Vice Presidentfor Latin America and the Caribbean region.

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Gender Equality as Smart Economics • September 2008 7

By Diego F. Angel-Urdinola

Macedonia’s low rate of employ-ment sets it apart from its South

Eastern European neighbors; a newstudy by the World Bank’s Europe andCentral Asia Region, with fundingfrom Gender Equality as Smart Eco-nomics, estimates that only some 60percent of the working-age populationis economically active, with women’slevel even lower. The study finds thatmany economically inactive womenbelong to the minority Albanian, Turk-ish and Roma Muslim communities.

Sixteen women and seven men fromMacedonia’s major ethnic groups;Macedonian, Albanian, Turkish, Serband Roma; participated in the study,which is called “Analyzing the reasonsfor economic inactivity among womeninMacedonia.”While men and womenfrom different ethnicities cited nepo-tism and lack of personal connectionsas a main obstacle, the results showstark differences between women fromdifferent ethnic groups. With only 11percent estimated to be economicallyactive, women of Albanian origin were35 percent less likely to be employedthan women of Macedonian origin.

This has no recent historical prece-dent in Macedonia: before the layoffsthat followed the transition in 1990,female labor force participation wasmuch higher than today. Most Mace-donian women in the study say theywant to work but that it is difficult forthem to find paid employment. OneMacedonianwoman, aged 50, said “Weare the generation that has sufferedmost from the transition. At this ageno one wants to employ you.”

Meanwhile, Albanian, Turkish andsome Roma women say that tradi-tional norms confine them to householdwork, and burden them with tasksthat limit the possibility of seekingemployment. Many of them say theynever received a secondary educationbecause their communities do notconsider it necessary. Low marketwages for unskilled workers and dif-ficult working conditions are addi-tional deterrents. “Even if the

husband earns only 200 denars perday, the wife should stay at home,prepare the meal, clean, to bearound for the kids,” explained oneAlbanian woman.

The study recommends increasingwomen’s and men’s educational oppor-tunities while supporting the imple-mentation of existing laws. Thegovernment’s new policy of makingsecondary education compulsory,effective from September 2008, mayboth help improve educational levelsand increase economic activity. Thestudy also recommends that theMacedonian Employment Agencyteam up with universities to providespecific qualification programs for theunemployed, with a focus on profes-sions in high demand. In addition,accreditation systems could be put inplace for individuals who have skillsrelated to crafts, enabling women whocannot work outside the home to earnan income. Finally, the study proposeshelping women enter the labor forceby encouraging more flexible forms ofemployment in the formal job sectorlike part-time jobs. This could attractwomen into the formal sector whilehaving the added benefit of boostingthe respect for labor rights.

The study suggests, however, that thefactors preventing women from mi-nority groups to participate fully inthe economy are deep-rooted, and

the initiatives above may have limitedeffect in these communities. The studysuggests that representatives fromNGOsworking on women’s issues could beeffective in changing the traditionaloutlook on female education and em-ployment at the individual and familylevel. Women appear to trust theseorganizations and rely on them whenit comes to seeking training.

This study will be delivered to theMacedonian government in October2008 as part of the Macedonia LaborMarket Assessment, and will be a re-source for the implementation of futurelabor market reforms.

Diego F. Angel-Urdinola is an Econo-mist in the World Bank’s Europe andCentral Asia region.

Why Are Low-Skilled Women FromMinorityGroups Economically Inactive In Macedonia?

Traditional values in Macedonia deter manywomen from working outside the home.

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Integrating Women intoLabor Markets, a Priorityfor the Gender Action PlanWomen’s participation rates in the labormarket lag behind men’s in virtually allcountries. The objective of the labor marketprojects funded under the Gender Action Plan(GAP), Gender Equality as Smart Economics, isto identify the constraints to women’s laborforce participation and access to quality em-ployment in order to design better policies andprograms to stimulate women’s employment.

To do this, the GAP set out to improve sta-tistics on women’s labor force participationin both the formal and informal sectors, ex-pand the knowledge base of gender issues inlabor markets through studies and initiateimpact evaluations. It also strives to increaseawareness by policy makers of the importanceof women’s economic empowerment forhousehold, community, and country outcomes.

In the area of statistics, the GAP has partneredwith the UN for Marrakesh Action Plan forStatistics (MAPS) to improve the availabilityand quality of sex-disaggregated employmentdata. In terms of analytical work, the GAPfunds research projects and Economic andSector Work to better understand femaleemployment in the formal and informal sectors,the determinants of male/female wage andproductivity gaps, and the structure of labormarkets.

There is also an imperfect understanding ofthe relative impact of initiatives to enhancefemale participation in the labor marketand the quality of women’s work becauseimpact evaluations are rare. For this reason,the GAP allocates a substantial amount ofits budget to fund impact evaluations.

By Hoa Thi Mong Pham

The increase of women’s retirementage has been on policy makers’

agenda for a decade in Vietnam.Women in Vietnam currently retire atage 55, a full five years earlier thanmen. With the economic and socialcontext rapidly changing, however,incentives for closing this retirementgender gap grow stronger.

While the current policy cuts women’scareers short five years early andthus hurts their professional develop-ment, many women are opposed toclosing this gender gap. The currentsystem offers an additional transfer ofresources to women, in effect givingwomen a higher pension at retire-ment than men in relation to theircontribution. Moreover, women inVietnam usually live longer than men,and thereby receive more pensionpayments over a full life cycle.

On the other hand, Vietnam’s socialsecurity programs face an importantfinancial strain because of women’searlier retirement, and its sustain-ability could be jeopardized in the longterm without reform. With fundingfrom Gender Equality as Smart Eco-nomics, the World Bank’s East Asiaand Pacific region initiated a study tohelp design a reform that secures thefinancial viability of the pension systemin the long-term while minimizing itsnegative social effects.

The study, carried out by an interna-tional social security specialist andVietnam’s Institute of Labor Scienceand Social affairs, was finalized inJuly 2008 with interesting results.Opponents of the reform maintainwomen suffer more health problemsthan men and therefore merit anearlier retirement as they would notbe able to continue to work. However,many women pensioners continue toparticipate actively in the labor mar-ket after retirement: about 61 percentof retirees aged 51-54 and 55 percentaged 55-59 work, mostly in the infor-mal sector. Opponents also say thatincreasing women’s retirement ageeffectively limits job opportunities for

young people who are about to enterthe labor market for the first time.Meanwhile, the economy’s rapidexpansion and transition makes itunlikely that older women workinglonger would limit job opportunitiesfor young men and women.

There is also evidence showing thatmany women, especially in youngercohorts who tend to have more edu-cation, see the mandatory retirementat 55 as a problem. “Among youngerwomen there is a concern that thelower pension age is reducing theiropportunities as the cut-off for pro-motions and training is also five yearslower for women than men,” explainsGillian Brown, Senior Gender Spe-cialist in the World Bank East AsiaPacific region.

For example, according to publicsector regulation, applicants’ age isan important factor for promotion,and, in fact, for most promotions,women officials must be no older than50, as compared to 55 for men. Unlikemen, therefore, women aged 50 to 55are rarely considered for promotion.In the private sector, meanwhile, in-centives are skewed against helpingrelatively older women in the work-force sharpen their productivity, sincethey will stop working at 55. The ear-lier retirement age also contributes towomen earning on average 12 percent

less than men in rural areas and 13percent less in urban areas, andhaving fewer training opportunities.

The study also finds that the currentsubsidy for women’s early retirementrepresent 0.4 percent of Vietnam’s GDP,and as such places a heavy burden onthe social security system. And theburden is set to increase soon for de-mographic reasons, as large cohorts ofworkers from the private sector retire.

Pension reform is difficult in anysociety, and closing the gender gap inVietnam will be a challenge. Among anumber of proposals, the Bank-fundedstudy suggests that women be giventhe right to work and contribute untilthe age of 60, if they should so wish,and that the incentives to contributeafter age 55 be made gender-neutralby reducing the coefficient in thepension formula for women graduallyover a ten year period until it is thesame as for men. The Government ofVietnam plans to revise its Labor Codein 2009, and it is likely that the pro-posed options will be considered inthe process of drafting it. They mayalso be considered for inclusion intothe next World Bank Poverty Reduc-tion Support Credit for Vietnam.

Hoa Thi Mong Pham is a SeniorSocial Development Specialist in theWorld Bank East Asia Pacific region.

Young, educated women in Vietnam feel the early retirement age for women reduces theirprofessional opportunities.

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Myth BustingThe Facts aboutWomen’s Retirement Age in Vietnam

8 Gender Equality as Smart Economics • September 2008