India's national income would increase by 27 per cent if the participation of women in the workforce matches the level of men, International Monetary Fund managing director Christine Lagarde has said.
Delivering a speech on "Women's Empowerment: An Economic Game Changer" in Los Angeles, 60-year-old Lagarde said equal pay and better economic opportunities for women boost economic growth and create a bigger pie for everyone to share.
"Empowering women can be an economic game changer for any country. For instance, if women were to participate in the labour force to the same extent as men, national income could increase by five per cent in the US, nine per cent in Japan, and 27 per cent in India," she said on Monday.
Better opportunities for women also promote diversity and reduce economic inequality around the world, she added.
"To put it differently: if you discourage half the population from fully participating in the labour market, you are essentially behaving like an airline pilot who shuts down half his engines in mid-flight. Sure, your plane will likely continue to fly, but it would be such a crazy thing to do," Lagarde said.
Noting that across the globe women were still facing multiple disadvantages and are less likely than men to have a paid job, Lagarde said only half of the world's working-age women were employed.
"If they do find paid employment, it is more likely to be in the informal sector. And if they eventually get a job in the formal sector, they earn, on average, three-quarters as much as men - even with the same level of education, and in the same occupation," she said.
Lagarde said governments have a key role to play when it comes to economic incentives that provide women a fair shot in the labour market.
"We need to promote affordable childcare, parental leave, and workplace flexibility. We need to increase women's access to finance and remove legal barriers that still exist in most countries," she said.
"We also need to push for smarter tax policies, including here in the US. Think of tax reforms to help low-income families, which are disproportionately headed by women. And think of the benefits of reducing taxation on secondary earners in households, who are-again-mostly women," she added.
"So if you add up all things that can be done in each country, you get a powerful global impact. A global economic game changer," Lagarde said, adding that most important countries have understood the need for gender equality, including the G20 grouping that account for 85 per cent of the world GDP and two-thirds of its population.
"These countries, including the US, have pledged to reduce the gap in women's labour force participation by 25 per cent by the year 2025 which would create an estimated 100 million more jobs by 2025. This would be a huge impetus to growth and would reduce poverty and inequality," Lagarde said.