Attachment_5___Gender_Analysis.pdf

ATTACHMENT 5

Gender Analysis

EDGE’s overall goal is to support the economic growth of Western Balkans countries, with the specific objective of guiding them toward compliance with European Union (EU) economic accession criteria. EDGE will implement activities directly in Albania, Macedonia and Serbia and possibly also in Bosnia and Herzegovina and Kosovo as appropriate. The key issues that Project interventions will seek to address include unemployment, low level of economic integration within the region and with the EU, and strengthening the financial sector to improve access to finance for businesses. These issues impact women and men differently under the three Project IRs:

IR 1 - Improved Business Enabling Environment and Reduced Barriers to Trade

IR 2 - Improved Financial Sector Stability with Increased Access to Finance

IR 3 - Improved Competitiveness through Value Chains and Trade Facilitation

Access to Finance

The Project will implement interventions to improve access to finance, which will contribute to:

IR 2 - Improved Financial Sector Stability with Increased Access to Finance

IR 3 –Improved Competitiveness through Value Chains and Trade Facilitation.

Access to finance is a key issue for small and medium enterprises (SMEs) throughout the

Balkans, and is commonly identified as a significant obstacle to business expansion. While the region is dominated by European banks, these banks are typically very liquid and profitable but tend to lend to large firms and are risk-averse. This situation became significantly worse during the Eurozone financial crisis, where SME lending dried up.

There is evidence that women-owned businesses face even greater challenges in seeking to access credit, including higher interest rates. Based on a survey done in 2009 by the EBRD, women-managed firms with five or more employees are 5.6% less likely to secure a loan than firms managed by men.

They also face, on average, 0.6% higher interest rates. This is in part due to perception, i.e., that lending to women is more risky, but also due to the skills gap of women in producing business plans and financial plans required by banks to lend. In the summer of 2013, the Bureau’s Regional Competitiveness Initiative (RCI) project through the Center for Entrepreneurship and Executive Development (CEED) conducted an analysis and found that access to finance is a major obstacle to the growth of women-owned firms.

The Project envisions working with women entrepreneurs and business leaders to improve skills in this area. This will include addressing specific needs identified in the three target EDGE countries of Albania, Macedonia, and Serbia, with workshops targeted to such areas as revenue projections, pricing, cash flow management, and access to information on financial products relevant to women’s business needs.

Business Environment and Enterprise Performance Survey (BEEPS), EBRD, 2009.

Labor

The Project will implement many activities to improve workforce skills that will seek to contribute to the growth of SMEs and thereby increase employment. These will focus on the supply side of employment and will contribute to:

IR 3 – Improved Competitiveness through Value Chains and Trade Promotion.

The Project will emphasize promoting employment opportunities and will address issues that impact unemployment by sex. Women make up slightly less than half of the labor force across the region, which represents a high level of participation. The gender gap in unemployment is relatively low in the region, although the gap is higher in the Balkans than in Eurasia. Women are also more likely to work part-time. However, there is a significant lack of access to part-time work, which affects women’s overall decision to join the workforce. There are also regulatory issues that impact the availability of formal part-time employment.

Also, in the CEED study noted above, women who participated in the survey and focus groups identified specific skill areas where they would benefit from further training. For women in management roles these include soft-skill areas such as organizational behavior, and leadership and management. In terms of technical areas, these include business strategy and marketing.

Further interventions will be designed to target these areas.

Competitiveness

The Project will implement many activities to contribute to the growth of SMEs, which are intended to increase employment. These will contribute to:

IR 3 – Improved Competitiveness through Value Chains and Trade Facilitation

IR 1 – Improved Business Enabling Environment and Reduced Barriers to Trade

(as an improved business environment also contributes broadly to business growth).

Cultural norms often affect the type of employment that women can attain. The majority of women are employed in the service sector. In the Balkans, about two-thirds of employed women are in the service sector and also tend to work in the public sector. Men are more likely to be employed in manufacturing, construction, and transportation, while women are more likely to work in communal services, retail, and restaurants.

The Project will work in service sectors where women account for a large percentage of the workforce and are often in leadership positions. These include tourism in particular, where hospitality and service standards are seen as a major impediment to competitiveness. The ICT sector also includes several female managers, particularly in incubators, innovation centers and other business support service organizations (BSOs) that the project will support. The Project may also consider interventions in the footwear and textile sectors, where women account for a high percentage of the workforce, to enhance the competitiveness of these sectors and provide specific training in advanced production techniques.

Beyond sector-specific interventions, special attention will be paid to sex differences in management and leadership positions, representation by gender, and sex differences by sectors. Research indicates that about one in five firms in the region has a woman as a top manager. This low number is due to cultural issues, as well as skills gaps and lack of networking among women. Again, as a result of the CEED study, the Project will design activities that address a range of skills needs for women in mid-management and that seek to develop approaches that will improve their ability to advance in their companies or in industry overall. These activities will also include a networking component.

Entrepreneurship

The Project will also seek to build capacity of female entrepreneurs. While the ratio of female to male entrepreneurs in the region is one to three, which is similar to world levels, the recent

Eurozone crisis created more pressure for women to start businesses, often out of necessity to support the family. This was a finding of the same CEED Women’s Entrepreneurship study noted above where many women said they had joined the job market due to loss of jobs by other family members. This was compounded by a decline in remittances, as family members working abroad in such countries as Italy and Greece also lost their jobs. Thus, entrepreneurship by women is an important means to securing employment and job stability as the region faces uncertainty in the labor market. Self-employment plays a large role in economies that are agriculturally focused.

Entrepreneurship activities undertaken by the Project will include efforts to ensure female participation and seek to address skills and information gaps that disadvantage women in business. Again, referencing the same CEED report, specific technical skills barriers were identified, including business skills such as accounting and managing human resources.

Furthermore, participants identified an information gap with regard to the regulatory requirements for starting and operating a business. For example, specific issues were noted in terms of compliance with tax laws and how to file taxes appropriately. This is likely due in part to a lack of networking opportunities where women are able to share information or have access to information. The Project will organize conferences and seminars that provide women with critically needed business skills, while at the same time giving them the opportunity to network and share information.

Illustrative Activities

IR 1 - Improved Business Enabling Environment and Reduced Barriers to Trade

Engage female-owned and female-managed businesses to participate in public-private partnerships, mentorships and networking programs

Develop tools and information resources that will address information gaps identified by women, such as tax and business registration areas

IR 2 - Improved Financial Sector Stability with Increased Access to Finance

Provide training in such areas as pricing, revenue projections, and cash-flow analysis which will assist women in applying for credit

Tailor sources of credit to women’s needs

Start-up support through open competitions and other access to venture capital and angel investment networks

IR 3 - Improved Competitiveness through Value Chains and Trade Promotion

Design entrepreneurship programs specifically to address barriers faced by women who wish to start up or expand their businesses and create networking opportunities

Actively support the skill development of women managers in priority, soft-skill areas, such as human resources and leadership

Provide targeted training programs to build capacity in priority service sectors, such as tourism and ICT, where women are often in leadership positions and support women in obtaining key standards and certifications

In addition, throughout implementation, EDGE will monitor and measure how women are integrated or targeted in EG programming and continually seek to develop networking, training, and information-sharing activities to address the identified gaps for women in business.

The Project will use sex-disaggregated data. Through setting and meeting targets related to the numbers of female entrepreneurs and women managers attending trainings and women receiving international standards and certifications, the Project seeks to reach both sexes.

When selecting value chains and sectors for support, special consideration will be given to women-owned entities to ensure gender equity. Sex-disaggregated analyses and data are important to chart the process. Thus, the Project will incorporate gender considerations into its activities, with an emphasis on working in value chains that include women, supporting growth in sectors with high levels of female participation, and addressing gender issues in training initiatives related to entrepreneurship, standards and certifications, and management skills.

Below are some findings applicable to the Balkans identified in the USAID gender analyses in each country:

Many hold to relatively traditional stereotypes about men and women and believe that men and women should continue to fulfill traditional roles

Identified gender issues include economic empowerment for women

The economic status of women is often characterized by high unemployment, low levels of labor market activity, and low pay

Women face many barriers to employment and entrepreneurship, including lack of time due to traditional family obligations, obsolete vocational skills, discrimination, problems accessing credit, lack of official title to land, and lack of experience with business, among others

For men, key barriers are attitudinal and work-ethic factors that militate against men accepting jobs that they perceive to be beneath them as men.

Again, EDGE’s overall goal is to support economic growth of the Western Balkans countries.

It will implement activities across borders and directly in Albania, Macedonia, and Serbia, and possibly Bosnia and Herzegovina and Kosovo as appropriate. Therefore, it is important to also look at unique gender circumstances within each of those countries.

Albania

Attitudes and stereotypes about gender roles

People living in rural areas hold to more traditional stereotypes than those who live in the cities, especially Tirana. Current gender roles and stereotypes share many common elements.

Generally, women are still expected to take care of the household and of children, whether they are employed or not. For many women household responsibilities create a serious “double burden” of paid and unpaid work. In more traditional households, women often live with their husbands’ families, and their mothers-in-law play a dominant role in their lives. Gender roles in general dictate that women are expected to defer to the opinions of men and are not deemed capable of being decision-makers themselves. Generally, men are expected to be the bread-winners of the family and if unemployed, to spend their time looking for work. In more traditional households, men also tend to have greater control over money and are expected to need some time to socialize with friends. Many of those who work on gender issues believe that patriarchal attitudes and beliefs are the fundamental underpinning of women’s inequality in the many sectors in which they are disadvantaged and that true gender equality cannot and will not be achieved without consciousness-raising and a change in views about the “proper” roles for men and women in society.

Employment and economic status of women

Issues related to employment and economic status were far and away among the most frequently cited gender inequalities facing Albanian women. Many people believe that poverty in Albania is becoming increasingly feminized, and women’s economic status is undercut by many factors, including the out-migration of men, cuts in social spending and social services, exclusion from the privatization process, and high levels of unemployment or employment in the informal sector. In the post-communist period, women’s employment levels dropped dramatically due to the closure of many industries that provided large-scale employment opportunities for women; a predominance of emerging business sectors that tended to disproportionately employ men, such as construction and trade; and migration from rural to urban areas where women do not have the education or skills levels to successfully compete for employment

In the non-agricultural private sector, which has enjoyed substantial expansion since the start of USAID programming for the E&E region, males dominate, making up 70.3% of those who are employed in this sector. Females make up a higher percentage of those who are employed in the agricultural private sector (56.7%) and they comprise 45.7% of the total number of employed people in the public sector. The survey conducted by the Gender Alliance for

Development Centre (see fn. 6) also revealed that most women who were employed in the non-agricultural private sector were employed in one of three areas: the financial sector, the textile industry, or the retail sector.

Barriers to employment for women

There are particular barriers facing women who wish to enter the labor market and obtain jobs, including the following:

Lack of time due to family obligations

Lack of support services, such as affordable childcare that would facilitate balancing work and family responsibilities

Obsolete vocational skills and lack of familiarity with computers and other technologies

Discriminatory practices in which employers are less likely to hire married women or those who may become pregnant

Employers’ unwillingness to hire single mothers due to fear that they will not be reliable workers as a result of their sole responsibility for issues concerning their children.

Except where otherwise noted, statistics are from INSTAT. (2009). Women and Men in Albania 2008.

Gender Alliance for Development Centre. (2010). Women’s Labour Rights in Albania. Financed by the European

Union.

Nearly all businesses in Albania are SMEs. It can be difficult to accurately gauge the number of women-run businesses because some businesses that are officially registered in the husband’s name are actually run by the wife. Women’s business associations appear to some to be focusing more on trainings for novice businesswomen than supporting established ones.

Women are less likely than men to be entrepreneurs. Women who do wish to start or grow their own businesses face many barriers, including:

Problems accessing credit, because of poverty or lack of collateral (women own much less property and real estate in Albania as compared to men)

Lack of funds to start up a business

Lack of contacts and prior experience that result in low levels of knowledge about managing businesses successfully and how to deal with financial institutions

Inability to seek credit because, despite the fact that a woman operates a business, it is registered under her husband’s name

Fear of doing something in what is not seen as a traditional arena for women

The tendency for women entrepreneurs to focus on sectors that reflect traditional “women’s work” which often pays less.

Serbia

Attitudes and Stereotypes about Gender Roles

Gender issues may not be seen as important by the majority of Serbians and they believe that gender roles are not overly traditional, although to some extent they have become more traditional as compared to the period when Serbia was part of Yugoslavia. Some geographic regions of the country (especially the South) are widely considered to hold more traditional views than other regions.

In 2007, in conjunction with the Community Revitalization Through Democratic Action

(CRDA) program, USAID funded a survey on some aspects of gender beliefs that included

2,535 interviewees in a three-stage random, representative, stratified sample . This survey found that a majority of both women and men disagreed with the statement that “it is most useful for a society that there is a traditional role separation in the family where a woman should work in the house and raise children and a man has a job and earns money,” although more men (38%) than women (28%) agreed to some extent with this statement. Unemployment was mentioned as the biggest problem facing both men and women in Serbia (although it is a bigger problem for men than for women). Approximately 10.5% of the respondents thought that violence was the single biggest problem facing women and 11.5% felt that discrimination was the single biggest issue.

According to the 2010 gender assessment for USAID/Serbia, attitudes towards gender roles are not “overly traditional.” However, women do face different barriers than men. Many constraints are amplified in rural areas as women may be less educated, belong to minority groups, and have less economic opportunities outside of the home. Women on average also have less free time than men. They take on a greater role in household and family responsibilities. These unpaid responsibilities to family and household chores leave women

PowerPoint presentation on “Gender Equality”, put together by Strategic Marketing Research in the context of an end of project report on the CRDA program.

with little free time. This means that they have less time to pursue employment or entrepreneurial activities. The types of firms owned by women are different and often smaller, have fewer employees, and are concentrated in different subsectors, such as the textile and garment industries, with lower representation in metals, transport, and electronics. Their businesses also tend to perform less well due to their smaller size. Genders tend to be segregated along private and public sector lines. In Serbia, 32 percent of employed women work in the public sector compared to 24 percent of employed men. This could be due to the benefits available in the public sector, such as maternity leave and flexible hours.

Women in Business and Trade

A crucial issue recognized in Serbia is the economic empowerment of women. Fewer than half of adult women are economically active in Serbia. Statistics have shown that, when compared to men, women are self-employed less often, i.e., they are less likely to start their own business. While the National Association of Regional Development (NARD) reported that the number of companies led by women in Serbia has increased over the last few years, women- owned or co-owned businesses average 25 percent of all businesses in Serbia compared to 34 percent in Europe. The recent 2010 gender assessment for USAID/Serbia found several key constraints to gender equality in Serbia. Key barriers that women entrepreneurs (and, in some cases, women seeking other forms of employment) face include:

Lack of time due to family obligations

Lack of support services, such as affordable childcare that would facilitate balancing work and family responsibilities

Lack of funds to start up a business

Lack of training or concrete skills that are needed in the area in which they wish to work, especially for older women

Lack of familiarity with computers and other modern technologies

Problems accessing credit, because of poverty or lack of access to collateral

(women own less property and real estate in Serbia compared to men)

The tendency for women entrepreneurs to focus on traditional “women’s work” which often pays less or is less likely to result in a business with high earning potential

Attitudinal issues related to lack of confidence in one’s ability to open a business and general hopelessness about personal economic prospects.

Macedonia

Attitudes and Stereotypes about Gender Roles

Gender issues may not be seen as important by the majority and most do not recognize many inequalities in Macedonian society. To some extent this may be because in the former

Yugoslavia, the state ideology was explicitly one of gender equality (although, even at that time, minority women did not receive equal treatment). In addition, most Macedonians are said to assume that the term “gender” refers exclusively to women and concern about “women’s issues.”

Macedonian society is patriarchal, with most citizens still believing that women are primarily responsible for maintaining the home and raising the children, and that men are expected to be the breadwinners of the household.

Many people feel that Macedonian women are by and large comfortable with the status quo and that many do not want to take on the double burden of work and home. The minority ethnic groups in the country hold to more traditional stereotypes than ethnic Macedonians, and gender roles are reported to be more traditional in rural areas, among older Macedonians and among those with a lower level of education. The

Macedonian Orthodox Church and Muslim religious officials are seen as promoters of traditional gender roles, and increasingly the Government of Macedonia (GoM) is seen this way as well.

Employment and Economic Status of Women

Employment and economic status were far and away the most frequently cited issues relating to gender inequality facing Macedonian women. In 2006, the employment rate for women was

27%, whereas for men it was 43.5%. Unemployment rates for women and men were quite similar (37.2% and 35.3% respectively). The most dramatic gender gap is in activity rates, with only 42.9% of women active in the labor market versus 67.3% of men. Between the ages of 25 and 54, roughly 80% of women are inactive (the majority of these are housewives, many by choice). There are also striking gender differences in type of employment. 79% of those who are classified as “employer” by the GoM are male, as are 83% of those who are classified as self-employed. 60% of those classified as unpaid family workers are female. Women are also more likely than men to work in the informal economy.

An analysis based on the OECD

Gender, Institutions and Development Database revealed that of 28 countries in the E&E region, Macedonia had the third highest gender pay gap; women earned on average only 49% of what men earned, even though Macedonian law requires equal pay for equal work.

Gender distributions in various sectors of employment are markedly skewed with women making up the majority of workers in the health, social affairs, and education sectors, and men predominating in construction, mining, transport, and communication.

In the agricultural sector, there are more men than women who work both on individual agricultural holdings and in agricultural businesses. There are particular barriers facing women who wish to enter the labor market and obtain jobs, including:

Lack of time due to family obligations

Lack of support services, such as affordable childcare that would facilitate balancing work and family responsibilities

Lack of training or concrete skills that are needed in the area in which they wish to work, especially for older women

Lack of familiarity with computers and other modern technologies

Discriminatory practices in which employers are less likely to hire married women or those who may become pregnant or insist that women sign a contract agreeing not to become pregnant for a certain number of years as a criterion for employment

Discriminatory practices in which women are not selected for employment on the basis of perceived lack of physical attractiveness in some sectors

Employers’ unwillingness to hire single mothers.

One interviewee told us that a time-use survey of men and women that was conducted some years ago revealed that the average Macedonian woman spent 5 hours a day in the kitchen.

Unless otherwise noted, statistics cited are from Women and Men in Macedonia (2008), a study carried out by

USAID.

Government of Macedonia. (2009). Report on the Progress Towards the Millennium Development Goals.

Government of Macedonia. (2009). Report on the Progress Towards the Millennium Development Goals.

Management opportunities

Although precise statistics are difficult to find, there is agreement on the fact that women are much less likely than men to be managers or high-level decision-makers in businesses.

Barriers for women obtaining more management positions include:

The unwillingness of women to take on more responsibility in their employment or to take jobs that are perceived as high stress; and

Employers’ unwillingness to promote most women, even to mid-level positions.

As was mentioned above, women are less likely than men to be entrepreneurs. Women who do wish to start or grow their own businesses face many of the barriers, including:

Lack of funds to start up a business

Problems accessing credit because of poverty or lack of collateral (women own much less property and real estate in Macedonia as compared to men)

Fear of doing something in what is not seen as a traditional arena for women

The tendency for women entrepreneurs to focus on traditional “women’s work” which often pays less or is less likely to result in a business with high earning potential

Attitudinal issues related to a lack of confidence in one’s ability to open a business.

Balkans Gender Analyses:

2010 Gender Assessment for USAID/Albania, Catherine Cozzarelli, USAID/E&E, August 12, 2010

2010 Gender Assessment for USAID/Macedonia, Catherine Cozzarelli, USAID/E&E, June 23, 2010

2010 Gender Assessment for USAID/Montenegro, Catherine Cozzarelli, USAID/E&E, March 30, 2010

2010 Gender Assessment for USAID/Serbia, Catherine Cozzarelli, USAID/E&E, April 13, 2010

Key Findings of Gender Analysis

While women in the E&E region have good access to education, and are highly educated, gaps in labor force participation, employment and wage equality remain.

While women and men in the Europe and Eurasia countries have relatively equal levels of educational achievement, and in several countries, women account for higher percent of enrollments in tertiary education, this educational equality has not translated into more equal labor market outcomes in labor force participation, employment rates, or wage equality for similar work.

The World Bank Doing Business Report identifies some key regulatory areas that create a greater hindrance for women, although the E&E region overall has an equal legal environment.

The 2017 World Bank’s Doing Business Report incorporates a gender lens to capture challenges faced by women entrepreneurs. Three indicators – starting a business, registering property, and enforcing contracts--measure whether women and men have the same rights or face the same obstacles in the three areas. Economies that limit women’s access in the above three areas have fewer women working in the private sector both as employees and employers.

According to 2016 Women, Business and the Law Report, legal restrictions on women’s employment and entrepreneurship constrain women’s ability to make economic decisions and choices and have real consequences for economic outcomes that persist throughout a woman’s life. However, the Europe and Eurasia transition countries fare well in terms of legal equality for women and men.

The 2016 Global Gender Gap Report finds a mixed record in terms of Economic Participation and

Opportunity in the E&E region.

The 2016 Global Gender Gap Report ranks 144 countries in four categories: (1) Economic

Participation and Opportunity; (2) Educational Attainment; (3) Health and Survival; and (4)

Political Empowerment. In Economic Participation and Opportunity, where a lower number indicates a higher rating, several Eurasia countries perform well, however many Balkan countries are in the lowest half : Belarus (5); Moldova (15); Azerbaijan (38); Ukraine (40);

Georgia (61); Armenia (69); Serbia (70); Albania (73); Macedonia (79); Montenegro (88);

Bosnia (113).

Similarly, labor force participation, which is critical to demonstrate gender equality, is mixed. Four E&E countries have women participation above 60%, including Belarus

(68%), Azerbaijan (67%), Georgia and Ukraine (62%). Albania (47%), Moldova

(44%), and Bosnia (42%) have the lowest percentages of women active in the labor market in the region. Bosnia and Macedonia also have the largest gender gaps in labor market participation, and Moldova is an outlier with considerably lower participation rates.

There is also a significant gender gap in levels of employment. The average gap for the overall region (average of the three sub-regions without accounting for population) stands at

13.3% in favor of men. The Balkans has the largest gender gap at an average of 15%, followed by the Caucasus with 14.2%, and UMB with 10.8%. In terms of individual countries, Armenia has the largest gap at 18%, followed by Albania, Macedonia and

Georgia with 17% each.

Access to Finance is an obstacle for women and men led or owned SMEs in the E&E region. In some cases, men report it as a constraint at a higher rate than women, but it remains a critical problem for both genders. In addition, women are likely further hindered by cultural issues and are more likely to be in less profitable service sectors.

Access to finance is one of the most commonly identified obstacles to growth for small and medium enterprises (SMEs) throughout the region, both for women and men led firms. In the 2013 World Bank Enterprise Survey, firms in the twelve E&E countries identified three major obstacles to growth – access to finance, the tax rate and practices of the informal sector. For SMEs surveyed in REDI’s 12-country region, “Access to Finance” was most commonly identified as the biggest obstacle to their firms, with an average of 16.3% of the countries’ respondents choosing it first among 15 options. However, firms with men as top manager tend to identify access to finance as a leading obstacle more often than those with women as top manager.

Among firms with higher growth potential, female entrepreneurs are likely to have the same access to finance as men. However, fewer women entrepreneurs belong to this category. In

This measures gaps between men and women and not country development standing, i.e., the gap may be small but it does not mean that country is doing well economically.

the absence of gender-specific legal restrictions, firm size, performance and credit worthiness are the main determinants of access to credit.

A survey of women-owned SMEs in Europe and Eurasia countries classified responses according to four categories: Unserved (do not have a loan and applied and needed a loan);

Underserved (have a loan but access to finance is a constraint, but not necessarily major or severe constraint); Well-served (have a loan and access to finance is not a constraint); and

No need (do not have a loan and did not apply and did not need). The majority (more than

50%) of women owned small and medium sized firms in the region are defined as underserved or unserved.

Access to finance for women may also be limited by non-financial barriers that can include conditions in the broader business environment that may affect women’s and men’s business differently, including legal and regulatory environment, quality of infrastructure, limited transportation, red tape/corruption, personal characteristics of the entrepreneurs (such as levels of education, management training) and unequal information about rules and regulations (taxes, registration, credit information). All of these factors may contribute to lower profits, which can make the financial institutions less likely to extend credit. Women–owned SMEs may be perceived as a higher risk.

Globally, women-owned firms tend to be concentrated in less profitable industries

(‘female industries’) such as consumer-oriented services, garments, food processing, restaurants, wholesale and retail trade, which would also make it more difficult to qualify for credit.

In the E&E region, the supply side of the financial sector is dominated by European banks, which are typically very liquid but also risk averse. While microfinance institutions (MFIs) have evolved in the region, and are often a key component of increasing access to finance for women owned businesses and entrepreneurs, it still accounts for a small percentage of lending in the region as compared to other parts of the world.

Women as Managers and Entrepreneurs

Research indicates that about one in five firms in the region have a woman as a top manager [Global Gap Report 2016], with numbers declining for the larger companies.

These low levels can be attributed to a combination of factors, including prevailing patriarchal cultural gender norms, as well as skills gaps and lack or low levels of networking among women.

Compared to other developed and developing economies, Europe and Eurasia transition economies have lower rates of entrepreneurship.

Men are more likely than women to try start a business – 16% of men and 8% of women in Eastern Europe and the Caucasus (EEC) and 17% men and 9% women South East Europe (SEE) [Ibid, p. 46, chart 3.9,]. Lack of capital was by far the top most constraint for both women and men to start a business, with

60% of women and 58% of men in the EEC region identifying it as the key obstacle, and

38% of women and 48% of men in the Balkans (SEE).

GPFI/IFC report, p.13.

Ibid, p.42, citing Sabbarval, Terrel, and Bardasi, 2009.

MIX, https://www.themix.org/mixmarket/countries-regions/eastern-europe-and-central-asia.Note that E&E +

Central Asia has 3.8 million borrowers, compared to 6.5 million in Africa, 24 million in Latin America, and close to

20 million in East Asia and Pacific. Only the Middle East and North Africa has fewer on a regional basis.

EBRD, Life in Transition III Report, 2016, p.45.

I. Background

A. Labor Market Trends in E&E

Scholars and development practitioners widely recognize that increasing gender equality in the labor market will lead to greater economic development outcomes. Recognition of the importance of gender parity in the market is reflected in the first even EBRD Gender Strategy 2016-2020.

Despite significant progress to date, gender inequalities continue to persist in the Europe and

Eurasia transition economies in several socio-economic outcomes. Considerable inequalities remain in the lower levels of women labor market participation, employment, and female entrepreneurship.

While women and men in the Europe and Eurasia countries have relatively equal levels of educational achievement, and in several countries women account for higher percentage of enrollments in tertiary education, this educational equality has not translated into more equal labor market outcomes in labor force participation, employment rates, or wage equality for similar work.

One reason for this is a gender divide or ‘feminization of professions’ where a majority of women continue to dominate enrollments and subsequently employment in social sectors, such as education, social sciences and health. Men, on the other hand, dominate hard sciences and management and find employment in sectors with significantly higher wages. Overall lower earning potential experienced by women undermines their ability to adequately save for retirement as well as engage in entrepreneurial activities. This is especially the case in rural areas where women carry out most of the unpaid work related to household, child care and/or caring for a family member.

For the first time, the 2017 World Bank’s Doing Business Report incorporates a gender lens to capture challenges faced by women entrepreneurs. Three indicators – starting a business, registering property, and enforcing contracts - measure whether women and men have the same rights or face the same obstacles in these areas (on a scale of 0-1, with 1 denoting full equality).

The Report uses data originally developed by the World Bank’s 2016 Women, Business and the

Law Report which measures how laws, regulations and institutions differentiate between women and men in ways that affect women’s ability to work or set up and operate businesses.

The Doing Business report notes that economies that limit women’s access in the above three areas have fewer women working in the private sector both as employees and employers. The Report also shows that, on average, better country performance is associated with lower income inequality and cites solid evidence that links economic development and female labor force participation. Countries that have integrated women more equitably into the workforce have improved their international competitiveness.

Similarly, the presence of legal gender disparities is linked to lower levels of female labor participation.

B. Legal Environment

Women, Business, and the Law Report 2016, World Bank Group wbl.worldbank.org/~/media/WBG/WBL/Documents/Reports/2016/Women-Business-and-the-Law-2016.pdf

The Starting a Business indicator looks at a number of required procedures disaggregated by sex, including number of days, and percentage of income per capita. The values for men and women in the Europe and Eurasia region are identical. The remaining two indicators do not show values for women in the 2016 report.

Elborgh-Woytek, Katrin, Monique Newiak, Kalpana Kochhar, Stefania Fabrizio, Kangni Kpodar, Philippe

Wingender, Benedict J. Clements and Gerd Schwartz. 2013. “Women, Work, and the Economy: Macroeconomic

Gains from Gender Equity.” IMF Staff Discussion Notes 13/10, International Monetary Fund, Washington, DC.

Duflo, Esther. 2012. “Women Empowerment and Economic Development.” Journal of Economic Literature 50 (4)

1051-79.

Reve Gonzales, Christian, Sonali Jain-Chandra, Kalpana Kochhar, Monique Newiak. 2015

According to 2016 Women, Business and the Law Report, legal differences on the basis of sex can occur in the following seven areas: accessing institutions, using property, getting a job, providing incentives to work, building credit, going to court, and protecting women from violence. Legal restrictions on women’s employment and entrepreneurship, constrain women’s ability to make economic decisions and choices and have real consequences for economic outcomes that persist throughout a woman’s life. The Europe and Eurasia transition countries fare well in terms of legal equality for women and men. With the exception of Bosnia, constitutions in all countries contain a clause on equality and all but Azerbaijan, Georgia, and Ukraine have clauses on nondiscrimination that specifically cite gender. In all countries the laws also treat women and men equally in terms of ownership rights to property, marital property regime, administration of marital property, and inheritance rights of unmarried and married women and men. In access to credit, laws in Azerbaijan, Bosnia, Kosovo, and Moldova prohibit discrimination by creditors on the basis of sex. Except for Belarus, Armenia, and Georgia, all E&E transition countries have laws on non-discrimination in hiring. Five of the countries also have laws on equal pay for the same type of work

(Bosnia, Montenegro, Belarus, Armenia, Azerbaijan).

Despite favorable legal protection, it is equally critical for gender equality that laws are well implemented and enforced, which is not always the case in practice.

C. Gender Gaps

The 2016 Global Gender Gap Report ranks 144 countries in four categories: (1) Economic

Participation and Opportunity; (2) Educational Attainment; (3) Health and Survival; and (4)

Political Empowerment. The Economic Participation and Opportunity category includes data on labor force participation, wage equality for similar work, estimated earned income (PPP), legislators, senior officials, and managers, and professional and technical workers.

In terms of overall Economic Participation and Opportunity rankings, where a lower number indicates a higher rating, several Eurasia countries perform well. However, many Balkan countries are in the lowest half (i.e., ranked below 70)

: Belarus (5); Moldova (15); Azerbaijan (38);

Ukraine (40); Georgia (61); Armenia (69); Serbia (70); Albania (73); Macedonia (79); Montenegro

(88); Bosnia (113).

Higher levels of labor force participation are critical to economic gender equality. Only four E&E countries show women participation above 60%, including Belarus (68%), Azerbaijan (67%), Georgia and Ukraine (62%). Albania (47%), Moldova (44%), and Bosnia (42%) have the lowest percentages of women active in the labor market. Bosnia and Macedonia also have the largest gender gaps in labor market participation. In UMB, Moldova is an outlier with considerably lower participation rates.

Labor Force Participation (%) (Global Gender Gap Report, 2016)

Country Rank out of 144 Women

Men

Gender Gap (%)

Albania 98 47 70 23

Bosnia 113 42 67 25

Macedonia 100 52 78 26

Global Gender Gap Report, 2016.

This measures gaps between men and women and not country development standing, i.e., the gap may be small but it does not mean that country is doing well economically.

Montenegro 75 51 65 14

Serbia 82 54 71 17

Balkan Average 52.8 69.6 21

Belarus 33 68 76 8

Moldova 30 44 49 5

Ukraine 61 62 74 12

WNIS Average 58 66.3 8.3

Armenia 83 59 76 17

Azerbaijan 17 67 72 5

Georgia 85 62 83 21

Caucasus Average 62.6 77 14.3

D. Employment and Unemployment Trends

The Balkans has the lowest levels of employment for women and men compared to the other sub-regions. The sub-regional average for women is 36% and for men is 51.4%. The Balkans also has the largest employment gender gap compared to the other two sub-regions. In UMB, Belarus has the highest gap (13.7%) and in the Caucasus, Armenia has the highest gap (18%), which is also the highest in the E&E region.

In most of the E&E transition economies, women have lower levels of unemployment than men.

Only in Serbia, Armenia and Azerbaijan do women have higher levels of unemployment. By sub-region, the Balkans has the highest levels for both women and men (19.9% and 20.5%, respectively) and the UMB has the lowest average level for women at 4%. For individual countries, the highest levels of unemployment for women and men are in Macedonia, Bosnia, and

Montenegro, and Armenia has the highest unemployment in the Caucasus.

Employment and Unemployment in Europe and Eurasia (WB 2017)

Country Employment (% to population ratio) Unemployment (% Total Labor Force)

Women Men Gap Women Men Gap

Albania 34.1 51.1 17 15.4 16.1 0.7

Bosnia 26.5 42 15.5 22.9 27 4.1

Macedonia 32.2 49.1 16.9 26.7 27.6 0.9

Montenegro 34.5 46.2 11.7 17.4 17.4 0

Serbia 36 51.4 15.4 17 14.3 2.7

Average 32.7 48 15.3 19.9 20.5

Belarus 53.7 67.4 13.7 0.5 0.6 0.1

Moldova 37.6 43.7 6.1 3.8 6.1 2.3

Ukraine 48.3 60.9 12.6 7.7 9.8 2.1

Average 46.5 57.3 10.8 4 5.5

Armenia 45.1 63.1 18 18.4 14.9 3.5

Azerbaijan 58.2 65.7 7.5 6.0 4.4 1.6

Georgia 52.1 69.1 17 10.0 12.6 2.6

Average 51.8 66 14.2 11.5 10.6

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