How to increase female labor force participation and why is it important for the economy?

Female labor force participation rate is much lower than male labor force participation in Ukraine as in many other European countries. There are many reasons for this gap, including the wage gap between man and women, legal restrictions on female employment, the structure of the economy, child care opportunities, culture, and public policy.

Our survey of 200 Ukrainian women that are out of the labor force suggests that lack of accessible childcare and a desire to look after children on their own are the main reasons for the low rate of female labor force participation. The data also shows that there is a lack of places in the kindergartens. In 2018 there were 113 children for every 100 places in the kindergartens. However, this is not the only reason for the low rate of female labor force participation: Info Sapiens Omnibus survey that was conducted in January-March 2019, indicates that only 54% of housewives have children under 6 years old (and 14% do not have children at all). Thus, other reasons are important in explaining why a significant proportion of women are out of the labor force. Our study shows that other reasons for low female labor force participation in Ukraine include lack of necessary skills and experience, legal restrictions on women’s employment in certain industries, gender stereotypes of the employers and society, lack of attractive jobs, women’s personal choices and health issues.

Increasing female labor force participation can have a significant impact on economic growth. Aging population, negative natural population growth, and migration lead to a decrease in the size of the labor force in Ukraine and therefore, Ukraine is in urgent need of the additional workforce. According to our estimates, the Ukrainian economy can receive from 7.5 to 23.6 billion USD from the increase in the number of women in the workforce.

We propose implementing the following policy recommendations in order to achieve this:

  • creating more attractive childcare opportunities;
  • lifting legal restrictions on women’s employment in certain industries and at certain times;
  • incentivizing the creation of more jobs with the possibility of working remotely and part-time;
  • assisting women in obtaining new skills to return to the labor market;
  • combating gender stereotypes in society, discrimination by employers.

Instead, the following measures may have a negative effect on women’s employment, so we recommend to avoid them:

  • increasing cash benefits for a child;
  • extension of the duration of the childcare leave.

The data from the two surveys were used in the study. Firstly, we used the data from the Omnibus conducted by the research agency Info Sapiens. We used the data from three waves of the survey conducted between January and March 2019. The survey was conducted using the face-to-face method. Each wave of the survey included 1,000 respondents. The survey is representative of the adult population of Ukraine. In addition, we used the data of the survey of women out of the labor force ordered by the Center for Economic Strategy. The respondents were women who are currently out of job and are not actively looking for a job. A total of 200 respondents were interviewed living in all oblasts of Ukraine (excluding the Autonomous Republic of Crimea) and Kyiv city. In the Donetsk and Luhansk oblasts, the survey was conducted only on the territory controlled by the Ukrainian government. The survey was conducted using the CATI (Computer-assisted Telephone Interviewing).

The study was supported by the Think Tank Development Initiative for Ukraine, implemented by the International Renaissance Foundation in partnership with the Open Society Initiative for Europe (OSIFE) with the financial support of the Swedish Embassy in Ukraine.