FYR MACEDONIA PROMOTING WOMEN’S ACCESS TO ECONOMIC OPPORTUNITIES Policy Note Key Messages Prospects for faster, more sustainable economic growth and higher living standards in FYR Macedonia rely on increasing employment opportunities for all. By maintaining the current structure of labor participation, FYR Macedonia is not capitalizing on its educated young population, as only 39 percent of 15–64-year-old women are actively contributing to the economy through employment. Closing gender gaps in access to economic opportunities requires removing the existing barriers and disincentives to employment and entrepreneurship for women. Needed steps include: (i) improving access to assets and productive inputs, (ii) providing access to child- and eldercare, (iii) eliminating disincentives and barriers embedded in labor taxation and regulation, and (iv) increasing the employability of women through effective active labor market policies and adequate skills and training. Cross-cutting policies around social norms and discrimination, better access to information, and improved monitoring and evaluation systems are also important. This Policy Note was produced in 2017 by the World Bank to summarize the relevant policy areas in tackling gender gaps in access to economic opportunities in FYR Macedonia. It was prepared by a World Bank team from the Poverty and Equity Global Practice unit that included Paola Buitrago, Maria E. Dávalos, Ana Maria Munoz Boudet, and Lourdes Rodriguez. Context entrepreneurship, as only 26 percent of firms have a woman as manager and only 16 percent are owned by women, 1 figures that are, however, higher than the FYR Macedonia has made progress in promoting regional average. Fewer women decide to start a equity between men and women, but gaps remain, business than men (12 percent of women and 19.7 particularly in access to economic opportunities. percent of men), but success rates do not differ Observed gender gaps in employment (18 percentage according to the gender of the entrepreneur. 2 points among 15–64-year-olds) are driven by gaps in labor force participation (26 percentage points in 2015) For those in the labor market, unemployment rates are namely, the low participation rate of women, which, at similar for men and women. However, there is a gender 51 percent, is 14 percentage points lower than the wage gap of around 18 percent even after controlling European Union (EU) average. This gap persists for such characteristics as education and experience throughout the life cycle (figure 1) and is significant and even though the share of women with tertiary compared to other Europe and Central Asia (ECA) education is higher than that of men (28 compared to countries (figure 2). Gaps are also observed in 16 percent). Segregation in fields of study—young 1 European Bank for Reconstruction and Development, Business 2 World Bank (2013a). Environment and Enterprise Performance Survey (BEEPS), 2013. women tend to concentrate more on certain areas such country’s future economic growth potential. In fact, for as health, education, and humanities and arts—also FYR Macedonia, differences in labor market activity influences their labor market prospects. rates between men and women amount to potential economic losses in gross income per capita of around Among ethnic minorities, gender gaps exist even in 15 percent. 4 outcomes for which the country has achieved some measure of equality on average, such as education. For Addressing the Challenges to Gender instance, one survey reveals that Roma women have around 5.1 years of education, half that of non-Roma Equality women. Similarly, unemployment is estimated to be twice as high among the Roma and significantly higher Closing gender gaps in access to economic among Roma women than among the non-Roma opportunities requires removing the barriers and population. 3 disincentives to employment and entrepreneurship that women face. A number of steps are needed to Figure 1. Labor Force Participation by Gender and Age ensure progress in this area, including improved access Groups, 2015 to assets and inputs, better access to child- and eldercare, fairer labor taxation and regulation policies, 100 and enhanced labor market skills and training. In Labor force participation, percent addition, prevalent gendered social norms and 80 attitudes among both men and women5 must be 60 addressed. 40 20 Access to Productive Inputs 0 The lack of access to productive inputs such as land or credit constrains women’s economic opportunities, particularly as entrepreneurs. Age groups Recent data reveal that women’s participation in Men Women property ownership is very low in FYR Macedonia. Most Source: Authors, using Labour Force Survey (LFS), 2015. properties—83.4 percent—are owned by men, a figure that is roughly five times higher than the percentage of Of particular concern is the high rate of FYR female property owners (16.6 percent). 6 Property is Macedonia’s young people who are not in employment, usually registered in the name of the husband or education, or training (NEET) (26 percent, more than another male relative, particularly in rural areas. 7 double the EU average). This labor market detachment, more prevalent among women, delays or prevents the Although the law protects women’s right to property accumulation of valuable on-the-job skills. Since these ownership in FYR Macedonia, prevailing discriminatory “scarring effects” from unemployment and periods of traditions and social norms undermine this and other inactivity often translate into lower productivity and basic rights, especially for women in rural areas. human capital accumulation later in life, women can Moreover, women often lack information about their find their prospects for upward economic mobility rights and the services to use for guidance and substantially impaired, which in turn affects the information. 3 UNDP, World Bank, and EC (2011). 7 World Bank (2012), using the Organisation for Economic Co- 4 Cuberes and Teignier (2015). operation and Development (OECD) Social Institutions and Gender 5 Mojsoska-Blazeski, Petreski, and Ayhan (2017). Index (SIGI), http://genderindex.org/country/macedonia-fyr. 6 FAO and World Bank (2014). Figure 2. Labor Force Participation Rate (population ages 15–64) Sources: World Bank, “World Development Indicators 2016” (World Bank, Washington, DC: 2017); Data for Kosovo from 2014 LFS. situation” and “bribes and protection payments are too Women therefore face obstacles not only in using land expensive” as the main factors. 10 or other property to develop a business but also in accessing financial markets due to the absence of Access to Child- and Eldercare collateral. It is significant that among property owners, there is a smaller gender gap in the use of that property Another fundamental barrier to women’s economic as collateral (12 percent), suggesting that the main participation is the usually competing demand on their barrier is property ownership. Moreover, evidence time to care for family members. This generates a shows that women face obstacles when they attempt vicious circle of low labor market attachment and to benefit from incentives to use agricultural land more prominence in the care provider role that leads to productively.8 women’s increased economic vulnerability and other gender-based inequalities. Women spend three times In terms of access to finance, gender gaps are small or more hours per day on domestic activities than men, not observed in the share of men and women who impeding their ability to spend more hours in attempt to borrow money to start a business (low for employment outside the home. 11 both sexes), in the success rates for obtaining a loan, or in the source of financing. 9 However, both men and Low enrollment rates in preschool education in FYR women report the lack of capital as the main reason for Macedonia reflect limited working time for parents, failure in setting up a business. Men, however, are more particularly women. The net enrollment rate in likely to report the absence of “enough capital,” while preschool has been increasing, but the rate for pre- women more frequently cite “changes in the personal primary (children aged 3–6) remains lower than the ECA 8 CRPM (2012). were able to obtain a loan. World Bank (2013), using the World 9 With regard to access to credit, the share of women who attempt Bank’s 2010 Life in Transition Survey (LiTS). to borrow money to start a business is low but similar to that of men 10 World Bank (2013a). (approximately 41 percent of men and 38 percent of women). 11 Data from: Republic of Macedonia, State Statistical Office, “Time Among that group, 75 percent of women and 71 percent of men Use in the Republic of Macedonia, 2014/15” (Skopje: FYR Macedonia State Statistical Office, 2015). regional average. 12 Approximately 41 percent of Labor Taxation and Regulations women—but only 1.3 percent of men—who do not participate in the labor force cite “personal and family Labor taxation policies and regulations also affect obligations” as their primary reason for not looking for women’s incentives to work and firms’ incentives to a job. 13 hire them. 15 Three main messages emerge from a recent World Bank The structure of labor taxation, in combination with the assessment of the supply of and demand for formal design of social benefits, can lead to disincentives to child- and eldercare in FYR Macedonia: work. In FYR Macedonia, as in other countries in the region, part-time and low-wage earners face higher 1. Childcare: The relatively low utilization of formal effective tax rates than average wage earners. 16 As childcare services is driven by the limited availability of women are more likely to be overrepresented in these affordable services. Evidence shows that there is an groups, this could result in disincentives among women unfulfilled demand for formal childcare services, to seek work or among employers to hire women. predominantly from parents who see a benefit for their child’s development and from mothers who are already Moreover, certain regulations disproportionately affect working or willing to work outside the home. women’s employment, including in such areas as flexible work arrangements and family leave provisions. 2. Eldercare: The supply of eldercare is characterized by In FYR Macedonia, only about 8 percent of workers are a lack of day-based services and the limited number employed part-time. and expense of residential care centers. Social norms are a strong deterrent to the use of residential The design of family leave provisions, especially eldercare, suggesting that the use of daycare centers maternity leave, might also increase employers’ and home-based formats—if they were available— disincentives to hire women. There is no international would be more compatible with prevailing standards. standard for the design of family leave policies, with different approaches based on length, portion paid and 3. Quality is important to potential users of formal care unpaid, level of wage replacement, and source of services. Although FYR Macedonia scores high in terms funding. Initial exploration reveals that the length of of the quality of its existing childcare facilities, that is paid maternity leave in FYR Macedonia—the main paid not the case with regard to eldercare, where there are leave available for parents—is high (270 calendar days) challenges across the board, particularly in compared to both global and regional averages (more infrastructure and safety features. than double the global average) and to averages in countries with similar income levels. When adjusting The rising demand for formal care services and the length of maternity leave by wage replacement (at relatively progressive views about their use in FYR a 100 percent in FYR Macedonia), it remains one of the Macedonia provide an opportunity for the highest in the region. 17 As the government fully bears development of a formal care industry that could this direct cost of family leave through its budget, the increase labor force participation, firm productivity, leave program likely results in fewer disincentives than and jobs. 14 employer-financed leave. Nevertheless, employers likely bear indirect costs that may be significant given the length of maternity leave, including the time and financial resources invested in hiring and training staff to replace women on leave. 12 World Bank (2013a), using State Statistical Office, “Time Use in 15 Arias et al. (2014). the Republic of Macedonia,” and World Development Indicators. 16 Ibid. 13 World Bank (2013a). 17 World Bank, “Women, Business and the Law” (database), 2016, 14 IFC (2017); Kim, Ilkkaracan, and Kaya (2017). http://wbl.worldbank.org. Other aspects of labor regulations may result in gender gaps in access to land. Promoting gender equality in discrimination if there is no legal foundation to prevent property rights entails, for example, that the Law on it. For instance, the law in FYR Macedonia does not Family be amended to directly register as joint property explicitly mandate equal remuneration for work of any assets acquired in marriage and to require spousal equal value, as do laws in other countries in the consent for any transaction involving matrimonial region. 18 property. Addressing the current gender gaps in access to Policy Options to Promote Women’s property will also improve women’s access to finance and entrepreneurship, as they often lack the collateral Access to Economic Opportunities to obtain credit. Nevertheless, programs aimed at providing credit to women who do not own property Available policy options to tackle the kinds of can help to eliminate obstacles in accessing finance for inequalities outlined above include: (i) improving access the majority of women who are not represented in to assets and productive inputs, (ii) providing access to property titles. The recent European Commission child- and eldercare, (iii) removing disincentives and report (EC 2016) for FYR Macedonia emphasized that barriers embedded in labor taxation laws and the country should adopt a strategy promoting regulations, and (iv) increasing the employability of women's entrepreneurship. women through effective active labor market policies and adequate skills and training. Access to formal child- and eldercare. International evidence shows that the availability of affordable Institutions for gender equality. FYR Macedonia childcare is positively correlated with both female labor presented its proposals in the 2013–2020 Gender force participation and fertility. 20 At the same time, Equality Strategy, accompanied by an action plan. In robust evidence in both developing and developed June 2016, it adopted a 2016–2020 Strategy for Equality countries demonstrates that investing in early and Non-Discrimination. However, the success of these childhood education has a significant impact on efforts calls for greater support for the Gender Equality children’s development and their long-term labor and Unit (currently under the Ministry of Labor) to enable it income outcomes. Affordable childcare lessens to coordinate, monitor, and evaluate the commitments women’s home-care burden and also increases the aimed at closing the gender gaps. Positioning the Unit opportunity cost of leaving the labor force. under the prime minister’s office may contribute to strengthening its reach and effectiveness. Policy options for FYR Macedonia to explore include: expanding publicly provided childcare centers; Beyond setting up the institutional framework, there implementing public subsidies to private childcare are several policy areas outlined below that are relevant provision and use; creating education and accreditation to strengthening efforts to achieve women’s equal programs to prepare caregivers and care- access to economic opportunities. They do not entrepreneurs; developing a system and plan to represent a comprehensive list but instead point to increase the quality of services with attention to costs, several issues on which it would be useful to focus. particularly the provision of quality eldercare; and revising the legal framework to be adaptable to the Access to productive inputs. FYR Macedonia’s existing demands and expectations of care. The fiscal legal framework for access to land and property can be implications of the various approaches to promoting further improved. A recent legal assessment 19 provides access to child- and eldercare also need to be a detailed review of the current framework and puts considered. forward recommendations on ways to close the gender 18 Ibid. 20 Mateo and Rodriguez-Chamussy (2016). 19 GIZ and FAO (2016). Labor taxation and regulations. It is key to ensure that survey implemented in FYR Macedonia are being labor taxation laws and regulations do not explicitly or analyzed to assess whether employers find gaps implicitly penalize women’s access to jobs. This includes between women and men in technical and socio- revisiting potential disincentives to work for part-time emotional skills (e.g., learning computer skills, adapting and low-wage earners embedded in the current to new tasks, working in difficult situations, providing taxation (and social protection) systems, as well as reliability) and to shed light on other gender-related improvements to the labor code to reduce considerations when hiring. 26 Gender differences in discrimination. Areas to focus on include (i) further employers’ views would likely make it more difficult for facilitating flexible work arrangements, such as part- women to find a (good) job or build on-the-job skills time work, that allow men and women to combine work with the same success as their male counterparts. with family responsibilities; and (ii) ensuring that Nevertheless, relevant policy options to expand gender equality monitoring mechanisms are in place to women’s opportunities, beyond overall policies to enforce legal protections and avoid discrimination at improve the relevance and quality of education and work on the grounds of sex, gender, pregnancy, family, training programs, should include vocational training and marital status, for example, by further building on for women with low education levels, apprenticeship the advancement of labor inspection work. 21 Finally, programs in growing areas of the economy, and more increasing the length of paternity leave or giving training in non-traditional sectors. additional incentives to fathers can help more evenly balance child care responsibilities between men and Cross-cutting policies areas women and contribute to leveling the playing field in the labor market. Social norms and discrimination. Policies are needed to rebalance household and family responsibilities Active labor market policies and adequate skills and between men and women and to remove barriers for training. There is still room to increase the coverage, women stemming from prevailing social norms that efficiency, and effectiveness of active labor market limit their opportunities, even where the legal policies for men and women, 22 not only for the framework is in place, as it is in FYR Macedonia. Focus unemployed but also for those whose status is inactive group discussions emphasize these challenges: “It is (neither working nor unemployed). The European difficult to be a successful woman. There are much more Commission report for FYR Macedonia calls for the requirements for women. She has to look beautiful, (…) need to “strengthen the provision of activation and they also have to prepare the kids, to go to work, to measures especially for vulnerable youth, women and take kids from school, to cook, to have all the things long-term unemployed and further improve the done…,” said a female employer. Moreover, interviews capacity of the Employment Service Agency for profiling with officials from employment agencies indicated an and personalised counselling of job seekers.” 23 awareness of many instances of discrimination in hiring in which employers ask women about their family Moreover, finding a good job or succeeding as an status and plans. One employment agency official said: entrepreneur will be possible only if women have the “It is a fact that part of our clients were asked about this skills that can complement job creation in the economy. during their job interview. This concerns women A report using the World Bank’s STEP survey 24 finds that especially, because they are asked about their future the skills mismatch is an important problem for the plans concerning birth and whether plan to give birth to country, as the lack of adequate skills is an obstacle to one or two children.” 27 growth for many firms. 25 Data from the STEP Employer 21 World Bank (2013b). 25 World Bank (2017). 22 EC (2016). 26 Cojocaru (2017) 23 Ibid., 28. 27 Dávalos et al. (2016). 24 This refers to the Skills Towards Employability and Productivity (STEP) Skills Measurement Program. Therefore, it is key to: information gaps. Beyond labor market–relevant information, provision of training and information to (i) Promote policies that foster co-responsibility women about, for example, their rights and the between men and women, including promoting and procedures in property registration and inheritance can monitoring the use of paternity benefits. Policy efforts help close the implementation gap. to increase the availability of child- and eldercare will also help. Monitoring and evaluation. Improved monitoring and evaluation (M&E) systems are essential to closing (ii) Provide public policy incentives that promote gender gaps in access to economic opportunities. M&E women’s access to economic opportunities. This may systems allow policy makers to identify areas where include offering incentives to hire and train women in policy efforts should be increased or adjusted, as well non-traditional sectors; increasing employer awareness as areas of progress. They also promote the availability when hiring through, for example, gender certification and use of gender-disaggregated information in programs or behavioral interventions to address relevant administrative and survey data, such as that employers’ gender biases in the hiring process; and from property registration and active labor market providing information, training, and incentives for programs. Line ministries, alongside the State Statistical public servants and service providers working in Office, are key contributors to ensuring the production relevant institutions (e.g., in cadaster offices with and monitoring of quality and timely gender- regard to women’s property rights). disaggregated data across topics and sectors. (iii) Influence aspirations and expectations through, for How Can the World Bank Group example: programs based on role models and mentoring; media interventions (e.g., television, Help? campaigns, radio), to expose people to information and role models; or by the dissemination of information on Over the past several years, the World Bank has aimed increased job opportunities for women. at building an evidence base to inform the gender equality agenda in FYR Macedonia, particularly with Access to information. As part of efforts to increase the regard gender gaps in access to economic employability of the population, it is important to opportunities. This has included a Gender Assessment 29 provide information to young men and women that of the country; an analysis of child- and eldercare; an could influence their schooling and school-to-work analysis of the economic impact of gender gaps in the transition decisions (e.g., information on the labor labor market; 30 a mapping of programs aimed at market and returns to education), which can also be improving women’s access to economic opportunities; critical in shifting social norms that push women into a pilot intervention on socio-emotional skills with a certain fields of study or occupations. Evidence for the gender component (with the Ministry of Education of region emphasizes the importance of accessing FYR Macedonia), and a review of potential policies to information and networks that can facilitate the close the gender gaps. 31 transition to the labor market. 28 This entails strengthening labor market information systems and Based on this solid evidence, the World Bank is ready to career guidance services, including through the continue to support the Government of FYR Macedonia education system and in public employment offices. in addressing the challenges that impede women’s This can contribute to addressing the stereotypes that equal access to economic opportunities, which can, as often start early in primary and secondary education a result, lower the country’s growth prospects. 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