Modifications in Childcare Policy Necessary for Women Economic Empowerment

LightCastle Analytics Wing
June 15, 2020
Modifications in Childcare Policy Necessary for Women Economic Empowerment

Bangladesh ranks 50 in the 2020 Global Gender Gap Index and occupies the highest position amongst all South Asian countries. [1]

The Global Gender Gap Index measures the width of gender-based gaps in 4 parameters: Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment.

153 countries are ranked on a scale of decreasing gender parity, based on progress in ending gender parity in the following sectors: health, education, economy, and politics. 

Whilst this was a point of celebration at first glance, it must be stated that Bangladesh’s high rankings, compared to that of other South Asian nations, are primarily purported by a stellar performance in Political Empowerment.

In fact, it is the only country where women’s tenure at the helm of the state has exceeded that of men over the past 50 years.

Bangladesh’s appalling rankings in other dimensions—economic participation (141), educational attainment (120), and health (119)—signal thorough policy modification for such areas. 

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In fact, a comparison of Bangladesh’s scores from 2006 shows a decline in all three categories, except political empowerment.

Economic participation has encountered the steepest decline; Bangladesh was ranked 107 in 2006 compared to its ranking of 141 in 2020.

The different parameters of female economic participation, such as labor force participation rates, wage equality for similar growth, estimated earned income, percentage of professional and technical workers, etc., clearly demonstrate room for improvement. For example, female labor force participation was recorded at 36% in 2017, compared to 83% for males.

Although female labor force participation rates have improved over the last 20 years (it was 23.9% in 2000), the momentum of growth has stagnated over the past 5 years. 

Bangladesh Country Score Card for Economic Participation and Opportunity
Figure 1: Bangladesh Country Score Card for Economic Participation and Opportunity, Source: World Economic Forum [1]
Labor Force Participation Rates in Bangladesh by Gender
Figure 2: Labor Force Participation Rates in Bangladesh by Gender, Source: Bangladesh Bureau of Statistics 

The obstacles to female economic participation are not solely limited to labor force participation rates. The estimated earned income for women (international $) is less than half than that of men.

Analyses of wage data from the United Nations 2020 World Economic Situation Prospects report shows that Bangladesh has a positive gender gap (women earned 4.7% more in 2018) in hourly wages but a negative gender gap in monthly wages (men earn 2.2% more in 2018). [2]

Lack of full-time, continuous employment could possibly culminate in lower monthly, and consequently annual wages, for women in Bangladesh. 

Factor-Weighted Mean Gender Pay Gaps using Hourly and Monthly Wages
Figure 3: Factor-Weighted Mean Gender Pay Gaps using Hourly and Monthly Wages, Source: World Economic Forum, Global Gender Gap Report 2020[1]

The need to support women’s entry into and success in the formal workforce is demonstrated by the high percentage of women involved in informal employment. Data from the 2016–17 Labor Force Survey shows that almost 92% of the employed female population, aged 18 or older, is involved in informal employment. This signals the presence of a complex network of obstacles spanning policy, societal, and structural deficiencies that are leading to abysmal female economic participation. 

Percentage Distribution of Informal Employment by Gender and Area
Figure 3: Percentage Distribution of Informal Employment by Gender and Area, Source: Labour Force Survey (LFS) 2016–17, Bangladesh Bureau of Statistics (BBS)

Women Spend a Greater Proportion of Time on Unpaid Childcare

The solution to gender disparity is multifold and requires sophisticated reforms in multiple areas of the socio-economic ecosystem. Like women across the globe, women in Bangladesh spend a greater proportion of time on unpaid childcare and domestic duties than their male counterparts.

A recent Bangladesh-based World Bank study reveals that the disproportionate burden of unpaid domestic work and childcare borne by women is a key obstruction to improving the female labor force outlook. [3]

The study analyzes data from 1,300 urban households in low-income areas of Dhaka City as part of Dhaka’s low-Income area GeNder, Inclusion, and poverTY (DIGNITY) survey. Results from analyses show that on average, women spend 5.16 hours per day on childcare and domestic work, whereas men spend 0.34 hours per day on the same activities.

Subsequently, the analyses also reveal that women, on average, spend four hours per day on employment-related activities, while men spend 10 hours per day on the same activities. Women in the study, therefore, deviate the time required for employment-related activities to unpaid childcare and domestic chores. The data offers insight into the extent to which women miss out on opportunities to enter and thrive in the workforce. 

It should come as no surprise that reducing women’s burden of unpaid childcare will alleviate gender disparity in wage and employment rates and facilitate opportunities for women to participate in continuous, formal employment instead of sporadic, informal employment.

Provision of affordable, high-quality daycare centers requires both sound policy implementation and dynamic cultural changes. Common cultural practice dictates primary reliance on the mother, followed by secondary reliance on childcare. Almost 30% of the women interviewed in the DIGNITY study abided by the secondary reliance practice.

In the same survey, only 1% of working women interviewed reported using formal arrangements. The statistics strongly indicate that lack of access to formal childcare arrangements is pervasive in Bangladeshi society. 

Current Status of Childcare in Bangladesh

Considering the evidence demonstrating the adverse effects of the lack of formal daycare arrangements, the Bangladesh Labor Law has included a provision for childcare for female employees only.

The Bangladesh Labour Act of 2006, sec. 94, states, “In every establishment, where 40 (forty) or more female workers are ordinarily employed, one or more suitable rooms shall be provided and maintained for the use of their children who are under the age of 6 (six) years. These rooms will provide adequate accommodation, must have adequate lighting, be ventilated and maintained in a clean and sanitary condition, and will be under the charge of women trained or experienced in childcare.”

The law also includes provisions governing the working hours of female workers, maternity leave, pregnancy, welfare benefits, etc. [4]

However, despite the presence of a law mandating childcare provision for female employees, the provision of such solutions is less than ideal.

LightCastle Partners’ internal research for IFC’s Project Tackling Childcare surveyed 306 Dhaka-based companies with 40+ female employees to assess the status of employer-supported childcare in 2019. [5]

The analyses state that 23% of 306 such companies provide childcare solutions to their employees, 16% are planning on providing solutions, and 61% are not planning on providing solutions. The lack of employer-supported childcare solutions is more of a supply-side barrier, as most employees interviewed in the study expressed the need for good-quality, affordable childcare.

Furthermore, almost half the employers interviewed in the study were moderately familiar with the childcare requirement in the Bangladesh Labor Act of 2006. Therefore, there must be severe obstacles hindering the implementation of childcare provisions from the employer’s side. 

The supply-side obstacle hypothesis has been, in fact, deemed true by LightCastle’s analyses. Companies who have yet to provide childcare solutions, find the cost and technical challenges in planning and implementing such solutions to be critical barricades.

About 36% of the employers that are not providing childcare solutions reported the cost of building a daycare center to be a primary financial roadblock. About one-third of the companies in the same category have stated the lack of clarity on safety standards to be a central legal obstacle. 

The demand-supply mismatch of employer-supported childcare provisions is disheartening. However, there are patent benefits to conquering this problem.

LightCastle’s study shows that 23% of the employers surveyed who provide childcare solutions have reported positive impacts in the following areas; Organizational Profitability, Women’s Career Advancement, Talent Acquisition, Branding as Employer of Choice, Employee Productivity, Retention, Workplace Culture, and Improved Morale. These benefits can be enjoyed by more women, families, and employers, given the implementation of astute policy reforms. 

Critical Policy Reforms

The clear demand for childcare provisions from employees and demonstrated benefits of such provisions to the labor force, and the collective society, indicate urgent changes to social and economic policy. Policy must be modified to encourage both employers and state-supported childcare as well as public-private partnerships to augment the benefits of all childcare provisions.  

First and foremost, there must be a proper assessment system to measure the specific demand for the different types of childcare solutions. LightCastle’s internal research shows that white-collar workers demand sophisticated early childhood education at daycare centers, whereas blue-collar workers prioritize nutritious food and basic schooling.

After rigorous assessment, strong networks must be established between the public and private sectors to implement such childcare solutions. IFC’s Tackling Childcare Bangladesh recommends implementing small-scale, customized solutions and measuring the results of the solution before nationwide expansion.[5]

The solutions must be implemented with a multilateral approach. Policymakers must consider the various aspects of childcare solutions such as early childhood education, quality of care, training of caregivers, etc.

The demand for and enrollment in daycare centers are highly dependent on trust, and consequently, the quality of caregivers and safety standards. This requires an iterative process of monitoring, evaluation, and appropriate rectification. 

The involvement of early childhood education experts and industry professionals (e.g., healthcare providers, architects specializing in daycare design, etc.) will facilitate the planning and implementation process.

Dynamic financing will also be critical to the success of the process. Bangladesh could follow successful examples of state intervention for childcare solutions from countries like Singapore (E.g., Childcare and Infant Subsidy from ECDA). [6] Given the sensitive nature of policy implementations in this area, reforms must be designed in a detail-oriented manner. 

Strong involvement in multiple areas, such as demand assessment, industry involvement, financing, etc., must be matched by innovation in the public sector. LightCastle’s internal research reveals demand from employees for modifications to the childcare provision of the Bangladesh Labor Act, such as making the law gender-neutral, reducing the threshold of employees required to provide childcare solutions, etc.

A multidimensional approach will, therefore, maximize the returns on investment in childcare solutions and mitigate Bangladesh’s drab performance in female economic empowerment. 


WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a systemic and data-driven approach to create opportunities for growth and impact. We are an international management consulting firm which creates systemic and data-driven opportunities for growth and impact in emerging markets. By collaborating with development partners and leveraging the power of the private sector, we strive to boost economies, inspire businesses, and change lives at scale.

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