How cash transfers bring more women into the workforce

One of the biggest challenges women face globally is the extent to which the Covid-19 pandemic has impacted their ability to work. According to the International Labor Organization, women's workforce participation levels are still below pre-pandemic levels, whereas men's jobs have largely returned.

That was the subject of my recent conversation with philanthropist Melinda French Gates and Nobel-winning economist Esther Duflo, who shared their views on the best ways to empower women economically on the premiere episode of Season 2 of the Hidden Economics of Remarkable Women (HERO).

In this wide-ranging interview, they talked about what economic empowerment actually looks like for women, cash transfers, and how pandemic recovery has been implemented around the world. They also shared their personal reasons for working on these issues.

French Gates is the co-chair of the Bill & Melinda Gates Foundation, which supports this podcast. French Gates is also the founder of Pivotal Ventures and author of The Moment of Lift: How Empowering Women Changes the World.

Duflo is a professor at the Massachusetts Institute of Technology and won the Nobel Memorial Prize in Economic Sciences in 2019 for her experimental approach to alleviating global poverty. Duflo is the co-author of Good Economics for Hard Times and Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty.

The following conversation has been edited for length and clarity. If you want to hear the entire conversation, you can listen to the full HERO episode here or on your favorite podcast platform.

Implementing cash transfer programs that target women as part of Covid-19 relief could lift 100 million women out of poverty, according to the Eurasia Group. Melinda, what about the pushback that this concept of "you give a woman a fish, she eats for a day, you teach her how to fish, she eats for a lifetime" has received? Why are cash transfers different?

Melinda French Gates: Well, cash transfers, when they're targeted in the hands of women, women know what they need for their family — what type of food, what type of job they could create. They are very entrepreneurial. And so what we know is these cash transfer payments in women's hands actually lead to empowerment.

So what does empowerment look like? It feels like an amorphous term, but when you go out and talk to these women all over the world, they say, if it's in India, "My mother-in-law sees me differently when I have cash." "My son sees me differently when I have a little bit of cash, and I've created a business, and then eventually I can buy him a bike." "My husband sees me differently when I have cash." So what we know is that little bit of cash can start a woman on a path.

Esther Duflo: So if I can build up on that, there was a very interesting experiment in India, in Madhya Pradesh. There is a welfare program there, and the women and men work for it, but the money was kind of pooled together into a joint account.

And a group of researchers, they managed to really separate, make sure that the money gets separately awarded to the women or to the men. So the money that was given to the woman went into the woman's bank account in a way that was very well identified and linked, again, to their cell phone.

And what they found, which was really interesting, is that one of the main outcomes of this extra empowerment is women were actually seeking out other work because one of the things that women want to do is to work.

India is one of the countries in the world with the lowest labor force participation of women — lower even than Saudi Arabia, both due to the burden they have at home and due to social norms, to be honest. So when women get this extra cash on hand, what did they use the power that they brought with the mother-in-law, with the husband, etc. for? To get more work.

Melinda, what do you feel really works when it comes to getting female entrepreneurs and developing countries up and running and just a foothold on the ladder?

MFG: You have to look at the micro before you can get to the macro. You have to, at the micro setting, get into what the social norms are and how might you change them. Quite often, if you have a self-help group, a group of women banded together, they support one another.

If you can bring men into those conversations, I've seen amazing work done where men become part of the conversation and then it opens their eyes and they say, "Wait a minute, we can help solve this. There's no reason a woman can't go to the clinic earlier in the day. We can help transport them. We can help with the water."

So it's when men and women sit down collectively and start to realize and bring out on the table, "What are we doing? What do we believe? Oh, let's commit to changing that." And it's why I become so passionate about making sure that we both talk about women's stories and where we really are in the world.

We have to bring men into this conversation — they're the only ones who are going to help us change this, right? So we've got to work on both the micro and the macro and realize there are barriers that hold women back.

And yet when we do things, we empower them with loans, we empower them with knowledge, we pull men into the conversation to support them, we can actually change societies and change the world.

Esther, I want to ask you as well. Data is really your weapon in explaining what works in addressing poverty. And at least right now, we know inflation is on the rise. We know that inflation greatly affects the poor. What do you feel is needed right now in this moment that could make a difference?

ED: I think that the situation is very different in richer countries and in poorer countries. Rich countries during the pandemic spent about 22 to 23 percent of their GDP in fiscal stimulus measures and have successfully and largely protected their populations, the poorest in their populations, against the worst of the Covid-19 crisis from an economic point of view. Of course, not from a health point of view.

And sure, there is inflation, but there are also a lot of jobs around, and people are making money, and people don't like inflation. But at the end of the day now, the economic outlook in the United States is very good. And similarly, in Europe, actually.

So in poor countries, the story is a bit different or radically different. When rich countries spend 23 percent of their GDP on fiscal stimulus measures, a middle-income country spends 6 percent. The poorest countries spend 2 percent of a much smaller GDP, which means basically that they weren't able to protect their populations or their economies or entire systems from the Covid-19 crisis.

So what do we need to do now? We need to rebuild. And we can. We have done it once. It's not going to be instant. It's going to take a lot of ingenuity, a lot of effort, a lot of money, hopefully some amount of solidarity from the Western world.

Melinda, a few months ago, you told me that one of the last places you visited right before this pandemic was South Africa, just incredibly devastated by Covid-19. What's your biggest worry for countries around the world as women are trying to get a foothold and deal with issues at home but also generate an income? And what gives you the most hope?

MFG: I think what concerns me the most is exactly what Esther's talking about. It's what we call the economic scarring that happens in countries. And just as she said, the high-income countries were able to invest and put more into their social safety nets to hopefully get people back on their feet much more quickly.

You know, we should have learned a lesson after Ebola in 2014, where it affected basically four countries in West Africa. What we saw after that, what went through those countries, is that men's jobs came back but many of the women's jobs never came back. And that is devastating for those families and for those economies writ large.

So what can we do? Exactly what Esther said. Western countries have got to come together and use all their tools in their economic toolbox to make sure that we actually put money into these countries. We are a global community.

We do care about our fellow human beings. And we have global trade now. And so if we want to get a full and total economic recovery around the world, we need to help these countries get back on their feet.

Both of you have spent so much of your careers trying to uplift women who don't have much. I want to start with you, Melinda. Why is it that you're so passionate and spend so much time focused on parts of the world where others wouldn't even travel?

MFG: Well, first of all, I'm incredibly lucky that I can even travel, that I could even have child care at the time for my kids when I would go to places in Africa. But I think it's the connection. I have just met so many incredible people in country after country, in Africa, various places in Africa or in Bangladesh or in India.

And when you sit down and talk to men and women and talk to them about their hopes and their dreams, so often they're exactly the same hopes and dreams we have here in the United States or in the UK or in France, which is we want our children to be able to reach their full potential.

And when you're in a position as fortunate as I'm in, that I never expected to be in in life, you say, "Wow, if I can do a little something to contribute to that, that's what I want to do." And it certainly gives my life meaning, and those deep connections I've been able to make with people, they've changed my life probably even more than I will change theirs.

ED: I think it really starts with what Melinda said, which is, what if I had been born in other circumstances? So when I was a child, my mother was traveling. She's a doctor, a pediatrician. She was involved in an NGO of doctors helping children, victims of war.

So she was going places for some weeks at a time and would come back and tell us, "This is what you're doing for the world. You are allowing me to go." And then she would discuss these things with us. And from that age, I kept thinking, "I could have been born as any of these kids. I could have been the little girl who is walking 2 kilometers to get water."

And then from that time, around 8 or 9, I've been thinking, "What do I do to justify the incredible luck that I have to be born in an upper-middle-class family in France instead of a poor family in Congo? I haven't done anything to deserve that. And yet that happened, so I better do something to deserve it now." So I was always looking for what it was going to be.

Reena Ninan. Sketch: TBS

Reena Ninan is a journalist and founder of Good Trouble Productions.

Disclaimer: This article first appeared on Foreign Policy, and is published by special syndication arrangement.