Free economies help women


Free economies help women

Jul 26, 2006 2 min read

Senior Associate Fellow

Free economies vastly outperform those that are more repressed, research has long shown. But do free economic policies help women in particular? A careful look of the evidence reveals that not only do woman benefit from free economic policies, they benefit more, proportionally, than men.

Consider women's economic and political empowerment. Researchers at the United Nations' Human Development Report staff compared the empowerment of women to that of men, combining three measures -- power over economic resources; political participation and decision-making; and economic participation and decision-making -- to develop a "gender-empowerment" score.

The numerical value for woman's empowerment is .751 for free economies, which means they command about three-fourths the resources of men. That number drops to .563 for mostly free economies, to .430 for mostly unfree economies and to .379 for repressed. According to this measure, women fare a third better in free economies than in mostly free economies, and almost twice as well as those in repressed economies.

In short, the freer an economy, the more its women are empowered.

Statistics on women's standard of living reveal the same. In free economies, women earn more than $21,000 per capita, according to the U.N. study. Woman in mostly free economies earn an average of less than $8,200, and those in mostly unfree economies earn about $2,300. Women in free economies earn nine times what those in mostly unfree economies make.

The freedom of economies is measured in the "Index of Economic Freedom," published jointly each year by The Heritage Foundation and The Wall Street Journal. The Index rates 157 countries based on 50 variables categorized into 10 catch-all groups -- trade policy, fiscal burden of government, government intervention in the economy, monetary policy, capital flows and foreign investment, banking and finance, wages and prices, property rights, regulations and informal (or "black") market activity. These factors are then quantified and combined to produce a rating of each country's economic freedom, grouped into four different categories -- free, mostly free, mostly unfree and repressed.

Matching the Index findings against those of the United Nations, we find a strong correlation between economic freedom and women's prosperity. Of the 15 countries where women earn the highest per-capita income, 12 are in the "free" category in the Index. Of the 50 freest economies, only five did not also make the top 50 in women's earnings.

Moreover, in free economies, women earn, on average, 57.1 percent as much as men ($21,017 for women; $36,793 for men). In mostly free economies, women's earnings average 51.4 percent that of men; in mostly unfree economies, the figure falls to 44.2 percent.

Also according to the Index, men in countries with mostly free economies earn 302 percent what those in mostly unfree economies earn. Meanwhile, women in mostly free economies earn 351 percent what those in mostly unfree economies earn.

Moreover, men in free economies earn more than twice what men in mostly free economies earn, but women in free economies average two-and-a-half times the earnings of those in mostly free economies.

Women also play a bigger role in the political and decision-making process in freer countries. In mostly unfree countries, women held 14 percent of seats in the upper legislative bodies and 13 percent in the lower bodies, compared to 19 percent and 15 percent in mostly free countries and 22 percent and 26 percent in free countries.

All of which is to say that men should be pushing for free economic policies because they expand opportunity, build prosperity and promote stability. But given the gains that women enjoy in freer economies, they should be pushing even harder.

Andrew Berman is a senior at Manhattanville College in Purchase, N.Y., and a summer intern at The Heritage Foundation.

First appeared in the McClatchy Tribune News Service