Building a gender inclusive economy: Case of Iceland..

Katrin Jakobsdóttir, Prime Minister of Iceland has an interesting article in IMF’s F&D (Mar-2019 theme is Women and Growth).

She writes on how Iceland has tried to make women participate in their workforce:

There is a striking difference between women’s labor participation in countries where childcare is available and affordable, and in countries where women are forced to choose between family and career. Where the costs of childcare are high, mothers in lower-income groups cannot afford to work. To be sure, a cultural shift could enable families to turn away from the traditional male breadwinner model. But the gender pay gap will continue pushing men into work while keeping women at home. And as long as our societies are constructed in such a way that women need to take long breaks from work to care for their families, this pay gap will remain as persistent as ever.

In recent decades, the Nordic countries have developed shared parental leave schemes that offer a specific “use-it-or-lose-it” portion for both parents (including same-sex couples and adoptive parents).

The Icelandic model—funded by government and businesses—offers three months of leave to each parent and an additional three months that can be divided between the parents however they choose. My government will extend this entitlement further. This is part of a broader effort aimed at closing the gap between parental leave and publicly funded, high-quality day care now starting at the age of two, a gap that is now mostly covered by subsidized childminders.

The current model has been implemented in stages since 2000 and has—along with universal childcare—transformed Icelandic society while simultaneously boosting the economy. A shift in mind-set has occurred: families now consider parental duties and care the equal responsibility of both parents. Fathers have formed better relationships with their children, and the old excuse that women cannot be hired or promoted because they will (all!) drop out of the labor market no longer holds water. On a personal note, I would not be both a prime minister and a mother to three wonderful boys if not for my country’s family-friendly policies.

Does this mean Iceland is the model to follow? Not really as long way to go:

Does this mean that Iceland has cracked the code and that everybody enjoys equal rights and opportunities? Unfortunately, it does not. The gender pay gap still exists, and jobs typically held by women are still undervalued and underpaid in a labor market that remains far too gender-segregated. We have not managed to eradicate violence and harassment, and our children are subjected to gender stereotypes just as children are everywhere in the world. But we have made progress. Women’s labor force participation is around 80 percent, or a bit below men’s 87 percent, and yet it still roughly matches the Organisation for Economic Co-operation and Development average for men. The extensive economic activity of all genders is one of the key ingredients in Iceland’s economy, where the unemployment rate is remarkably low at only 2.9 percent.

That is humility for you.

It is interesting to note how some of these small countries have women as leaders who have something interesting and different to say.

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