Prime Minister, Ministers, distinguished guests — Anyoung haseyo. It is my honor to address the International Conference on Women’s Empowerment in Financial Services.
Thank you — Sang-Kyung Kim and the Korean Network of Women in Finance — for your warm welcome. Your goal to promote gender diversity in the financial sector is critical.
我感谢Sang-Kyung Kim 和韩国金融界女性网的热烈欢迎。你们在金融业促进性别多样化的目标至关重要。
Indeed, empowering women is not just the right moral choice; it is also the right macroeconomic choice. That is why many of us care — including the IMF. Helping women participate in the economy boosts growth, diversifies economies, reduces income inequality, and mitigates demographic change.
These factors are relevant across the globe — but especially here in Korea.
Think, in particular, about growth. For the last five years, the working-age population increased by 200,000 every year, boosting growth by 0.7 percentage points. Over the next five years, the workforce will shrink by 100,000 a year, subtracting 0.2 percentage points from growth. Enabling more women to work can dramatically alleviate the adverse effects of demographic change.
There has never been a more critical time for Korea to invest in women. This challenge is the focus of my remarks.
First, despite progress, further actions are needed — by government and society — to help women participate in the economy;
Second, from the corporate perspective, more ambitious steps are required to harness the substantial dividends from having more women in senior positions.
1. Empowering Women in Korea’s Economy
Let me start with Korea’s progress. The proportion of women in the workforce — the female labor force participation rate — has increased from 46 percent in 1980 to 58 percent in 2016. Between 1990 and 2010, the share of women in regular jobs rose from 20 to 40 percent.
On the global stage, many Korean women are shining — figure-skaters; musicians; golfers like Park Sung-hyun, recent champion of the U.S. Women’s Open.
Yet, Korea still has one of the lowest rates of female labor force participation in the OECD — 20 percentage points below the best performers. Women are paid about 37 percent less than men. Females take up just 2 percent of senior management positions — compared to the OECD average of 20 percent.
With many women leaving the workforce in their 30s to have families, they typically miss a decade or more of prime working life. Re-entering the workforce is a challenge. For those who do, opportunities can be limited. Many take non-regular jobs, or never reach the next rung on the career ladder.
The good news is that steps are being taken to remove these barriers. As the Korean proverb goes: "Beginning is half the task."
Korea has had legally-compulsory gender budgeting for over a decade. It is one of only a few countries that collect and analyze gender-disaggregated data to assess the effectiveness of its approach.
Building on this, parental leave provisions have been expanded, and investments made in childcare. Steps have been taken to help mothers return to work after an absence, alongside efforts to make workplaces more family-friendly. These priorities have been part of the IMF’s discussions with the government for several years.
Most recently, President Moon has honored his pledge for women to take up 30 percent of his Cabinet. The government is planning other crucial steps. These include making 175 employment centers available to women seeking work, and letting mothers work reduced hours for an extended period.
Further efforts are needed, including to strengthen childcare, flexible working, and job search and training support. These can pay big dividends.
An IMF study looked at the potential impact of reforming secondary earner taxation, increasing childcare benefits, and boosting tax incentives for part-time work. It estimated that these reforms could help increase female labor force participation by 8 percentage points over the medium term — reducing the gap between male and female participation by one-third.
I also know the importance of family-friendly working practices from my own personal experience.
I was about to be made partner international law firm Baker McKenzie when I became a new mother. To care for my son, I changed my working hours, and took Wednesday afternoons off. This did not resonate well with some male partners — but I was determined to do it. Still, it delayed my conversion to partner by a year.
Indeed, as much as can be achieved through policies, it is critical to address social norms that inhibit women.
There are even areas where progress can be made not only without undermining cultural identities — but by affirming them. Consider your national flag. The Yin-Yang circle in the middle of Taegukgi symbolizes that achieving harmony requires both women and men to play their part.
Think, first, of the mothers. Amy Chua’s book, Battle Hymn of the Tiger Mother, prompted some heated debate, but an underlying observation resonates. That is the amount of time spent by mothers to educate their children at home, often at the expense of paid employment. Improving public education can support changing social attitudes to help more women combine family and work.
Women’s attitudes themselves are shifting. The percentage of Korean women wanting to keep their jobs regardless of marriage and childbirth increased from 17 percent in 1988 to 56 percent by 2009.
Moreover, one concern that has been raised about having more women in the workforce is that it could reduce fertility — which would hinder efforts to address demographic change.
Such concerns are misplaced. Nordic countries have shown that high female labor force participation and fertility can go hand-in-hand if aided by supportive policies.
Another country facing demographic change — Japan — has shown that the likelihood of having a second child increases if men are more active in the household.
This brings me to the role of fathers. Despite progress, take-up of paternity leave only recently exceeded 5 percent. Many fathers do not take it because they fear ramifications at work.
Consider the experience of this 34-year old father:
"If I hadn’t taken leave", he said, "I would have been up for promotion. But I was bypassed. I expect to be at a disadvantage in pay and promotion."
If men are to play a more active role in family life, corporate culture needs to change. It also needs to change for the sake of women, which brings me to my second point — how to empower women to lead in the corporate sector.