Women matter in the workforce

By Lee Po-Chih 李博志  / 

Fri, Jan 18, 2019 - Page 8

In almost every country in the world, men tend to participate in job markets more than women. However, these gender differences in participation rates have lessened in recent decades.

Taiwan’s population in 1950 was only 7.6 million, of which men accounted for 51.5 percent and women 48.5 percent. By 1980, the population increased to 17.7 million. The proportion of men reached 52.2 percent, compared with 47.8 percent for women. Since then, the male proportion of Taiwan’s population has gradually declined.

In 2013, the proportion of women in Taiwan reached 50.01 percent, exceeding the proportion of men for the first time on record. As of this month, Taiwan’s population was 23.7 million, of which the female population had increased to 50.2 percent compared with 49.8 percent for men, indicating that women really do “hold up half the sky.”

Nevertheless, the current female labor force participation rate — measured by dividing the number of women in the labor force by the number of women aged 15 to 64 — was 54 percent, while the male rate was 62 percent.

These rates are quite different from the female and male population ratios.

The major reason for the relatively low female labor force participation rate is that a large number of female workers, estimated at nearly 2 million, choose not to work because they work in their own homes, according to the Directorate-General of Budget, Accounting and Statistics.

The National Development Council also indicated that the population aged 15 to 64 peaked in 2015, and the median age is 40.7 years of age. This means that half of the population is more than 40 years old and will soon be unable to participate in the labor force.

The Ministry of the Interior in April last year announced that Taiwan had officially become an “aged society,” as 14 percent of the country’s total population was over the age of 65, meaning that one out of every seven people was a senior citizen.

According to the WHO, if that proportion surpasses 21 percent Taiwan would become a “super-aged society.”

Taiwan’s population is aging at an alarming rate, and is expected to advance from an aged society to a super-aged society by 2027. A large amount of people, about 3.4 million, in the 55 to 64 age group will retire at that time. The proportion of people in the working age group is expected to decline from 73 percent last year to 67 percent in 2027.

According to the World Population Review, Taiwan’s population growth is expected to peak at 24.2 million in 2030, and then steadily decline to 22.8 million by 2050. The female population ratio is projected to increase from 50.2 percent last year to 50.6 percent in 2030, and then to 50.9 percent in 2050.

Population aging is the increasing median age in a population due to declining fertility rates and rising life expectancy. The median age in Taiwan was only 18.9 years in 1950. It increased to 22.9 in 1980, 27.3 in 1990, 29.6 in 1995, then jumped to 39.6 in 2015 and reached 40.7 last year.

On the other hand, Taiwan’s birthrate has been declining due to rapid economic growth over several decades. The birthrate reached its peak of 4.53 percent in 1955. It declined to 2.72 in 1970, 2.34 in 1980, 1.66 in 1990, 1.38 in 2000, 0.91 in 2015 and 0.82 in 2017.

Taiwan’s birthrate is now the third-lowest in the world, and is soon to be below the rate needed to sustain population growth.

An aging population combined with a declining birthrate is expected to result in an inadequate workforce, which constitutes a national security problem, because economic growth would not be sustainable.

To increase the female labor participation rate, the government must provide incentives to attract women to enter the job market. One of these incentives would be to offer financial assistance to take care of children for low-income families.

To encourage women to join the labor force, the government has to establish a public nursery program to assist female workers. Part of the recently proposed NT$40 billion (US$1.3 billion) “red envelope” program could be used in this aspect.

A lot of positions available for female workers are low-end jobs in the service and manufacturing sectors, and they are paid the minimum wage of NT$23,100 a month. After paying for babysitting and transportation, there is not much left.

With financial assistance to take care of their children, women would likely be more willing to work.

The government should also offer quality jobs for women. Under the green energy policy, the government intends to invest NT$980 billion to develop wind and solar energy. It should take about 30 years to develop this sector, which gives the government enough time to promote female participation in the sector.

The Ministry of Health and Welfare is also undertaking a 10-year, long-term care 2.0 scheme, in which hundreds of thousands of professional healthcare workers are required.

The government should fully utilize the surplus capacity at public and private universities to train women to participate in the long-term care business.

If 15 percent of the 2 million women not working joined the labor force, it is estimated that Taiwan’s GDP for last year could have increased by US$7.7 billion, or 1.3 percent.

The government should pay attention to the importance of female labor force participation.

Lee Po-Chih is professor emeritus of economics and former vice president of National University of Kaohsiung.