According to the United Nations (UN), the higher the role of women in a country’s economy, the better the welfare of its people. Data from the Central Statistics Agency (BPS) indicates that the Female Labor Force Participation Rate (FLFPR) has indeed experienced growth over the past decade. BPS data shows that in 2013, the FLFPR for women was at 49.9%, while for men it stood at 83.6%. Ten years later, in 2023, the FLFPR for women rose to 60.2%, with men at 86.9%. The increase in women’s participation in the workforce aligns with the rising levels of income. World Bank data shows that Indonesia’s GDP surpassed US$1 trillion in 2018 and continued to increase to US$1.4 trillion in 2023. On average (according to the UN), women earn 23% less income than men in the workforce and spend three times more unpaid working hours than men.
Empowering women in the economy will increase the availability of labor. How can this happen? Imagine the economy as a giant machine. This giant machine has inputs such as capital and labor, as well as technology. These inputs are then referred to as factors of production, and the machine operates through a production function. If the use of factors of production such as capital, labor, and technology is increased, the output of the economy will increase. Factors of production positively influence output.
However, just as a tree cannot grow endlessly, the number of working hours that can be produced from a pool of labor is also limited. For each job, there is a need for specific skills and knowledge. Simply increasing the extraction of labor from the available pool will not optimally fulfill the skill requirements of the job. That means, only by increasing the role of women as part of the labor force factor of production, will job opportunities be increased. Furthermore, the technology and skills endowment created will drive higher creativity, which in turn enhances technology and increases economic output. This also increases the output of the economy. Unfortunately, many stop there. Many developed countries are trapped in empowering women for a certain period. In the long run, this is not sustainable. Jay Forrester, a figure in System Dynamics, stated that most problems encountered in a system do not come from outside the system but rather from within the system itself. It’s like a policy of taking as many fish as possible from one pond; it will only increase the output once and then decrease it. Increasing the labor pool alone, without considering its sustainability, can have negative long-term impacts. How can this happen? In a system, there is never an actor who can consistently perform their function without experiencing a decrease in capacity. In the economic machine, the decrease in capacity occurs due to the natural cycle of aging and death of economic actors. Isn’t it amazing if we can create an economic machine that consistently produces continuously and even improves? The process of regenerating economic actors is the key to this. This means that the ability to reproduce, replicate, and continuously improve economic actors is crucial for the sustainability of this system. The UN also revealed that the presence of women in nurturing existing generations and preparing the next generation is crucial in the economic cycle. Unfortunately, caring for and preparing the next generation is often not considered part of the economic output. Reflecting on the above, empowering women in the economy is not limited to expanding the labor pool through the provision and expansion of working rights and the enhancement of skills and knowledge, but also through policies that ensure the regeneration process of economic actors runs smoothly. This means that policies such as preventing and eliminating child stunting, maternal and child health programs, early childhood education, and even programs for the elderly to remain productive must be implemented, in line with other economic policies. Without this, we witness economic slowdowns occurring in almost all developed countries including the United States, Germany, Japan, South Korea, and even China. Short-term output growth without accompanied by regeneration of economic actors and increased domestic demand and only relying on exports will erode economic growth in the future. China relaxed regulations and allowed as many births as possible. Japan provides subsidies to encourage its citizens to give birth. America even encourages immigration to quickly fulfill the labor pool and domestic demand needs. Celebrating Kartini is one way to increase women’s role in driving the economy. Women must be an important part of Indonesia’s development. One example is Bank Indonesia Central Java’s implementation of the Kartini Membangun Negeri (Kabari) program since 2022. This program helps women to be productive, thereby contributing to family welfare. Claudia Goldin, the 2023 Nobel Laureate in Economics, stated that the resurgence of women’s emancipation in the economy is the result of years of policies and not instant results. The road ahead is still long, and there is still much work to be done. We must work together to advance women for a more brilliant Indonesia.
