The voices of Urban Institute's researchers and staff
June 8, 2017

Three strategies for empowering women in informal economies

A version of this post was originally published on Oxfam's Views & Voices.

Pakistan is the sixth most populated country in the world, and at least two in five Pakistanis will live in urban areas by 2020. But, as in the rest of South Asia, rapid urbanization in Pakistan is “messy” and hidden. A large-scale informal economy and poor public service delivery is dampening the potential productivity benefits of agglomeration.

Seventy-eight percent of nationwide nonagricultural jobs are in the informal economy, and some 22 million people are in such roles, most of them women. Most of an estimated 8.5 million mostly unregulated domestic workers are also women.

Underdeveloped and unenforced work regulations make women disproportionately more susceptible to exploitive working conditions. They are poorly compensated and forced to work in hazardous circumstances without proper social or legal protections. Beyond the ambit of taxation, they are seldom considered productive economic agents and are relegated as secondary contributors to the economy.

These issues with urbanization and informal economies are not unique to Pakistan. All South Asian countries have similar problems. But overall gender disparities in Pakistan are considerably higher than the regional average, and the fact that more women are poor than men poses a particular challenge for women in Pakistan’s urban informal sector.

In a recent report we published for Oxfam, we explored these vulnerabilities in four of Pakistan’s major cities, focusing on identifying intervention opportunities based on voices heard on the ground. Although we found a need for diverse skills development and collective bargaining capacity, it was the lack of access to health care, education, energy, and public transportation above all else that women saw as mostly adversely affecting their economic security.

In particular, women lack access to public transportation, mainly because of fear of violent street crime and abuse. This directly hinders their ability to access jobs and reduces earning potential. A disproportionate share of women’s commuting in Lahore is on foot, which hampers access to jobs.

We propose three strategies for women in the informal economy to more effectively advocate for improved access to services and better bargain for collective interests.

1. Support worker organizations

One key difference we observed among respondents was that women who are members of worker organizations are significantly more aware of their rights. Yet, we also found that increased awareness does not always translate into better wages or improved access to public services. In this regard, community involvement and adequate leadership is vital to ensure the accountability of local government and elected representatives. 

2. Increase connectivity and bargaining capabilities

Being homebound reduces workers’ bargaining power. It forces women to rely on middlemen or worker cooperatives to connect them to the market and means that women have poor broad-based networks of access and communication because of limited physical mobility.

Workers who regularly leave their homes, such as domestic workers, also face substantial difficulties linked to lower-than-average educational attainment. Here, the use of smartphones and social media could increase connectivity and raise awareness regarding sexual harassment in public spaces.

3. Improve access to national identification documents

Lack of national identification documents is a major barrier in informal female workers’ ability to improve their livelihood. Interventions in partnership with the National Database Registration Authority to create specialty registration procedures for women facing these challenges, where affidavits from community and family members could substitute documentary proof, are means to alleviate this constraint.

The emerging home-based and domestic worker rights movement in Pakistan provides an opportunity to create stronger informal worker associations. By working with major private industries, the associations could enable formal integration of workers into global value chains. This would create a larger tax base and improve revenue generation.

This revenue could, in turn, be channeled into improving public infrastructure, law enforcement, and access to basic services, including national documentation. The potential success of this system would create even greater buy-in from women and communities, facilitating more participatory forms of urban governance.

Following a decade-long gap, the recent reinstatement of local governments is a great opportunity to introduce these much-needed reforms. It’s time for local political leaders to see economic growth and the social protection of informal workers as policy objectives that go hand-in-hand.

Pakistani laborers pick cotton in a field in Bahawalpur district in Pakistan's central Punjab province on November 13, 2015. (AAMIR QURESHI/AFP/Getty Images).

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