Women’s economic empowerment and the Canadian labour market
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“Economic empowerment increases women’s access to economic resources and opportunities including jobs, financial services, property and other productive assets, skills development and market information.” – OECD
It’s International Women’s Day, and this year's theme, #InspireInclusion, asks us to consider what full economic inclusion could mean for women in Canada.
International Woman’s Day, from its 20th-century roots in labour movements worldwide through to its adoption by the United Nations in 1975, has persistently been entwined with the international struggle surrounding the politics of women’s work.
As global understanding deepens about the critical need to empower women and advance development goals such as economic growth, poverty reduction, health, education, and welfare (Golla et al., 2011), it’s important to understand the landscape of women's economic empowerment in Canada and examine women’s labour market outcomes.
In this article, we look at what data about labour market participation, wages and entrepreneurship can tell us about Canada’s progress toward economic empowerment for women.
What do we mean when we talk about women's economic empowerment?
Women’s economic empowerment is a multifaceted concept that has been quantified, measured and described in several ways. It’s a nuanced subject with no universally agreed-upon definition.
However, in alignment with the framework proposed by Taylor and Pereznieto (2014), at LMIC, we understand women's economic empowerment as a transformative process that intertwines power, agency and economic advancement. According to this framework, economic empowerment for women means:
- achieving equal access and control over economic resources
- exerting increased control over various facets of their lives
Women's economic empowerment is a crucial part of achieving the United Nations Sustainable Development Goals, particularly those intended to address poverty, promote education and advance gender equality. It also holds broader social benefits that can lead to increased productivity, higher economic growth and greater social stability (Sudha & Reshi, 2023).
Moreover, as summarized by Golla et al. (2011), economic empowerment offers a powerful avenue for women to unlock their potential and assert their rights.
Economically empowered women make substantial contributions to their families, societies and national economies. Globally, there is compelling evidence that women are more likely than men to invest their income into their children.
Labour force participation as an indicator of women’s economic empowerment
Labour force participation is one of the most commonly used indicators of women’s economic empowerment (De Haan, 2017).
Full-time employment in particular has been consistently demonstrated to be a crucial element of financial well-being. It is linked to the accumulation of financial assets, adequate preparation for retirement, access to fringe benefits, job stability, employer-sponsored training opportunities, and enhanced career advancement prospects.
Data from the International Labour Organization (ILO) reveal a persistent gender disparity in labour force participation. As of 2022, among individuals aged 25 to 54 years, the global gender gap in labour force participation stood at a significant 29.2 percentage points.
Specifically, female participation was recorded at 61.4%, notably lower than the male participation rate of 90.6%. This gap highlights a substantial imbalance in workforce engagement between men and women on a global scale.
Labour market outcomes for core-aged women in Canada have improved over 10 years
In Canada, women's participation in the labour force has undergone a transformative shift since Statistics Canada’s Labour Force Survey first recorded the employment rate of core-aged women at 48.2% in January 1976.
The employment rate for core-aged women has increased steadily since 1976. It exceeded 60% by the mid-1980s, surpassed 70% by the late-1990s and has consistently been over 80% since September 2021.
Over the past 10 years, we have observed increases in participation and employment rates across various groups of core-aged women, but, as Table 1 shows, there remains a gap between immigrant and Canadian-born women.
Table 1: Labour market indicators for core-aged female immigrants improve as they spend more time in Canada
|
2013 |
2023 |
|||||
| Participation rate | Employment rate | Share full-time | Participation rate | Employment rate | Share full-time | |
| 5 years or less in Canada | 66.1% | 57.1% | 76.9% | 77.4% | 69.5% | 84.7% |
| 5 to 10 years in Canada | 74.3% | 67.5% | 77.1% | 79.1% | 74.2% | 84.1% |
| 10 years or more in Canada | 81.4% | 76.1% | 81.6% | 83.6% | 79.5% | 83.5% |
| Born in Canada | 85.0% | 80.8% | 81.1% | 87.9% | 84.9% | 85.1% |
Source: Statistics Canada Table 14-10-0085
Table 1 shows the 10-year change in the participation rate, employment rate, and share of core-aged female immigrants to Canada working full-time by immigration status. All three employment categories show positive changes for all groups of women. In other words, core-aged women in 2023 were more likely to be in the labour force, more likely to be employed, and more likely to be working full-time than they were in 2013 regardless of how long they had been in Canada.
Female labour force participation, calculated as the number of core-age women in the labour force divided by the population of core-age women, has risen dramatically since the 1960s. This rise has been driven simultaneously by an increase in the proportion of employed women at any given time and a decrease in the propensity of employed women to withdraw from the workforce upon marriage or motherhood.
While Canadian-born women continue to exhibit the highest values across all three indicators, the most substantial advancements over the last decade have been observed among immigrant women who arrived within the previous 5 years.
Exploring labour market disparities among racialized women
Across the globe, labour market disparities are tied to gender, race, ethnicity and citizenship (Browne & Misra, 2005).
In Canada, compelling evidence underscores significant labour market disparities among various demographic groups. These disparities are not only rooted in gender, but intricately tied to racial identity, and they shape persistent inequities in Canadian labour markets. In fact, race and gender disparities have become entrenched features, evident in variations across labour force participation rates, median wages, and employment by occupation and industry.
Figure 1: Evolving labour market outcomes of core-age women by racialized group
Percentage point change between 2022 and 2023
Because Statistics Canada only initiated the publication of labour market data categorized by racialized groups in 2022, we were unable to conduct a 10-year comparison. However, we can compare the data for the years 2023 and 2022.
Figure 1 illustrates labour market indicators such as participation rate (depicted in green), employment rate (blue), and full-time employment rate (red). The arrows indicate whether the indicator values increased or decreased for the respective racialized group on the horizontal line below.
There are two important reasons for why we are discussing these three indicators instead of employment or labour force values: first, the number of people employed or in the labour force can fluctuate with changes in the population's size; and second, we do not have a long enough time series to identify trends in employment over time.
The rate-based indicators in Figure 1 account for population changes and clearly show whether the rate has gone up or down since 2022 in addition to which racialized group had the largest relative change.
The full-time employment rate is the percentage of employed core-age women working full-time (defined as 30 or more hours per week).
Figure 1 shows that the full-time rate increased more than the employment rate for seven of the racialized groups. This means that more full-time workers drive employment growth. This could be either workers shifting from part-time to full-time work or could indicate that a new entrant to the labour market has an increased likelihood of securing full-time employment.
Figure 1 also shows that the racialized groups labelled Black, Arab, West Asian and visible minority n.i.e. (“not included elsewhere”) experienced decreases in their employment and participation rates, but increases in their full-time employment rates.
Employment, full-time employment and participation all increased for Black core-age women. However, the population growth was so significant that the employment and participation rates fell. In other words, more Black core-age women were working in 2023 versus 2022, but the population of this group also increased. Therefore, on average, it was less likely that a Black core-age woman was employed.
For Arab core-aged women, the full-time employment level decreased, but not as much as employment. The result is that a core-age Arab woman is less likely to be employed, but more likely to work full-time if so.
Notably, the intersection of gender and race compounds these experiences, disproportionately affecting racialized women. Racialized women in Canada have lower labour force participation rates,1 and lower employment rates, are less likely to work full-time, and experience a larger wage gap compared to Canadian-born men.
Wages as an indicator of women’s economic empowerment
Wages are another indicator of women's economic empowerment.
One way to assess women’s wages is to examine the gender wage gap. By shedding light on the disparities in earnings between women and men in the workforce, the gender wage gap shows the difference between wages earned by men and wages earned by women. The gap can be measured using different metrics, including average hourly wages, median hourly wages, average annual earnings, and median annual earnings.
Across the world, women continue to earn substantially less than men.
In Canada, while men still earn more than women, this gap has narrowed from women earning 82 cents for every dollar a man made in 1997 to 87 cents in 2023.
Since Statistics Canada began collecting wage data in 1997, the average hourly wage for men has more than doubled (+109.6%), and the average hourly wage for women has increased even more (+123.7%). The average hourly wage for women is now higher than men's in a couple of health occupations, namely nursing and allied health professionals and therapy and assessment professionals.
Without adjusting for differences in job experience, qualifications, job characteristics or demographics, the gender wage gap in 2019 was 19%, down from 27% in 2000 across Canada (Schirle & Sogaolu, 2020).
Research has revealed many factors that contribute to the gender wage gap, including human resources practices, overtime work, motherhood (discussed below), human capital (schooling and work experience), gender gaps in skill acquisition and job transitions, and gendered occupational segregation.
While the last few decades have seen substantial progress in narrowing educational gaps and reducing gender disparities in labour force participation, occupational and sectoral segregation by gender remains remarkably persistent across space and time and is a major contributor to gender wage gaps (Borrowman & Klasen, 2020).
Several explanations have been put forth to explain this gendered labour segregation, including (Puzio & Valshtein, 2022):
Occupational and sectoral segregation go a long way toward explaining the gendered wage disparity in Canada, where women tend to occupy positions that pay less than roles more commonly held by men.
For example, in 2019, only 3% of women were employed in the construction industry (versus 14% of men), in which the average hourly wage was $32. In the same year, 17% of women and only 2% of men were engaged in the health care and social assistance sector, in which the average hourly wage was $24 (Schirle & Sogaolu, 2020).
The gender wage gaps widen when comparing immigrant and racialized women to Canadian-born white men. In 2019, the wage gap between Canadian-born white men and immigrant women was 47%. The gap increased to 61% for racialized immigrant women (Schirle & Sogaolu, 2020).
An additional earnings gap exists between types of immigrants and their years since arrival. According to Picot (2019), refugees, in particular, experience the lowest average earnings compared to other groups, such as family or economic class.
Refugees’ economic integration differs from those of other immigrant groups. They are often among the most vulnerable immigrants, experiencing a multitude of barriers that impede their economic and civic integration (Martén et al., 2019) and contribute to the so-called “refugee gap,” which refers to the employment and wage gap between refugees and other migrant groups (Connor, 2010).
Women with children also tend to receive lower wages than their peers who are not mothers (Cukrowska-Torzewska & Matysiak, 2020). This so-called “motherhood wage penalty,” the phenomenon by which women's labour market participation and future earnings are negatively affected by motherhood, is another contributor to the gendered wage gap.
The motherhood wage penalty is often referred to as the “motherhood wage gap,” “motherhood wage penalty” or “family wage gap.” The precise mechanism causing the wage gap for mothers remains unclear.
According to Cukrowska-Torzewska and Matysiak’s review of the literature (2020), potential explanations for this wage penalty include the possible loss of skills during care-related career breaks—including parental leave, reduced hours, or leaving the workforce entirely—or other choices that women make to prioritize caregiving, such as opting for lower-paying jobs that better align with family responsibilities or investing less effort in work.
The size of the wage gap is influenced by social context. A lower motherhood wage penalty is associated with the social acceptance of working women and access to flexible, well-paid parental leave, affordable and high-quality childcare, and other family-friendly policies (Petersen et al., 2010).
Despite these considerations, a statistically unexplained wage gap remains between men and women. Studies across Canada reveal that factors such as education, job tenure, work schedule, and various demographic variables can explain about 30% of the wage gap, leaving a significant 70% unexplained.
One frequently identified explanation for the unexplained portion of the gap is discrimination (Litman et al., 2020). This perspective holds that once the differences in relevant determinants of wages between men and women have been considered, any remaining pay disparity is due to discrimination.
However, this explanation might oversimplify the issue. If discrimination influences the choices women make about their own educations, careers and family responsibilities, then “unexplained" differential could underestimate the actual impact of discrimination.
Entrepreneurship as an indicator of women’s economic empowerment
The recognition of women's entrepreneurship as a facet of their economic empowerment has grown significantly around the world (Noor et al., 2021).
As we note in our Black History Month article, entrepreneurship is widely recognized as a key driver of economic mobility, wealth accumulation and job creation (Morgenthaler, 2007). The social and economic importance of entrepreneurship to economic growth on both local and global levels is undisputed (Gódány et al., 2021).
Entrepreneurship is vital in driving Canada's economy and generating employment opportunities, mainly through the significant contributions of small and medium-sized enterprises (SMEs) (Nimoh, 2022).
Women-owned businesses growing among small and medium-sized enterprises in Canada
According to Statistics Canada (2022), small businesses make up over 98% of all employer businesses3 and employ more than 10 million people—almost two-thirds (63.8%) of the total labour force.
The Women's Entrepreneurship Knowledge Hub (WEKH) is a digital platform that supports a network of regional partners, researchers and women entrepreneurs who collaborate around data- and knowledge-gathering to capture the experiences of diverse female entrepreneurs. The hub estimates that 18% of all businesses were majority-owned by women in 2022, and that 99% of these were small and medium-sized enterprises (SMEs).
Published in 2023, WEKH’s fourth annual report, The State of Women’s Entrepreneurship in Canada, highlights both the progress made and the challenges still facing women entrepreneurs across industries and from diverse backgrounds.
The report showcases that some women entrepreneurs have responded proactively to the economic climate with inclusive initiatives. For instance:
On the other hand, WEKH highlights barriers that continue to affect women entrepreneurs who have intersecting identities. These barriers include discrimination, geographic isolation, and formal or informal limitations on access to financing. For example:
Intersectional approaches to data- and knowledge-gathering are critical to understanding women’s economic empowerment
In recent decades, women in Canada have achieved notable progress in economic empowerment, making advancements in labour force participation, wages and entrepreneurship. This collective progress underscores the pivotal role that women play in shaping Canada's economic landscape. It also emphasizes the importance of making continued efforts toward greater inclusivity and empowerment.
However, despite these achievements, significant progress must still be made to fully understand and address intersectionality in the context of women's economic empowerment.
In a previous article, we discussed the transformative effect that intersectionality—which shows us how social identities and the roles associated with them can overlap and intersect to influence lived experiences—can have on labour market information.
Following Justin Trudeau’s 2021 re-election, and in accordance with election platform commitments, the federal government emphasized its commitment to collaborating with diverse communities and incorporating varied perspectives, including those of women, Indigenous Peoples, Black and racialized Canadians, newcomers, faith-based communities, persons with disabilities, LGBTQ2S+ Canadians, and minority language communities.
This commitment aligns with the government's dedication to the use of intersectional frameworks, such as Gender-based Analysis Plus (GBA Plus) and quality of life indicators, in developing policy.
The government has strengthened its implementation of GBA Plus, protected gender budgeting in the Canadian Gender Budgeting Act, established the Gender Results Framework, articulated Justice Canada's dedication to GBA Plus, and launched the Gender, Diversity and Inclusion Statistics hub by Statistics Canada.
Despite these commendable commitments and concrete steps, there remains a significant gap in the data needed to apply an intersectional lens to understand nuanced aspects of women's economic empowerment, specifically in terms of labour force participation, wages and entrepreneurship.
A way forward
While we have made strides in collecting and sharing a certain amount of intersectional data, more information is needed to fully grasp how economic empowerment manifests for all Canadian women.
The current data gaps obscure our understanding of the complex experiences of women in the labour force and women entrepreneurs. The reality for women is more challenging than the highlights presented here. Without a more nuanced understanding of how various intersecting identities shape economic outcomes, there is a risk of overlooking the challenges faced by different groups of women.
Bridging this data deficit is not just an exercise in comprehensiveness, but a crucial step toward acknowledging and addressing the multifaceted barriers that hinder true economic empowerment for all Canadian women.
Endnotes
1 Statistics Canada uses the term “visible minority” to refer to racialized groups in Canada. However, LMIC prefers the term “racialized.” While the latter is not without legitimate criticisms, it does underscore the fact that race is not inherently biological or objective; rather, it is a societal construct with origins rooted in human perceptions and social structures.
Statistics Canada classifies South Asian, Chinese, Black, Filipino, Arab, Latin American, Southeast Asian, West Asian, Korean, and Japanese populations as "visible minorities.” We at LMIC challenge the appropriateness of the term "visible minority" and urge a re-evaluation of its use in Canada. The UN Independent Expert on Minority Issues has emphasized the term’s lack of precision, citing potential barriers to effectively addressing the socio-economic gaps among diverse ethnic groups. Moreover, the term has been criticized for obscuring and diluting the distinct experiences of various minority groups. Contrary to the label, those designated as "visible minorities" in Canada are far from being a numerical minority.
2 The concept of a “glass escalator” refers to the advantages that heterosexual white men experience in the workforce (Williams, 2013).
3 An “employer business,” as defined by Statistics Canada, is a business that has at least one employee. In contrast, a “non-employer business” has no employees.
Brittany Feor
Research Lead (Acting), Senior Economist
Brittany Feor contributes to the accessibility and analysis of labour market information. She brings expertise in quantitative analysis and macroeconomics. Brittany’s quantitative research covers topics in labour and education, such as employment outcomes of recent Canadian graduates.
Suzanne Spiteri
Research Lead
Dr. Suzanne Spiteri is a sociologist with several years of experience in both qualitative and mixed-methods data analysis. She leads labour-related projects that explore labour market tightness and the labour market outcomes of under-represented groups.
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