March 9, 2015

Women and Girls: The Unrealized Gains of Human Capital

Holly Koch
BMKF Board member

While books like Lean In and Girl Boss have helped to renew a positive conversation about feminism in America, movements like Girl Rising, Half the Sky, and the Malala Fund, are pushing the plight of girls in developing countries further to the forefront of the public eye than ever before. To the benefit of millions of girls, the resulting discussion is evolving from viewing the gender gap in education less as yet another social ill for charitable giving to alleviate, and more as a global responsibility to eradicate.

Because it is more complicated to change the hearts and minds of those that have the power to hold women and girls back than an impassioned plea for their equality, among families, communities, and federal institutions, it is important to target a concern they share: capital.

In families of poverty, it is common for boys to be sent to school while their sisters remain in the home to complete household chores or work the land. While parents often focus on the opportunity cost of sending their girls to school as lost income in the short term, the true return on investment comes from allowing them to continue their education, obtain better employment, and bring in more income for the family.

As studies show, “Every year of schooling increases a girl’s individual earning power by 10 to 20 percent, while the return on secondary education is even higher, in the 15 to 25 percent range.” For struggling families, these gains can be significant enough to help change a culture of keeping girls at home.

Not only do girls need to attend school, they need career counseling to direct them toward their options. Attendance is only the first step of breaking into the benefits of education. In communities where girls are the first in their family make it to, let alone complete, secondary school, they do not have the mentorship from family that others with higher economic means enjoy. By investing in simple programs that help girls envision a future for themselves and inform them of the path that will take them there, a degree becomes less a piece of paper, and more the keys to becoming future leaders.

When it comes to struggling economies, governments are being forced to see the harm in not utilizing so much of their human capital. For India, the loss of GPD from girls dropping out of school is as much as $30 billion in annual growth.

Not only does educating girls provide economic gains, it reduces economic losses. The enrolment of girls in school has been known to delay sexual activity, marriage, and childbirth; has been linked to lower rates of HIV/AIDS and reproductive morbidities; and a reduction of hours spent working domestically and in the labor force.

Luckily for donors in higher income countries, educating a girl and, therefore, transforming her community takes very little. The return on investment is truly inspiring when considering that as little as $50 can provide the transportation costs for a girl while attending university in Nepal for one year. A mere $500 a year can create thought leaders like journalists and teachers. By taking advantage of the extreme difference in purchasing power parity of countries like Nepal and the United States, relatively small amounts of investment can help create a new generation of progress and hope in the way of gender equality and human potential.