It is tough for a Saudi Arabian woman to get a driver’s license. Only in rural areas might you see women behind the wheel. Even with recent protests, imagine, to get to work, to pick up groceries, to take a child to the doctor, you need a man. And, if that man is not a relative, you have to pay him.
A 2009 Time article tells about a female deputy minister of education who uses video conferencing to communicate with male colleagues. Among the lowest in the world, the labor force participation rate for Saudi women is 17%. And yet, literacy among Saudi women is high.
The Economic Lesson
For us, the key here is human capital. For an economy to grow and thrive optimally, the factors of production, land, labor, and capital, need to be appropriately allocated. When there is gender bias, women’s talents are underutilized. Consequently, economic growth is less than it might be.
An Economic Question: To illustrate underutilization, economists can use production possibilities graphs. On production possibilities graphs, with the X-axis labeled consumer goods and the Y-axis, capital goods, a bowed out curve is drawn which illustrates a country’s maximum production capability. How would you display current production in a nation that constrains female performance?