The day after the pandemic: how to build back better, with emphasis on a more diverse and inclusive economic and financial system ” tenuto in data odierna dalla Vice Direttrice generale Alessandra Perrazzelli allo Women’s Forum Global Meeting.
The day after the pandemic: how to build back better, with emphasis on a more diverse and inclusive economic and financial system First of all, I would like to thank the moderator for asking this important question: even if there is still a lot of uncertainty about the time out of this serious crisis, I think it is absolutely necessary to start thinking about the future and how to grow again. Today there is full awareness of the fact that low female labour market participation constrains economic growth, especially in those countries, like Italy, where demographic prospects are deteriorated by low fertility rates and higher longevity. However, it is not just a matter of growth. Active participation in the labour market, the acquisition of skills, the accumulation of human capital, the development of one’s own potential, the availability of an independent income, are crucial elements for social inclusion and the enhancement of diversity.
These challenges, which were clear even before the current crisis, are even more challenging today, as the pandemic has further widened the gender participation gap in many economies. How to start again, then? I think that this crisis is also teaching us a lot. For instance, it is showing us that new forms of work are possible, based on flexible and digital working arrangements that may favour female labour market participation through a better balancing of work and family times. For instance, during the last spring the use of smart working in the Italian private sector has increased significantly, reaching a peak of 14.4 percent, about 13 percentage points more than a year earlier (to 18 percent if we include the public sector). New and very recent evidence produced by the Bank of Italy shows that the probability of being in smart-working was two points higher for women, and even more so for those with children aged 6-14. On the contrary, women with younger children were less likely to report having been able to work from home. Such patterns did not emerge for fathers.
The latter evidence, however, also highlights the existence of some new risks that policymakers have to keep in mind when thinking about the future of work. The possibility of working from home, while allowing women to better arrange their time and duties, cannot substitute for other childcare arrangements. Working from home and, at the same time, looking after young children imposes a cost on women, in terms of their productivity, which is likely to hamper their career in the medium and long run. Having in mind such trade-offs is key for the design of flexible work arrangements to make sure these are a real opportunity for women’s inclusion and do not turn into a gender segregation trap. The acceleration that the Covid crisis has imprinted on digitalization is also changing the behavior of consumers and savers. It is also a way to allow a greater access to financial markets. Growing evidence suggests that increasing women’s access and use of financial services can have not only economic but also social benefits, mainly because of their role inside the family. Thus, investing in girls’ and women’s financial literacy and fostering female access to financial services could prove to be a goal that Governments all over the world should pursue actively. Needless to say, lower financial inclusion brings about greater vulnerability to economic and financial shocks. The dramatic experience of the COVID-19 crisis has made it clear that those with less access to finance and lower financial literacy are less resilient to financial shocks. In particular, according to the findings of the survey of the Italian National Committee for Financial Education in June 2020, Italian women with a low income had more difficulties than men in mobilizing additional financial resources to face the shock. This makes it more urgent than ever to react. With the support of the Italian National Committee for Financial Education and in partnership with Soroptmist International, the Bank of Italy recently designed and launched financial literacy courses – Women and Money – to encourage and enable women, especially those in financial distress, to enhance their ability to manage their personal finance and make sound financial decision. The Covid-19 also contributed to shed light on the opportunities and challenges linked to the spread of digitalized financial services. The growing role of digitalization, accelerated by the pandemic, has the potential to improve financial access for underserved and vulnerable groups, but it may also be a source of exclusion, due to the lack of digital infrastructure or digital skills, as well a source of new risks, related to disguised access to digital financial services, including cyber risks. The Bank of Italy’s course for women is developed in 3 steps (which may increase in the future) providing the basic elements for more effective financial behavior: planning and budgeting; electronic payments instruments and home banking and cyber awareness.
Besides targeted programs for women, since the 2008-09 school year the Bank of Italy has been offering financial education programs to the Italian school system, for students of all ages. Year after year, it has aroused growing interest among teachers and learners and has proved to be effective in improving pupils’ financial knowledge. In fact, the empirical findings support the importance of financial education at school and, in particular, of starting as early as possible. Over ten years we have reached 500.000 students, but we are strongly committed in doing more, also through the digital expansion of our didactical materials and tutorials. However, financial literacy must be considered as a complement to market conduct, prudential regulation and financial stability. For this purpose, the Bank of Italy is deeply committed in fostering a more “inclusive” regulation and supervision, capable to steer and encourage the development of inclusive and responsible digital financial services while ensuring an adequate protection of the final customers.