Limited by labor: rural women, hired labor and financial services

Rural women are limited by labor. They have less access than men to the labor they need to power their farms, constraining their productivity, income, and resilience and driving the gender gap in agricultural output. Financial service providers have a role to play by designing and delivering responsive solutions that help increase rural women’s access and returns to labor.


Among women and men farming similar-sized plots in similar contexts in Sub-Saharan Africa, the differences in their agricultural productivity range from 23% in Tanzania to 66% in Niger. This means that in Niger, for example, male-managed plots yield on average 66% more per hectare than female-managed plots.


Lack of labor available to rural women has important implications at both the household and national levels


At the household level, when women with agricultural livelihoods lack the labor they need, yield and quality decline, leading to lower prices for their outputs and reduced income. In Côte d'Ivoire, for example, women growing cotton could not harvest at the optimal time due to their limited access to labor. The later cotton is harvested, the harder it is to spin, and cotton bolls harvested late are sold for prices 10% lower per kilogram. In Ghana, women growing tomatoes harvested their crops over a longer time period than men, due to time constraints and lower access to hired labor, which led to significantly higher levels of post-harvest loss.


At the national level, rural women’s labor constraints also have large economic costs. In Malawi and Tanzania, for example, women’s lower access to farm labor is one of the largest drivers of the gender gap in agricultural productivity. Closing the gap in the male labor that women farmers use could yield gross gains of over $45 million in Malawi and over $100 million in Tanzania.


Women in rural and agricultural livelihoods have less access to and lower returns from labor


Labor constraints affect women in rural and agricultural livelihoods (WIRAL) in various ways: WIRAL have less access than men to both household labor and hired labor and get lower returns to the labor they do hire. Let’s look at data from Ethiopia, Malawi, Niger, Nigeria, Tanzania and Uganda and then explore how financial services can play a positive role in increasing WIRAL’s access to and returns from labor.

1. WIRAL have less access to household labor

Female farmers in Malawi, Niger, southern Nigeria and Tanzania deploy fewer laborers from their households on their plots, particularly male household members. Why? One reason is that female farm managers live in households with fewer men compared to their male counterparts, possibly due to widowhood, divorce or migration. Another is that men tend to have greater control over the allocation of their household’s labor, including that of their wives and children, and often prioritize the use of family labor on their own farm plots and businesses.


This leads to starkly different patterns of labor use on men’s and women’s plots, even when comparing similar profiles of farmers. In Malawi, for example, male plot managers used 542 hours of male household labor per hectare, while female plot managers used only 407 hours: a 33% gap in favor of male plot managers.

2. WIRAL have less access to hired labor


In addition to WIRAL having less access to labor within their own household, women managing farm plots also hire less external labor compared to men farming similar-sized plots in similar contexts. The latest data from Niger, for example, indicates that female-managed plots use 16% fewer hired-labor days than male-managed plots. The fact that women farmers use less non-family, hired labor on top of limited household labor further limits their output and income.


Moreover, there are clear differences in the gender composition of hired labor. As shown in the chart below, male-managed plots in Nigeria, for example, use 50% more female labor and 65% more male labor than female-managed plots — a 15 percentage-point difference. If male laborers have more physical strength or are simply able to provide more (and more focused) labor hours due to having fewer domestic responsibilities, then female farmers face a double bind: Not only are they able to hire less labor, but the labor they do hire is less productive. This leads us to lower returns from labor, our third dimension.