North Macedonia Could Unlock 14% Higher GDP by Closing Gender Employment Gap: World Bank

A World Bank report says North Macedonia could increase its long-term GDP per capita by up to 14% by closing the gender employment gap, as women's low labour force participation remains a major barrier to economic growth. The report urges investments in childcare, skills development, equal pay, women's entrepreneurship and inclusive labour-market reforms to unlock the country's full economic potential.

North Macedonia has made notable progress in promoting gender equality over the past decade, but women continue to face significant barriers to economic participation, costing the country valuable growth opportunities. A new World Bank report warns that while laws protecting women's rights have improved, deep-rooted social norms, unequal access to jobs and leadership roles, and the burden of unpaid care work continue to hold back both women and the economy. The report estimates that closing the gender employment gap could increase North Macedonia's long-term GDP per capita by 12–14 percent, making gender equality one of the country's most promising economic reforms.

Women's Economic Participation Remains the Missing Link

The report identifies low female labour force participation as the country's biggest gender challenge. Women's participation in the labour market remains about 20 percentage points lower than that of men, while employment rates have changed little over the years. More than half of economically inactive women identify themselves as homemakers, highlighting how unpaid household responsibilities continue to keep many women out of paid employment.

Although women have achieved educational outcomes comparable to or even better than men, they remain concentrated in lower-paying sectors such as education, healthcare, manufacturing and retail. At the same time, engineering, construction and technology continue to be dominated by men. Women are also less likely to become entrepreneurs or occupy senior management positions, limiting their contribution to innovation and business growth.

For governments facing labour shortages, population ageing and outward migration, increasing women's workforce participation represents one of the most effective ways to expand the country's labour supply without relying solely on demographic growth or immigration.

Investing in Care Services Could Deliver High Economic Returns

One of the report's strongest messages is that unpaid care work has become a major economic constraint. Women spend more than three times as much time as men on childcare, cooking, cleaning and caring for elderly family members. This leaves them with less time for paid work, skills development and career progression.

The report argues that expanding affordable childcare, early childhood education and eldercare services should be viewed as economic investments rather than social welfare programmes. Better care infrastructure would enable more women to enter the workforce, improve productivity and increase household incomes.

International development partners have an important role to play by supporting investments in childcare facilities, rural social infrastructure and programmes that promote women's employment. Such investments can deliver both social and economic returns while contributing to more inclusive growth.

Rural Women and Businesses Need Greater Support

The report highlights that rural women face even greater challenges than their urban counterparts. Many work on family farms without formal employment contracts or ownership rights, limiting their access to agricultural finance, government support schemes and investment opportunities. Limited transport, healthcare and childcare services further reduce their ability to participate in the economy.

For policymakers, strengthening women's property rights, improving rural infrastructure and expanding access to financial services should become development priorities. These reforms could significantly improve productivity in agriculture while reducing rural poverty.

The findings also carry important lessons for the private sector. As labour shortages become more common, companies that invest in flexible work arrangements, equal recruitment practices, leadership development and family-friendly workplaces will be better positioned to attract and retain skilled employees. Financial institutions also have opportunities to expand lending to women-owned businesses, a segment that remains largely underserved despite growing entrepreneurial potential.

A Coordinated Reform Agenda for Inclusive Growth

Beyond employment, the report finds that women remain underrepresented in political and corporate leadership. They occupy around one-third of parliamentary seats, only a small share of ministerial positions and roughly one-quarter of corporate board seats. Gender-based violence and workplace discrimination also continue to undermine women's economic participation and career advancement.

To address these challenges, the World Bank recommends a broad reform agenda that includes expanding childcare services, enforcing equal-pay legislation, promoting wage transparency, strengthening active labour market programmes, encouraging women's participation in STEM fields, improving labour market information systems and increasing support for women-led businesses.

For governments, these recommendations offer a roadmap for boosting productivity and economic resilience. For international development agencies, they identify priority areas for investment, including skills development, women's entrepreneurship, rural livelihoods and gender-responsive public services. For businesses, they highlight the commercial benefits of building more inclusive workplaces and tapping into an underutilised talent pool.

The report makes a compelling economic case for action. Gender equality is no longer just a social issue—it is a development strategy. By removing barriers that prevent women from participating fully in the economy, North Macedonia has an opportunity to strengthen growth, improve competitiveness and build a more inclusive and resilient future.