Why The World Bank Is Wrong About Women
The myth that more traditional education equals prosperity and what to do about it
Last week, World Bank President Jim Yong Kim said, “Investing in girls and women is not only the right thing to do for them as individuals. It's also the smart thing to do for economies.”
I agree with him. We should invest in girls and women. But that’s about where the agreement ends. Because we have significant differences in our beliefs about what it means to do such investing.
How could a $2.5 billion investment in education be a bad thing?
For Kim’s World Bank, investing in girls and women means keeping them in school. They’ve pledged, “to invest $2.5 billion over five years in education projects to enroll and keep adolescent girls in school,” reports USA Today.
On the surface, this seems like a noble thing to do—and it is, to an extent. As reported by USA Today, a number of impressive statistics can be trotted out for making sure girls get an education:
- Every year in secondary school increases a girl’s potential earning power by 18%
- 1% more girls in secondary school in India would equal a $5.5 billion GDP increase
- There would be a 30% decrease in the poverty rate in Latin America with a 15% increase of women in the labor market
- “If a country increases the share of women who have completed secondary school by 1%, per capita income grows by 0.3%”
Aside from the fact that this comes from an organization made up primarily of ultra-rich men, the main problem, and one unaddressed by the World Bank, is that traditional education doesn’t give women and girls the skills that they need to handle the financial gains they make through increased education.
There’s education and then there’s financial education
It’s no secret that the world’s education systems are woefully lacking in financial education. Kids get a lot of head knowledge, but little practical knowledge on how to manage money and make money work for them, let alone important skills like how to use a credit card responsibly or take out a loan.
In fact, a global survey on financial literacy shows that most of the third-world countries the World Bank says could benefit from an investment in women’s education are ranked extremely low for financial literacy and education. And even the US, the world’s richest nation, ranks a pitiful 14th.
The woeful condition of financial education
This is a systemic issue that won’t be solved by throwing money at it. As Huffington Post reports [KC1] , in the US:
- Just 12% of K-12 teachers teach personal finance of any kind
- 31% don’t feel comfortable teaching about money
- 62% of teachers don’t think financial education “is a critical skill for college or careers”
This lack of financial education is setting future generations of women up for failure. According to Consumer Affairs , “76% of millennial women find investing downright confusing,” and nearly 4 out of 5 millennials are currently not investing. The millennial generation, by the way, is one of the most educated in American history (and the worst paid) .
Doing the same thing and expecting different results?
So, if the most-educated women in history in the most prosperous nation in history aren’t finding financial success, how will throwing $2.5 billion at the same or worse education systems in third-world countries bring the meaningful change that’s really needed for women across the world?
My bet is it won’t. As Einstein once said, “The definition of insanity is doing the same thing over and over and expecting different results.” Economies may prosper, or at least the ultra rich in those economies will, but in the grand scheme of things, the needle will move very little for the day-to-day lives of these women.
Nothing short of a massive investment in true, life-changing financial education will help raise the stakes for women across the world. That would be a worthy investment.
[KC1] Is there a link to this report?