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Fridays Academy: Gender and Economic Growth

Ignacio Hernandez's picture

From  Raj Nallari and Breda Griffith's lecture notes.

Empirical studies of gender inequalities and economic growth (2)

In reference to the other measures of gender inequality and their relationship to income growth and other cultural variables; Dollar and Gatti (1999) find (see also table  below):

  • a convex relationship between economic equality under the law and per capita income
  • a convex relationship between women in parliament and per capita income
  • a significant relationship between life expectancy differential and income per capita
  • no significant relationship between women’s rights in marriage and per capita income
  • civil liberties have no consistent relationship with any of these (other) gender inequality variables
  • religious variables exhibit strong joint explanatory power for these (other) measures of gender inequality.


Other Measures of Gender Inequality (2SLS Regressions)

Source:  Dollar and Gatti (1999); p. 31


In summary, Dollar and Gatti (1999) find a causal relationship between per capita income and all measures of gender equality, except marriage rights. This suggests that the policies that promote growth in per capita income should lead to greater gender equality. However the effect is not instantaneous and the convex nature of the relationship between income per capita and educational achievement, economic equality and women in parliament, implies that this might take some time to happen.  Finally, it appears that religious variables are good predictors of gender inequality. 


Having established the causal relationship between per capita income and gender equality, Dollar and Gatti (1999) consider whether gender inequality affects growth.  While endogenous growth theory offers opportunities to consider gender disparities - e.g.  focusing on fertility and/or education variables - and economic growth, for the most part, the inclusion of gender inequalities in economic growth equations is not very well-represented. Dollar and Gatti (1999) cite Barro and Lee (1994) and Klasen (1998) for having included gender inequality in a growth equation. Incorporating male and female secondary attainment into a cross-section growth regression and find that female secondary education exhibits a negative relationship with per capita income growth. The finding is puzzling and Dollar and Gatti (1999) dismiss Barro and Lee’s explanation as unconvincing.  Moreover, Klasen (1998) finds the opposite result – that female secondary attainment is positively related to per capita income growth.


 The growth equation derived by Dollar and Gatti (1999) is typical – it attempts to explain income growth as a function of some initial conditions, including per capita income and policies that affect the environment for accumulation. The equation may be derived from either neoclassical or endogenous growth theory.  As we saw earlier, the main difference in outcome will be conditional convergence in the case of the neoclassical approach.  While the endogenous growth theory does not find conditional convergence, it suggests that the growth effects of policies will be permanent.  Dollar and Gatti (1999) note that although the neoclassical framework seems to hold in practice, the transition to the steady state is very slow so that in practice policies have effect over a significant period of time.