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Fridays Academy: Gender and Macroeconomics

Ignacio Hernandez's picture

As usual on Fridays, from  Raj Nallari and Breda Griffith's lecture notes.

Gender Empowerment Measure (GEM)

The Gender Empowerment Measure (GEM) seeks to measure relative female representation in economic and political power (Klasen, 2006).  The GEM is concerned with opportunities, whether females are in a position to use their capabilities to take advantage of opportunities in economic and political power. It includes three dimensions of female economic and political power: (i) political participation and decision making power, as measured by female and male percentage shares of parliamentary seats; (ii) economic participation and decision-making, as measured by the female and male percentage shares of positions as legislators, senior officials and managers AND female and male percentage shares of professional and technical positions; and (iii) power over economic resources, as measured by male and female’s estimated earned income.

Calculating the GEM

       Source:   Technical Note 1, UNDP Human Development Report, 2006


For each dimension, an index is created known as an equally distributed equivalent percentage (EDEP). For the political and economic participation and decision-making dimensions, the EDEP is indexed by dividing it by 50 based on the rationale of an ideal society where men and women share power equally. When a male or female index value is zero, the EDEP is not defined and in this case is set to zero. The GEM is calculated as a simple average of the three indexed EDEPs.

The limitations of GDI (discussed last week) and GEM have been debated for some time and were the subject of a workshop convened by the Human Development Report Office (HDRO) in 2006. Two main problems were identified for the GDI. First, it is often used as a measure of gender inequality and used incorrectly. As noted above, the GDI focuses on the expansion of capabilities, it adjusts the HDI for life expectancy, education and incomes. Klasen (2006) notes that the mis-use of the GDI stems from its complexity and the manner in which it has been communicated. The second issue identified by the HDRO and summarized by Klasen (2006) is the manner in which the GDI is constructed, in particular with respect to income. There are no disaggregated data on male and female GDP. The income measure used in the GDI and GEM estimates an individual’s capacity to earn income. It is used in the GDI to measure the disparity between men and women in command over resources and in the GEM to measure women’s economic independence. Notwithstanding the issues of data availability and reliability, Klasen (2006) notes that “the problem is GDI implicitly assumes that gender differences in earned incomes are a good representation of gender differences in human development related consumption (such as adequate access to nutrition, housing and clothing).”  

A similar caveat exists with respect to earned income for the GEM. Klasen (2006) criticizes it for being needlessly complex and argues that just considering the gender gap of earned incomes rather than the absolute incomes of both males and females adjusted downwards by the gender gap in earned incomes would be sufficient and provide a better measure of female empowerment. Similarly, the complicated way in which gender gaps are calculated in the GEM is a serious shortcoming. Klasen (2006) suggests that a more intuitive approach would be to use the ratio of female to male achievements in the dimensions. Notwithstanding the conceptual and measurement issues, the GEM is constrained by the lack of data. Available data allowed for a calculation of just 75 countries in 2006, despite it being a clearer measure and more easily interpreted than the GDI.