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Fridays Academy: Gender and Macroeconomics

Ignacio Hernandez's picture

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

 Gender and Macroeconomics

As noted before, a simultaneous relationship characterizes gender inequalities and economic growth. Empirical studies have shown that economic growth benefits gender inequalities while gender inequalities also hinder economic growth. 

Stotsky (2006) notes that disparities – both absolute and relative to men – in education, health care and economic and social opportunities for women hinders economic growth, while at the same time, economic growth leads to a reduction in these disparities and thus improves women’s position. 

 

Extrapolating from the empirical findings in the development literature on the toll of gender inequalities at the personal level, WB 2001 notes that gender inequalities impose significant costs on productivity, efficiency, and economic progress. Precisely because gender inequalities curtail the accumulation of human capital in the household and labor market as well as prevent women or men from gaining access to resources, public services, or productive activities, gender discrimination diminishes an economy’s capacity to grow and to raise living standards (WB, 2001; p. 11).  For example, and as noted in Ça?atay (1998), research by Tzannatos (1992) showed that total output could be increased considerably by eliminating gender discrimination in occupational patterns and pay. King and Hill (1995) show that gender gaps in education have an adverse effect on growth. Evidence from Sub-Saharan Africa suggests that gender inequalities in the control of resources in agriculture constrains output responses that structural adjustment policies are designed to induce (Palmer, 1991; Gladwin, 1991).  Further evidence cited in WB 2001 suggested that farm yields in Burkina Faso, Cameroon, and Kenya could rise by as much as 20 percent of current output if there were more equal control of inputs and farm income by men and women.

 

Furthermore, as evidenced by the figure below, faster gaps in closing gender gaps in schooling would accelerate economic growth.  The underlying data suggest that had countries in South Asia, Sub-Saharan Africa, and the Middle East and North Africa embarked on closing the gender gap in average years of schooling similar to East Asia in 1960; by 1992, their income per capita would have grown by 0.5 to 0.9 percentage points higher per year, significantly greater than the actual rates.  Even for middle and high income countries, closing the gap in secondary education – an increase of 1 percentage point in the share of women with secondary education – would be associated with an increase in per capita income of 0.3 percentage points, controlling for other growth-promoting variables.   

 

 Faster Progress in Closing Gender Gaps in Schooling Would Accelerate Economic Growth