Tag Archives: economic growth

Gender equality and economic growth

Despite the past and current social reform movements across the globe for gender equality, there still seems to be significant resistance to it as suggested by differences in male and female labor force participation rates. So in case you are still a closeted feminist, here is an economic argument to help you come out:

For a sample of Asian countries, Kim, Lee and Shin (2016) find that if gender inequality is completely removed, aggregate income will be about 6.6% and 14.5% higher than the benchmark economy after one and two generations respectively, while corresponding per capita income will be higher by 30.6% and 71.1% in the hypothetical gender-equality economy. This is because fertility and population decrease as women participate more in the labor market.

In addition to the calibration and simulation exercises to estimate the macroeconomic impact of removing gender inequality, the data in the paper highlights some other aspects of the gender inequality puzzle. For example, in almost all the Asian countries studied in the paper, females have higher average years of schooling than men. Yet the male labor force participation rate seems to be way higher than the female labor force participation rate. So why is this the case? What factors shape the distinct incentives that females and males face to participate in the labor market? I think these questions also are good research questions in themselves.

As an aside: Female and male labor force participation rate for China are 75% and 85% respectively while there is hardly any difference between average schooling at 8.1 and 7.3 respectively. As there is a frequent comparison between India and China, it might be worthwhile to see how Indian numbers compare to these. The average years of schooling for females and males in India is 7.59 and 4.81 respectively while the female and male labor force participation rate is 30.3% and 83.1% respectively. So not only that an average Chinese male is twice as educated than an average Indian male but the female labor force participation rate in China is more than double that in India. So any suggestions about India overtaking China anytime soon have to be taken with a fistful of salt!

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Filed under economic growth, gender, labor markets, macroeconomics, social perspectives