Measuring the Economic Gain of Investing in Girls: The Girl Effect Dividend
Author: Jad Chaaban and Wendy Cunningham
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This paper estimates the costs incurred by societies as a result of the social exclusion of adolescent girls. It explores the potential increases in national income that could be gained by addressing early school dropout, teenage pregnancy and joblessness. It finds that marginal investments in girls can have a substantial impact on GDP growth.
The estimates provided are of the opportunity costs, which measure the losses in terms of potential productivity gains and income that young girls could have achieved if they were employed, if they had delayed pregnancy, or if they had attained higher educational levels. Using secondary data from the International Labour Organization, World Bank, and World Health Organization, the paper estimates these costs in several African countries (Burundi, Ethiopia, Kenya, Malawi, Nigeria, Senegal, South Africa, Tanzania, and Uganda), in Brazil and Paraguay, and in India, Bangladesh and China. For example, if Kenya's 1.6 million adolescent girls completed secondary school and the 220,098 adolescent mothers in Kenya were employed instead of having become pregnant, the cumulative effect could add 3.4 billion US dollars to Kenya's gross income every year. Further:
- If girls in Burundi completed one higher level of education – that is, if primary school dropouts had completed primary school and secondary school dropouts had completed secondary school – the total value of productivity generated over their working life would be equivalent to GDP growth that is 1 percentage point higher in each year that these more educated girls were working. This estimate is adjusted for innate ability bias and labour demand elasticities.
- Comparing the cost of inactivity to the cost of joblessness, the greatest gains are in India, where the girl-boy employment gap is greatest.
- The lifetime opportunity cost related to adolescent pregnancy ranges from one per cent of annual GDP in China to 30 per cent of annual GDP in Uganda.
It is important to increase funding for adolescent girls and to track what this achieves. For example:
- Girls' engagement in the labour market could be enhanced by building marketable skills, facilitating entry to employment and alleviating gender constraints and expectations. Unconditional cash transfers could help to delay marriage and childbearing.
- Governments should register all newborns and provide birth certificates to ensure girls' access to health services and education. Girls (and boys) should have government-issued identification cards so that they can continue to access educational opportunities, jobs and health services.
- Governments should make the law work better for adolescent girls by repealing laws that discriminate against girls and ensuring equality of access to health services, education, jobs and earnings, credit and property ownership.
- Governments should mobilise communities to support adolescent girls. Religious and community leaders should be incentivised to foster healthier, more supportive communities where girls can create and execute their own solutions.
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Chaaban, J. and Cunningham, W., 2011, ‘Measuring the Economic Gain of Investing in Girls: The Girl Effect Dividend’, Policy Research Working Paper 5753, World Bank, Washington DC
Organisation: World Bank, http://www.worldbank.org/