Document Library

Gender Inequality, Income and Growth: Are Good Times Good for Women?

Author: D Dollar and R Gatti
Date: 1999
Size: 42 pages (122 KB)

Access full text: available online

Summary

Why do women have lower socio-economic status in developing countries compared to developed countries? Does higher income reduce gender inequality? Does gender inequality affect growth? This paper published by the World Bank investigates the relationship between gender inequality, income and growth, with a particular focus on gender inequality in education. The paper concludes that under-investment in women does lead to slower growth.

Gender inequality can be measured in terms of access and achievement in education; improvements in health; legal and economic equality of women in society and marriage; and women’s empowerment (for example, percentage of women in parliament). Data for over 100 countries over thirty years is used to examine whether gender inequality can be explained by income or by variables such as religious preferences. The impact of gender inequality on growth is also analysed. Three specific questions are considered. First, is lower investment in girl’s education an efficient economic choice for developing countries? Second, does gender inequality reflect different social or cultural preferences? Finally, is under-investment in girls due to market failures which may decline as countries develop? Findings in relation to this are:

Gender equality and economic development are mutually reinforcing. Gender inequality leads to lower growth and income whereas investing in girls, in particular in their education, raises national income.
Higher income in turn leads to more gender equality. However, there is relatively little improvement as countries move from low to middle-income status. Rapid improvements occur as countries move from middle to higher stages of development.
Gender inequality reflects social or cultural preferences. Low investment in girls education cannot be understood merely as an efficient economic choice. It can be explained by religious preferences, civil liberties and regional variables.
The demonstrable improvements in gender equality that come with income increases suggests that there may be market failures hindering investment in girls in developing countries.

Investment in girls education is crucial for achieving higher growth and incomes but public action to improve gender equality is also required. Important policy implications are:

Policies that support rapid growth also indirectly contribute to gender equality.
Growth is not sufficient to eliminate gender inequality. The influence of religious variables, regional effects, and civil liberties on gender inequality suggests that direct action on gender issues is also needed.
Policies that increase per capita income will generally lead to greater gender equality, although it may take time.
The impact of improving access to female education on growth is very strong in middle income countries.
Market failures decrease as development proceeds. As pensions and capital markets develop, parents may not need to rely on the support of sons, reducing the bias in favour of male education. Public action is required to overcome these market failures.

Access full text: available online

Source: Dollar, D. and Gatti, R., 1999, ‘Gender Inequality, Income and Growth: Are Good Times Good for Women?’ Working Paper Series no. 1, The World Bank, Washington