Gender Inequality and Economic Growth: a Cross-Country Analysis
Publication Date: Apr 2000
How does gender inequality affect economic growth? This study looks at the impact that the unequal distribution of income by gender has on rates of economic growth. It is based on a set of semi-industrialised export-oriented economies in which women provide the bulk of labour in the export sector. In contrast to recent work which suggests that income inequality slows growth, this paper argues that there is a positive link between gender wage inequality and economic growth. Evidence indicates that gender inequality both stimulates investment and enhances the productivity of investment through the effect that low wages for women has on exports. The policy implications of the results presented here raise the question of which growth strategies are most compatible with gender equity. What alternative approaches might help semi industrialised economies to overcome foreign exchange constraints so that they are not so dependent on cheap labour? What strategies may make it possible to promote both economic growth and gender equality?