The challenge of increasing the economic growth of a country is, as suggested here, to a considerable extent linked to the role played by women in the society. The costs of discrimination toward women in education and employment not only harm the women concerned, but impose a cost for the entire society.
In South Asia women are still in the twenty first century very much discriminated against in both education level and economic participation. In Middle East and North Africa the gender gap in education has been reduced from high levels, but gender gaps in employment remain pervasive. In contrast to some Asian countries, where export-oriented industries have led to a reduction of the gender gap in the labour market in the last decades, increased female education in MENA has not translated into higher labour market participation. Women in this region are encountering structural barriers37
Regarding the growth costs of gender inequality, we find the following:
in employment but those barriers may also be social, cultural, and ideological (World Bank 2004).
Firstly, gender inequality in education reduces economic growth also in the 1990s.
The findings from earlier studies that used data up until 1990 are largely confirmed through this expanded analysis although the impact of gender gaps in education in the 1990s in the panel specification is sensitive to the inclusion of specific regions in the 1990s.
Secondly, gender inequality in education in the Middle East and North Africa and South Asia region continues to harm growth in that region, but by decreasing amounts.
This is due to the fact that gender gaps in education have been sharply reduced there over the past two decades, with much faster progress in MENA than in South Asia. As a result, we expect gender inequality in education to play a decreasing role in harming growth prospects in MENA and South Asia. While this is true in an absolute sense, it is not always true in a relative sense. As East Asia has closed its gender gaps in education much faster than South Asia, the growth differences accounted for by differences in gender gaps between the two regions mounted in past decades.
Thirdly, the panel analysis suggests that gender inequality in employment has a sizable negative impact on economic growth. Simulations suggest that MENA’s and
37 Structural barriers related to the economic reconstruction, recession and limited domestic and foreign investment.
South Asia growth prospects, when compared to other regions, are significantly reduced through this effect as the impact of gender inequality in employment is large and has been falling much slower than in other regions.
Thus a significant constraint to higher economic growth in those regions appears to be the substantial gender inequality persisting in education and employment. While these results are suggestive, we want to emphasize that the assessment of the impact of employment gaps is based on data that are measured with error and are often not fully comparable internationally. It is shocking that comparable labor force participation and employment data are not available for most developing countries. This is despite the fact that increasing numbers of household and labor force surveys are undertaken in these countries, but the results are not used to generate consistent and comparable data on employment, labor force participation and pay.38
Also, the usual caveats of cross-country regressions apply, including omitted variable bias, model uncertainty, endogeneity, among others. We have tried to control for some of these issues, but more work will be needed to solidify the findings. Lastly, we need to acknowledge that our results concern the impact of gender gaps in education and employment on measured national output. To the extent that higher female labor force participation comes at the expense of reduced household labor, the economic and well-being losses of such a reduction is not included in our assessment. The extent to which this might be a problem is clearly an area of further research.
This remains a major challenge for the ILO and other international organizations charged with providing such data.
If our results are confirmed by further studies, this points to an urgent need of increasing female education level and their participation in the labour force. While our results suggests that changing the composition of the labour force to include more females (and thus fewer males) would have a positive effect on growth, a more realistic policy recommendation would be to develop an employment-intensive growth strategy that makes particular use of females. At the least, the results suggest that current barriers to female employment are not only disadvantageous to females, but also appear to reduce economic growth in developing countries, and particularly in MENA and South Asia
One should also bear in mind the findings from a large literature suggesting that gender inequality in education and employment also have a significant negative impact on
38 This is particularly lamentable as these household surveys have been used by the World Bank to generate roughly consistent and comparable and publicly available poverty statitics for developing countries. It is a shame that ILO does not have the capacity, funding, or political will to use these same data to generate internationally comparable employment data.
other development goals such as reductions in fertility, child mortality, and undernutrition.
Thus reducing existing gender inequality in education and employment will not only promote growth, but also further these other valuable development goals.39
39 Abu-Ghaida and Klasen (2004) and King et al (2008) to estimate the magnitude of these effects.