The Influence of Gender Inequality on Economic Growth

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The Influence of Gender Inequality on Economic Growth

¨ Hausarbeit im Rahmen des Hauptseminars ”Okonomie des Geschlechterverhaltens in der Geschichte” von Prof. Dr. Baten im SS 2004

David G¨mbel u Quellgasse 16 72070 T¨bingen u Informatik

Contents
1 Introduction 2 Gender Inequality and Economic Growth 2.1 Recent Research . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 2 3

3 Analysis of the Impact of Gender Inequality on Growth in Industrialized Countries 4 3.1 Idea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.2 Construction of the Model . . . . . . . . . . . . . . . . . . . . 5 4 Results from Cross-Country Regressions 4.1 Explanation and Prediction of the Level of GNP 4.2 Explanation of Growth . . . . . . . . . . . . . . 4.3 Discussion of the Results . . . . . . . . . . . . . 4.3.1 Measurement of Economic Progress . . . 4.3.2 Inequality in Employment . . . . . . . . 4.3.3 Inequality in Education . . . . . . . . . 5 Conclusion A Tables: Level of GNP per capita explained B Tables: Level of GNP per capita predicted C Tables: Absolute Growth of GNP per capita explained 8 8 10 11 11 12 13 15 16 17 18

per capita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . .

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D Tables: Percentage of Growth of GNP per capita explained 19

1

Introduction

Inequality between man and woman can be of various kinds. As far as economic aspects are considered, biases in life expectancy, education, jurisdiction, and professional life are among the top suspects that might deserve closer investigation. However, in very general, it seems neccessary to clarify that inequality in itself does not neccessarily need to be something to be considered as negative. As a blunt example, differences in heigth and bodily strength between the two sexes are certainly not of discriminatory nature, but simply a biological fact. Thus, when attempting to measure inequality, one should take care not to incorporate a priori ethical aspects into the items explaining inequality. Nonetheless, it may not be forgotten that gender inequality itself can well be considered bad and require political counteractions, regardless of the existence of a link with economic growth. This paper focuses on democratic industrialized countries in the 1970s and tries to measure the influence of gender inequality in health, education, and the labor market using cross-country regressions. In section two, a summary of literature and recent research results relevant for this work is given. Section three layouts the basic ideas behind the model that was used in the regressions and describes the calculation of the incorporated factors and some auxiliaries. In the fourth section, the results of the analysis using the basic model and its variations are explained. Section five concludes and briefly sums up the results of the work presented in this paper.

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2.1

Gender Inequality and Economic Growth
Recent Research

Stephan Klasen of the University of Munich published a broad statistical analysis of possible reduction of economic growth by gender inequality factors1 ) in 1960 to 1992. By the use of cross-country and panel regressions, he finds that there is a notable and negative influence of gender inequality. Most importantly, a bias in education directly impacts economic growth via lowering the average quality of human capital, and inequality in employment is also linked with lower growth2 . Gender inequality in education also seems to influence other factors impeding economic growth, such as fertility and child mortality rates, thus indirectly lowering economic progression. These effects are sizeable, as inequality in education accounts for up to 0.9% lower annual growth in South Asia and Sub-Saharan Africa since the 1960s, while growth in the same regions may have been prohibited by another 0.3% when compared to East Asia. The...
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