Gender Equality and Economic Growth

One of the most compelling policy arguments proffered by development professionals these days is that gender inequality is bad for economic growth – the efficiency argument for gender equality. The economic logic for this argument is straightforward: excluding women from education, employment and other economic opportunities limits the pool of potential workers and innovators and robs economies of a key productive asset. Discrimination against women and gender inequality also tend to raise fertility, lower investments in the next generation of human capital, and restrict household productivity growth, all of which have been linked with lower rates of per capita income growth. In this article we critically explore how gender equality contributes to economic growth, beginning with a brief overview of how most economists think about economic growth, and the role of gender in these models. We then detail the hypothesized pathways from gender equality to economic growth, covering both macroeconomic and microeconomic studies of the direct effects that gender equality has on economic growth and productivity, as well as research on the indirect mechanisms of fertility decline, investments in children, and less political corruption. We conclude with a discussion of recent research which argues that, under certain circumstances, gender inequality may actually contribute to economic growth.