Implementing policies that remove labor market distortions and create a level playing field for all gives women the opportunity to develop their potential and to participate in economic life more visibly (IMF 2013). We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Multilingual organised crime and citizen security specialist with three years' experience conducting policy analysis and research to support both Commonwealth Small States and Latin America and the Caribbean countries. Washington: International Monetary Fund. The test allows us to identify the causal effect of gender inequality on industry growth in value-added and labor productivity. In this paper I propose to replace UNDP's Gender Inequality Index (GII) with two new indexes--a relative measure of gender inequality and an absolute measure of women's empowerment. De Loecker, J., 2013. Womens Role in Economic Development, New York: St. Martins Press. We drop the observations with a value-added share of manufacturing smaller than 0 or greater than 1. Washington: International Monetary Fund. The proposal . Aspires to . Annual Report. See, for example, De Loecker (2013), which documents the positive effect of export on productivity. Barro R. J., and J.-W. Lee, 1993. c. achieve gender equality and empower all women and girls d. ensure sustainable consumption and production patterns e. end hunger, achieve food security and improved nutrition, and promote sustainable agriculture b. promote economic growth and industrialization through urban development The official SDG indicators for these Goals tend to focus on environmental rather than social impact. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. If it is not available until 1993, we do not use that observation in the corresponding robustness check. We use industry-level value-added data in current US dollars. All rights reserved. Neither do we argue that such horizontal segregation, reflected in the differences in gender compositions of labor across industries, is by any means desirable. Thus, we do not study the developed economies, as these have high levels of gender inequality comparable to our benchmark countries, but we focus our analysis on the emerging-market and developing economies10. World Development Report, 2012. In columns (9) and (10), we control for financial development (measured by broad money as a share of GDP) and for institutional quality (proxied by political competition measure from the Polity IV database), respectively. We thus use the lagged period with respect to our growth statistics on emerging-market and developing economies under studywhich cover the 1990s. What Is Driving Womens Financial Inclusion Across Countries? First, we control for various factors, all in the form of an interaction term with the female share in employment. We draw this variable from the WDI database. The ratio of the number of positive aspects of womens legal rights to total codified aspects of womens legal rights. The IMF should expand its understanding of what it deems macro-critical in recognition of the full macro-economic spectrum of gender equality. The number of female students to the number of male students in a country in 1990. We thus start by computing the share of female labor in total labor in Sweden. We drop the industries for which female employment data are missing for the majority of our benchmark countries or for most years in the relevant period. Firm-Level Evidence from Viet Nam, The Economic Effects of Employment Protection: Evidence from International Industry-Level Data, Income Inequality and Economic Growth: Evidence from the American Data, Do Rules of Origin Constrain Export Growth? Washington. We see that the external finance dependence is also insignificant when interacted either with GII on its own or alongside an interaction term with female share. The work of custodian agencies in applying standardised tools and methods to produce relevant global statistics ensures that the indicators used in the Index are comparable. In the context of our analysis that exploits the dynamics in the labor market, high development on the gender equality front (such as in Sweden) is assumed to entail a large reduction of frictions on both the demand side of labor (due to, for example, discrimination in the labor market) and the supply side (due to, for example, gender social norms). With women accounting for fifty percent of the global population, inclusive growth can only be achieved if it promotes gender equality. IMF Members' Quotas and Voting Power, and Board of Governors, IMF Regional Office for Asia and the Pacific, IMF Capacity Development Office in Thailand (CDOT), IMF Regional Office in Central America, Panama, and the Dominican Republic, High-Level Summary Technical Assistance Reports, Financial Sector Assessment Program (FSAP), Currency Composition of Official Foreign Exchange Reserves. All right reserved. Thus, in the absence of gender-based frictions, the bulk of the heterogeneity in gender compositions across industries may be attributed to the industry-specific relative marginal product of labor (MPL) between men and womenreflecting womens comparative advantage in a given industry. Klasen, S., and F. Lamanna, 2009. United Nations Development Program, 2014. The highest coverage rate is in the Europe and North America region (100%). The SDG Gender Index represents the most comprehensive tool to measure overall progress towards gender equality that is aligned to the SDGs. Essentially, this translates into a full-blown cost-of-living crisis for hundreds of . Therefore, nationally-reported data are used wherever possible, and estimates are not made where data are missing. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". ( IMF) Japan ranks 19th out of 188 countries within the Gender Inequality Index. 5 tips for women to negotiate a higher salary. 1, Women Empowerment and Economic Development, The Role of US Monetary Policy in Global Banking Crises (No. Washington: International Monetary Fund. In certain circumstances, gender parity has been achieved, but there are also many . Schultz, T.P, 2002. Also, densely populated areas are usually more urbanized and thus more developed, but also less traditional, which is likely to result in lower gender inequality. These need to be set in the context of arising new trends such as digitalization, climate change, as well as shocks such as pandemics. Is Technology Widening the Gender Gap? Mainstreaming gender at the IMF starts with the recognition that reducing gender disparities goes hand-in-hand with higher economic growth, greater economic stability and resilience, and lower income inequality. The relative infant mortality ratio, which is the ratio of infant female mortality to infant male mortality, indicates gender inequality in infant health, where excess female infant mortality rates relative to male rates reflect the discriminatory treatment of women (see, for example Sen 1989, 1990). The EM2030 partners are exploring approaches that can capture relevant gender issues for these Goals in the next edition of the Index. Does Trade Cause Growth? American Economic Review, 37999. Sources of Economic Growth, Carnegie-Rochester Conference Series on Public Policy, 40, 146. However, they should only be interpreted as a snapshot of the set of issues we were able to include. Automation and the Future of Female Employment, IMF Working Paper 19/91. These are the countries with the lowest gender inequality index and the data available on female employees for the corresponding periods. All G20 countries have enacted gender focused fiscal policies but the budgeting and planning tools to operationalize these policies are generally less developed. Financial Dependence and Growth, American Economic Review, 88, 55986. A low GII value indicates low inequality between women and men, and vice-versa. London School of Economics and Political Science. This effect may operate through both extensive and intensive margins of employment. FDI is measured as the net inflows as a share of GDP. Since the specification controls for country and industry fixed effects (Equation 1), the only effects that are identified are those relative to the variables that vary both across countries and across industries. In less population-dense areas, gender inequality may pose a stronger obstacle to female employment, as women have to commute (alone) farther distances in order to work, which may be an issue due to social norms and/or safety. Estimates for national accounts (such as national income and national wealth) found on WID.world and on international statistical institutions databases are generally consistent, buy can vary for several reasons. In column (2), we control for population, as the log of total population. In columns (5)(7), we control for export, import, openness, and FDI, respectively. That is, similar to RZ, the benchmark countries should have relatively less (gender-based) frictions. International Monetary Fund, 2018b. A recently published IMF paper takes stock of gender budgeting practices in G20 countries. This is a direct measure of gender inequality. Hakura, M.D.S., M.M. Our paper by Anh Nguyen (IMF) and myself, titled "Does monetary policy affect income inequality in the euro area?" got finally accepted for publication in the Journal of Money . While the IMF has long recognized the importance of inequality issues, it has adopted in the recent years a more systematic and structured approach. Your current browser may not support copying via this button. These cover issues such as womens access to justice; their ability to discuss political issues; the legal frameworks that recognize LGBT rights; and more. Cross-Country Evidence on the Effect of Gender Inequality in Education on Economic Development, The Impact of Gender Inequality in Education and Employment on Economic Growth: New Evidence for a Panel of Countries., Are Educational Gender Gaps a Brake on Economic Development? Popov, A., 2014. The IMF Press Center is a password-protected site for working journalists. Loko, B., and M.A. In stark contrast are the findings in Barro and Lee (1993, 1994) and several subsequent papers (Barro and Lee 1996; Barro and Sala-i-Martin 2003) that report a negative association between female primary and secondary schooling and macroeconomic gains, controlling for male schooling. Washington. This dataset includes gender inequality and development indices. Transforming Our World: The 2030 Agenda for Sustainable Development, United Nations General Assembly, A/RES/70/1. 28 October 2021. Gender Inequality Index SDG3.1 SDG3.7 SDG5.5 Gender Inequality Index Maternal mortality ratio Adolescent birth rate Share of seats in parliament Population with at least some secondary education Labour force participation rate Rank (deaths per 100,000 live births) (births per 1,000 women ages 15-19) (% held by women) (% ages 25 and . What distinguishes WID.world's national accounts data from the UN, the IMF, the World Bank, or other national accounts data providers? Nevertheless, EM2030 has made an effort to include several indicators on gender and the environment in other parts of the Index. On the intensive margin, higher gender equality would empower women to fulfill their full potential in the labor marketfor example, by promoting them to managerial positions (or positions of influence)which is also growth promoting. Specifically, we exploit within-country variation across industries to test whether those that typically employ more women grow relatively faster in countries with ex-ante lower gender inequality. . To the extent that such technological advances are worldwide and that our regression sample consists of emerging-market and developing economies in the 1990s, the state of production technologies in Sweden in the 1980s makes a suitable proxy (especially given our focus on the manufacturing sector). Panel A consists of the emerging-market and developing economies in our main regression sample, and Panel B provides the statistics on the countries used to identify industries gender compositions. . The analysis is based on several years' work by more than one hundred researchers from around the world. These steps were applied in very few cases, comprising only a small number all data points underlying the Index. To test this, in Table 6, we show that our results are very similar if we use real labor productivity growth in the 1990s (value-added based) as a dependent variable instead of real value-added growth over the same period. To put the magnitudes in perspective, the real value-added growth rate is, on average, 2.2 percent per year, so the estimated differential growth rate of 1.7 percentage points is substantial. Even if the data on the service sector would have been available, services would be less suited for the analysis due to likely lower variation in gender compositions across industries, given that services are documented to be more gender equal in employment than other sectors in both developing and developed economies (Weinberg 2000; Borghans, Weel, and Weinberg 2014; IMF 2018b). Nine indicators that appeared in the first edition of the Index are not included in the 2022 edition because country coverage worsened, because data custodians (e.g., the World Health Organization (WHO) on obesity, the International Monetary Fund (IMF) on social expenditure) had not updated indicators in time for the 2022 Index analysis, or because data initiatives were no longer collecting the data. Yamarik, S., and S. Ghosh, 2003. Trickle-down economics has failed, and wealth is increasingly concentrated in the hands of the (mostly male) few, with the poorest women and girls most affected by low wages and a lack of adequate public services. Except for differences in the assumptions driving the identification of the industries features in a benchmark country, our methodology is equivalent to their empirical method. Mining and Sustainable Development: Gender, Diversity and Work Conditions in Mining. Gender In order to aggregate indicators to generate Index scores, it is necessary to transform indicator values so that they are based on a common scale of 0 to 100, where O is the worst score and 100 is the best score. With women accounting for fifty percent of the global population, inclusive growth can only be achieved if it promotes gender equality. Gender and Finance: A Case for Closing Gaps, IMF Staff Discussion Note 18/05. Image: World Economic Forum Global Gender Gap Report 2021. In comparison, GII is a broader index that reflects different manifestations of gender inequality and is more encompassing than any of these alternative (narrower) measures. We proxy financial development by broad money from the World Banks World Development Indicators (WDI), given that the data on equity markets and credit are not available for a large fraction of our countries in the 1990s (see, for example, King and Levine 1993). Juhn, C., G. Ujhelyi, and C. Villegas-Sanchez, 2014. The relative labor participation ratio, measured by the labor participation rate of males relative to females, captures the relative underrepresentation of women in the workforcean important component of gender inequality. Economic Gains from Gender Inclusion: New Mechanisms, New Evidence, IMF Staff Discussion Note 18/06. Washington. Global index reveals governments split between fighting and fueling inequality 9 October 2018 Nigeria and Singapore are among a group of governments that are fueling inequality, according to a newly released edition of the Commitment to Reducing Inequality Index developed by Oxfam and Development Finance International. Unlocking the Full Potential of Women at Work. McKinsey & Company. Washington: International Monetary Fund. Our estimates predict that an industry at the 75th percentile of the female share in total employment, compared to an industry at the 25th percentile, grows 1.7 percentage points faster in terms of value-added (and 1.2 percentage points faster in terms of labor productivity) when it is located in a country at the 25th percentile of gender inequality rather than in one at the 75th percentile. Abrahamsson, L., E. Segerstedt, M. Nygren, J. Johansson, B. Johansson, I. Edman, and A. kerlund, 2014. Their number has increased from only 9 in 2000 to 101 . 2019039), Board of Governors of the Federal Reserve System (US), Inequality and Growth: Industry-Level Evidence, Gender Discrimination and Growth: Theory and Evidence from India, London School of Economics and Political Science, A Reassessment of the Relationship between Inequality and Growth, Measuring Key Disparities in Human Development: The Gender Inequality Index, Catalyst for Change: Empowering Women and Tackling Income Inequality, Financial Market Integration and Economic Growth, Inequality, Gender Gaps and Economic Growth: Comparative Evidence for Sub-Saharan Africa, Womens Education and Economic Well-Being, Millennium Development Goals: Confronting the Challenges of Gender Equality and Fragile States, Women, Work and the Economy: Macroeconomic Gains from Gender Equity, Gender and Finance: A Case for Closing Gaps, Economic Gains from Gender Inclusion: New Mechanisms, New Evidence, Gender, Technology and the Future of Work, Women Managers and the Gender-Based Gap in Access to Education: Evidence from Firm-Level Data in Developing Countries. Gaye, A., J. Klugman, M. Kovacevic, S. Twigg, and E. Zambrano, 2010. Table 5. Hill, M. A., and E. King, 1995. We follow Barro (1991), among others, and use the teacher-student ratio in secondary education (a measure of the quality of education) as a proxy for the stock of human capital in a country. Snapshot of the Index for Closing Gaps, IMF Staff Discussion Note 18/05, E. Segerstedt, M. Nygren J.! The global population, as the log of total population marketing campaigns developing economies under studywhich cover the.... To include only be achieved if it is not available until 1993, we control for,., women Empowerment and Economic Development, United Nations General Assembly, A/RES/70/1 can capture relevant gender for!, E. Segerstedt, M. A., J. Johansson, I. Edman, and vice-versa Functional '' were applied very. Data in current US dollars their number has increased from only 9 in 2000 to 101 gender parity has achieved... 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