## Macroeconomic Gains from Closing Gender Educational Gaps in Niger

## Source details

**Canonical URL:** [Macroeconomic Gains from Closing Gender Educational Gaps in Niger](https://www.imf.org/-/media/files/publications/selected-issues-papers/2023/english/sipea2023006.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/selected-issues-papers/2023/english/sipea2023006.pdf.md)
- [Structured JSON version](/-/media/files/publications/selected-issues-papers/2023/english/sipea2023006.pdf.json)

---

### Introduction
- IMF Selected Issues Paper completed on December 6, 2022; also published as IMF Country Report No 2023/029.
- Objective: explore gender equality and girls’ education attainment in Niger and estimate macroeconomic gains from reducing education gaps between boys and girls using a micro-founded general equilibrium model.
- Context:
  - Niger adopted a National Gender Policy aiming by 2027 to build a country without discrimination; authorities plan to build 100 boarding schools for girls by 2025 and close gender gaps in primary and secondary education enrollment by 2026.
  - Analysis links to strategic goals under the Programme de Développement Economique et Social (PDES) 2022-26.

### Stylized Facts
- International and regional comparisons:
  - Niger performs worse on the United Nations Gender Development Index (GDI) than the averages for Sub-Saharan Africa, WAEMU, and the Sahel region.
  - Education indicators drive underperformance; life expectancy is relatively better.
- Years of schooling (averages):
  - Females: 1.7 years
  - Males: 2.8 years
  - Benchmarks: Sub-Saharan Africa averages: females 5.1, males 6.9; WAEMU: females 2.5, males 4.6.
- Education spending and outcomes:
  - Government spending on education: 3.8 percent of GDP in 2020.
  - WAEMU average education spending: around 4 percent of GDP.
  - Sub-Saharan Africa average: 3.4 percent of GDP.
  - Sahel region average: 3.5 percent of GDP.
  - Primary school drop-out (female): around 45 percent in Niger; 20 percent in WAEMU; 22 percent in Sub-Saharan Africa.
  - Women married by age 18: more than 75 percent in Niger; 35 percent in WAEMU; 41 percent in Sub-Saharan Africa.
- Labor market structure for women:
  - Ratio of female to male labor force participation: better than Sahel average but Niger lags peers in wage/salaried female workers and has very high vulnerable employment.
  - Wage and salaried female workers: 1.8 percent (Niger).
    - This is 10 and 9 times less than averages in Sub-Saharan Africa and WAEMU, respectively.
  - Vulnerable employment (female): around 98 percent in Niger; 80 percent in Sub-Saharan Africa; 84 percent in WAEMU.
- Trends:
  - Gender Development Index increased by over 15 percent between 2000 and 2021.
  - Gender Parity Index in primary enrollment improved by around 30 percent over two decades; secondary improved by 24 percent; tertiary increased by 65 percent but remains very low.

### Model and Policy Simulation Design
- Model features:
  - Microfounded, lifecycle, dynamic general equilibrium model with heterogeneity by gender, skills, age, and financial access; calibrated to Niger’s 2018 economy.
  - Benchmark year: 2018 (microdata availability from Enquête Harmonisée sur le Conditions de Vie des Ménages 2018).
  - Households: man and woman make consumption decisions; labor supply decisions made separately.
  - Women face a utility cost when participating in labor market due to household coordination and social norms.
  - Human capital determined by initial skills, years of education, and evolves with experience.
  - Formal sector uses capital and labor; informal sector uses only labor.
  - Women face wage discrimination (lower wage per hour).
  - Government: taxes on formal consumption, formal labor income, and formal corporate revenues; spending on public consumption, public education, and transfers.
- Policy simulated:
  - Increase public education spending to equalize the number of years of education of boys and girls within each income percentile.
  - Motivation: men have more years of education than women at every income percentile.
  - Observed differences: average gender gaps in years of education range from slightly more than 0.3 additional years for men at the lower end to roughly 1.4 additional years at the upper end; the gap grows monotonically across income percentiles.

### Key Simulation Results and Macroeconomic Impacts
- Labor market participation and hours:
  - Female labor force participation increases by 85.6 percent.
  - Mean effective hours worked increase by 30.1 percent.
  - Overall gender gap in mean effective hours worked (male-to-female ratio) declines by 59.5 percent.
  - Hours gender gaps in formal and informal sectors shrink by 62.8 percent and 61.7 percent, respectively.
- Income and inequality:
  - Household mean labor income increases by 8.6 percent.
  - Overall gender gap in mean labor income (male-to-female ratio) declines by 53.3 percent.
  - Gender gap reductions in labor income: 62.8 percent (formal) and 54.9 percent (informal).
- Aggregate macroeconomic effects:
  - GDP increases by 11.2 percent (long-term).
  - Aggregate private consumption rises by 3 percent.
- Fiscal and government spending implications:
  - Public education spending must increase by 21.2 percent to implement policy.
  - Total government spending rises by 3 percent.
  - Such increases imply the need for budget reallocation and efficiency improvements.

### Simulation Results and Fiscal Effects
- Tax revenue and deficit impacts:
  - Labor income tax revenue change: 15.3 percent.
  - Corporate income tax revenue change: 16.2 percent.
  - Consumption tax revenue change: 3 percent.
  - Total tax revenue change: 11.3 percent.
  - The increase in tax revenue implies a 9.3 percent reduction in the primary deficit.
- Model notes on mechanics:
  - The sharp increase in female labor force participation is due to Niger's extremely low level of human capital combined with the model's embedded human capital theory. The model assumes that the initial stock of human capital is concave in years of education; when human capital levels are low, additional levels of education produce significantly greater human capital changes, creating a significant incentive for women to participate due to the significant increase in labor market returns from human capital.
  - Effective hours worked are regular hours worked adjusted for human capital levels. This is the relevant labor input concept for assessing variations in production.

### Policy Recommendations
- Accelerate implementation of ongoing and envisaged projects and strategies to improve educational attainment for girls, especially by:
  - Building adequate school infrastructure. The major government initiative is the construction of boarding schools for girls, with the goal of building 100 schools by 2025. Given strong commitments from partners following the pledges at the Education Summit in New York in September 2022, the government should enhance its absorptive capacity through good governance and aid management capacity building measures to ensure that the financial resources are disbursed on a timely manner.
  - Designing investments to improve the quality of education: replace the 36,000 classrooms made of precarious materials with solid materials and strengthen permanent teaching staff. Given the relatively high costs of the two projects, an improvement in the efficiency of education spending and budget reallocation will be needed.
  - Putting in place programs to keep girls in school: while the boarding schools for girls aim to keep girls longer in school, the envisaged 100 schools will not be enough to enroll all school-age girls and cover the entire national territory. Other interventions could be designed to reduce the opportunity and out-of-pocket costs of girls’ education through cash transfers. Providing targeted financial incentives to girls or families directly would help delay age at marriage and also enable girls who dropped out to return to school.
- Emphasize policies to expand economic opportunities for girls. Under the National Development Plan, the authorities committed to:
  - create decent and sustainable job opportunities for women and young girls;
  - strengthen the skills of women and young girls;
  - provide support for the improvement of working conditions in the informal sector where women and young girls are strongly represented;
  - promote female entrepreneurship in all sectors of activity.
  - The Government will ensure compliance with elective and nominative quotas and will take measures to improve the regulatory and legal framework for preventing and responding to gender-based violence. Specific measures and programs need to be adopted to implement these commitments.
- Increase accountability and effectiveness of programs to improve gender equality by adopting gender-responsive budgeting. Gender budgeting provides the basis for more evidence-based decision-making to ensure that public finances are effectively used to meet real needs, bridge current gaps and curb continued inequalities.

### Key Statistics and Figures Referenced
- Construction goal: 100 boarding schools for girls by 2025.
- Classroom replacement: 36,000 classrooms made of precarious materials targeted for replacement.
- Education Summit pledge context: commitments following pledges at the Education Summit in New York in September 2022.
- Fiscal and revenue changes from simulations:
  - Labor income tax revenue change: 15.3 percent.
  - Corporate income tax revenue change: 16.2 percent.
  - Consumption tax revenue change: 3 percent.
  - Total tax revenue change: 11.3 percent.
  - Primary deficit change: 9.3 percent reduction.

*Prepared by Rasmane Ouedraogo and Diego Gomes; IMF Selected Issues Paper SIP/2023/006 (completed December 6, 2022).*

### Section 1

### Macroeconomic Gains from Closing Gender Educational Gaps in Niger

### Introduction
- IMF Selected Issues Paper completed on December 6, 2022; also published as IMF Country Report No 2023/029.
- Objective: explore gender equality and girls’ education attainment in Niger and estimate macroeconomic gains from reducing education gaps between boys and girls using a micro-founded general equilibrium model.
- Context:
  - Niger adopted a National Gender Policy aiming by 2027 to build a country without discrimination; authorities plan to build 100 boarding schools for girls by 2025 and close gender gaps in primary and secondary education enrollment by 2026 (Table 1).
  - Analysis links to strategic goals under the Programme de Développement Economique et Social (PDES) 2022-26.

### Stylized Facts
- Niger’s performance:
  - Niger performs worse on the United Nations Gender Development Index (GDI) than the averages for Sub-Saharan Africa, WAEMU, and the Sahel region.
  - Education indicators drive underperformance; life expectancy is relatively better.
- Years of schooling (averages):
  - Females: 1.7 years
  - Males: 2.8 years
  - Benchmarks: Sub-Saharan Africa averages: females 5.1, males 6.9; WAEMU: females 2.5, males 4.6.
- Education spending and outcomes:
  - Government spending on education: 3.8 percent of GDP in 2020.
  - WAEMU average education spending: around 4 percent of GDP.
  - Sub-Saharan Africa average: 3.4 percent of GDP.
  - Sahel region average: 3.5 percent of GDP.
  - Primary school drop-out (female): around 45 percent in Niger; 20 percent in WAEMU; 22 percent in Sub-Saharan Africa.
  - Women married by age 18: more than 75 percent in Niger; 35 percent in WAEMU; 41 percent in Sub-Saharan Africa.
- Labor market structure for women:
  - Ratio of female to male labor force participation: better than Sahel average but Niger lags peers in wage/salaried female workers and has very high vulnerable employment.
  - Wage and salaried female workers: 1.8 percent (Niger).
    - This is 10 and 9 times less than averages in Sub-Saharan Africa and WAEMU, respectively.
  - Vulnerable employment (female): around 98 percent in Niger; 80 percent in Sub-Saharan Africa; 84 percent in WAEMU.
- Trends:
  - Gender Development Index increased by over 15 percent between 2000 and 2021.
  - Gender Parity Index in primary enrollment improved by around 30 percent over two decades; secondary improved by 24 percent; tertiary increased by 65 percent but remains very low.

### Model and Policy Simulation Design
- Model: microfounded, lifecycle, dynamic general equilibrium model with heterogeneity by gender, skills, age, and financial access; calibrated to Niger’s 2018 economy.
  - Benchmark year: 2018 (microdata availability from Enquête Harmonisée sur le Conditions de Vie des Ménages 2018).
  - Households: man and woman make consumption decisions; labor supply decisions made separately.
  - Women face a utility cost when participating in labor market due to household coordination and social norms.
  - Human capital determined by initial skills, years of education, and evolves with experience.
  - Formal sector uses capital and labor; informal sector uses only labor.
  - Women face wage discrimination (lower wage per hour).
  - Government: taxes on formal consumption, formal labor income, and formal corporate revenues; spending on public consumption, public education, and transfers.
- Policy simulated: increase public education spending to equalize the number of years of education of boys and girls within each income percentile.
  - Motivation: men have more years of education than women at every income percentile.
  - Observed differences: average gender gaps in years of education range from slightly more than 0.3 additional years for men at the lower end to roughly 1.4 additional years at the upper end; the gap grows monotonically across income percentiles.

### Key Simulation Results and Macroeconomic Impacts
- Labor market participation and hours:
  - Female labor force participation increases by 85.6 percent.
  - Mean effective hours worked increase by 30.1 percent.
  - Overall gender gap in mean effective hours worked (male-to-female ratio) declines by 59.5 percent.
  - Hours gender gaps in formal and informal sectors shrink by 62.8 percent and 61.7 percent, respectively.
- Income and inequality:
  - Household mean labor income increases by 8.6 percent.
  - Overall gender gap in mean labor income (male-to-female ratio) declines by 53.3 percent.
  - Gender gap reductions in labor income: 62.8 percent (formal) and 54.9 percent (informal).
- Aggregate macroeconomic effects:
  - GDP increases by 11.2 percent (long-term).
  - Aggregate private consumption rises by 3 percent.
- Fiscal and government spending implications:
  - Public education spending must increase by 21.2 percent to implement policy.
  - Total government spending rises by 3 percent.
  - Such increases imply the need for budget reallocation and efficiency improvements.

### Policy Implications and Links to Development Goals
- Closing gender gaps in years of schooling across income percentiles yields sizable long-term economic gains (GDP boost of 11.2 percent).
- Policy recommendations implied by analysis:
  - Increase and reallocate public education spending to equalize education by gender within income percentiles.
  - Improve spending efficiency to accommodate a 21.2 percent rise in public education spending while limiting total government spending increase to 3 percent.
  - Complement education investment with measures to reduce school drop-out and child marriage to convert education spending into better female outcomes and labor market integration.
- Expected broader benefits:
  - Higher female labor participation and earnings.
  - Improved fiscal outcomes from broader tax base and higher household incomes.
  - Contribution to PDES 2022-26 strategic goals.

*Prepared by Rasmane Ouedraogo and Diego Gomes; IMF Selected Issues Paper SIP/2023/006 (completed December 6, 2022).*

### Section 2

### Section 2

### Simulation Results and Fiscal Effects
- Revenues from taxes on labor income, corporate income, and consumption grow by 15.3, 16.2, and 3 percent, respectively.
- Total tax revenue increases by 11.3 percent, providing more than enough resources to cover the new education expenditures.
- The increase in tax revenue implies a 9.3 percent reduction in the primary deficit.

### Model Notes
- The sharp increase in female labor force participation is due to Niger's extremely low level of human capital combined with the model's embedded human capital theory. The model assumes that the initial stock of human capital is concave in years of education; when human capital levels are low, additional levels of education produce significantly greater human capital changes, creating a significant incentive for women to participate due to the significant increase in labor market returns from human capital.
- Effective hours worked are regular hours worked adjusted for human capital levels. This is the relevant labor input concept for assessing variations in production.

### Policy Recommendations
- Accelerate implementation of ongoing and envisaged projects and strategies to improve educational attainment for girls, especially by:
  - Building adequate school infrastructure. The major government initiative is the construction of boarding schools for girls, with the goal of building 100 schools by 2025. Given strong commitments from partners following the pledges at the Education Summit in New York in September 2022, the government should enhance its absorptive capacity through good governance and aid management capacity building measures to ensure that the financial resources are disbursed on a timely manner.
  - Designing investments to improve the quality of education: replace the 36,000 classrooms made of precarious materials with solid materials and strengthen permanent teaching staff. Given the relatively high costs of the two projects, an improvement in the efficiency of education spending and budget reallocation will be needed.
  - Putting in place programs to keep girls in school: while the boarding schools for girls aim to keep girls longer in school, the envisaged 100 schools will not be enough to enroll all school-age girls and cover the entire national territory. Other interventions could be designed to reduce the opportunity and out-of-pocket costs of girls’ education through cash transfers. Providing targeted financial incentives to girls or families directly would help delay age at marriage and also enable girls who dropped out to return to school.
- Emphasize policies to expand economic opportunities for girls. Under the National Development Plan, the authorities committed to:
  - create decent and sustainable job opportunities for women and young girls;
  - strengthen the skills of women and young girls;
  - provide support for the improvement of working conditions in the informal sector where women and young girls are strongly represented;
  - promote female entrepreneurship in all sectors of activity.
  - The Government will ensure compliance with elective and nominative quotas and will take measures to improve the regulatory and legal framework for preventing and responding to gender-based violence. Specific measures and programs need to be adopted to implement these commitments.
- Increase accountability and effectiveness of programs to improve gender equality by adopting gender-responsive budgeting. Gender budgeting provides the basis for more evidence-based decision-making to ensure that public finances are effectively used to meet real needs, bridge current gaps and curb continued inequalities.

### Key Statistics and Figures Referenced
- Construction goal: 100 boarding schools for girls by 2025.
- Classroom replacement: 36,000 classrooms made of precarious materials targeted for replacement.
- Education Summit pledge context: commitments following pledges at the Education Summit in New York in September 2022.
- Fiscal and revenue changes from simulations:
  - Labor income tax revenue change: 15.3 percent.
  - Corporate income tax revenue change: 16.2 percent.
  - Consumption tax revenue change: 3 percent.
  - Total tax revenue change: 11.3 percent.
  - Primary deficit change: 9.3 percent reduction.

*Source: IMF Staff Calculations; sipea2023006 - Section 2.*

---


_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2023/english/sipea2023006.pdf_