## 1. Introduction

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---

### Research question and motivation
- Whether cross-country income differences narrow over time is a major question in the economics literature.
- The paper asks whether gender equality—specifically legal gender equality—plays a role in bridging income differences across countries.
- Rationale: ensuring a level playing field for women can help poorer economies reach their potential and catch up with living standards in richer countries.

### Gender inequality: scope and economic relevance
- Women account for half of the world’s working-age population, but constitute only about a third of the labor force globally.
- About 700 million fewer women relative to men are in paid employment.
- When paid, women tend to be employed in less secure jobs with limited career prospects, poorer work conditions, and lower pay.
- Women’s inclusion in activities from financial market participation to asset ownership remains much more limited compared to men.
- Gender inequality is both a human rights issue and an economic phenomenon: removing barriers to women’s economic inclusion can yield large gains.
- Recent studies estimate that the economic boost can be larger than a quarter of GDP for many developing economies if existing barriers are eliminated.

### Mechanisms linking gender equality to growth and convergence
- Channels through which gender equality fosters economic growth:
  - Productivity growth (extensive and intensive margins).
  - Female labor force participation and a larger talent pool.
  - Accumulation of human capital and intergenerational investment (working women investing more in education, food, health of children).
  - Greater efficiency of labor market allocation, entrepreneurship and innovation, economic diversification, reduced income inequality, enhanced financial stability, improved competitiveness, and mitigation of demographic shift effects.
- In the Solow model context, the rate of convergence (휆) is an increasing function of the rate of change of “labor-augmenting productivity”: 휆 = (푛+ℎ+훿)(1−훼), where 푛 is the growth rate of population, ℎ is the growth rate of labor-augmenting productivity, 훿 is the depreciation rate of physical capital, and 훼 is the elasticity of output to physical capital.
- Legal constraints that discriminate on the basis of gender can block these channels by limiting women’s labor force entry, occupation choice, entrepreneurship, asset ownership, and access to credit.

### Focus on legal gender equality and measurement
- The analysis focuses on gender discrimination in law as a visible and potentially actionable bottleneck for gender equality.
- Data source: World Bank’s Women, Business and the Law (WBL) database.
- WBL captures inequalities in domestic laws and regulations throughout women’s work life across eight aspects:
  - (i) mobility, (ii) protection in the workplace, (iii) pay, (iv) marriage, (v) parenthood, (vi) entrepreneurship, (vii) ownership of assets, and (viii) pension system.
- These areas cover legal constraints that affect labor force entry, pay parity, parenthood-related treatment, entrepreneurial obstacles, asset ownership and inheritance, and retirement benefits.

### Stylized facts on legal reform progress
- Remarkable global progress toward legal gender equality over the last five decades, albeit uneven across countries and legal domains.
- Global averages:
  - Mean WBL index increased to about 76 in 2019, from 46 in 1970.
  - WBL index = 50 means women, on average, have half of the economic rights that men have; WBL index = 100 indicates perfect equality.
- Indicator-level notes:
  - Mobility indicator: started from 76 in 1970; modest progress since.
  - Workplace and parenthood indicators: started from levels below 20 in 1970; workplace-related laws accelerated during the 2000s.
  - As of 2019: workplace-related laws give women slightly more than three-quarters of the rights men have; parenthood-related laws give women around half of the rights men have.
- Reform waves and frequency:
  - Two waves of legal reforms globally: during the 1990s and the 2000s.
  - Over 1970-2019, an average country in the sample experienced around 10 reforms.
- Cross-country dispersion and percentiles:
  - Standard deviation of the WBL index increased by 46% between 1970 and 2014 and declined by only 6% over 2015-2019.
  - There exist 113 countries in 2019 in which women have at least 75% of the economic rights that men have, while this was zero in 1970.
  - In 19 countries this ratio is lower than 50% as of 2019, whereas this was the case for 105 countries in 1970.
- Regional patterns (selected figures):
  - High-Income OECD region: average law score around 56% in 1970, increased to 95 as of 2019.
  - Middle East and North Africa region: average WBL index 31 in 1970, reached 49 as of 2019.
  - Sub-Saharan Africa: WBL index jumped from 38 in 1970 to 71 in 2019.
- Pairwise correlations among indicators:
  - Pension score generally has the lowest correlation with other indicators.
  - Workplace indicator has the highest correlation with the rest of the indicators.
  - Marriage indicator has a correlation above 0.6 with mobility and assets indicators.

### Empirical findings on legal gender equality and convergence
- Main empirical message: greater legal gender equality is associated with stronger income convergence across countries.
- Identification and specification (overview):
  - Data transformed into ten non-overlapping 5-year periods: 1971-1975, 1976-1980, ..., 2011-2015, and 2016-2019.
  - Baseline equation includes interaction GDP per capita × Law score; country and period fixed effects; standard errors clustered at the country level.
  - Convergence parameter λ_{c,t} = β1 + β2 Law score_{c,t}; convergence occurs if λ_{c,t} is negative.
- Main results (Section 5.1, 5-year periods, first column Table 1):
  - GDP per capita: -3.08*** (0.60)
  - GDP per capita x Law score: -0.02*** (0.01)
  - Law score: 0.17*** (0.05)
  - R-squared: 0.37; Countries: 182; Observations: 1536
- Economic magnitudes:
  - Moving from the 25th to the 75th percentile of the law score (47 to 73) implies Δ휆75th−25th = (73−47)×0.02 = 0.5.
  - For a country initially at 50% lower GDP per capita relative to peers, climbing from the 25th to the 75th percentile in law score raises per capita income growth by 0.3 percentage points per annum (0.5 ×50%), on average over the subsequent five-year period.
  - Sub-Saharan Africa example: average GDP per capita during the 2010s was about 27% of that of Europe & Central Asia (i.e. 73% lower). A quarter improvement in the WBL index could lead to about 0.4 percentage points higher per capita GDP growth in annual terms, corresponding to almost half of the average per capita GDP growth in Sub-Saharan Africa (1.1 percentage points) over the sample period.
- Robustness across frequencies:
  - 10-year periods (Table 1):
    - GDP per capita: -3.25*** (0.52)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: 0.15*** (0.04)
    - R-squared: 0.56; Countries: 180; Observations: 751
  - Annual frequency (Table 1):
    - GDP per capita: -1.86*** (0.66)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: 0.19*** (0.05)
    - R-squared: 0.15; Countries: 185; Observations: 7615

### Controls, alternative explanations, and robustness
- Control variables and conditional convergence (Section 5.2):
  - Role of legal gender equality in convergence remains when controlling for country-specific time-varying factors.
  - Controls with positive association to growth: financial openness, financial development, exports.
  - Selected coefficient ranges (Table 2):
    - GDP per capita: -2.69*** (0.50) to -3.94*** (0.87)
    - GDP per capita x Law score: -0.02*** (0.01) to -0.04*** (0.01)
    - Law score: 0.12*** (0.04) to 0.34*** (0.07)
    - R-squared range: 0.40 to 0.43; Countries range: 157 to 182; Observations range: 1265 to 1485
- Alternative explanations tested (Section 5.3):
  - The catalyst role remains significant after including competing channels (e.g., financial development, inflation).
  - Findings: financial development contributes to convergence; inflation reduces convergence.
  - Selected ranges (Table 3):
    - GDP per capita: -2.84*** (0.54) to -3.94*** (0.87)
    - GDP per capita x Law score: -0.02*** (0.01) to -0.01** (0.01)
    - Law score: 0.11** (0.05) to 0.15** (0.07)
- Robustness checks (Section 5.4):
  - Alternative law score definitions (Table 4) and sample restrictions leave main result intact.
  - Examples (Table 4):
    - Ratio of number of questions (0–1 scale): GDP per capita x Law score: -1.77*** (0.50); Law score: 16.85*** (4.69)
    - Cumulative change since 1970: GDP per capita x Law score: -0.03*** (0.01); Law score: 0.26*** (0.06)
  - Additional checks (Table 5) include dropping extremes, weighting by GDP, excluding advanced economies, adding country-specific time trends, and dropping the US; key interaction remains negative and significant in most specifications.
  - Appendix results:
    - Appendix Table A3: convergence within Sub-Saharan Africa shows similar role for legal gender equality.
    - Appendix Table A4: lower adolescent fertility rate (inverse proxy for gender equality) is also related to stronger income convergence.

### Heterogeneity across legal domains
- WBL index is an unweighted average of eight indicators: mobility, workplace, pay, marriage, parenthood, entrepreneurship, ownership of assets, pension.
- Excluding one indicator at a time (Table 6) does not materially change the positive role of gender-equal laws in convergence:
  - Across exclusions, GDP per capita coefficients are around -3.11 to -3.23 (***); GDP per capita x Law score: -0.02*** (0.01); Law score: 0.14*** to 0.18***.
- Individual indicator results (Table 7) — selected significant interaction effects:
  - Workplace: GDP per capita x Law score = -0.01*** (0.00); Law score = 0.07*** (0.02)
  - Pay: GDP per capita x Law score = -0.01*** (0.00); Law score = 0.11*** (0.03)
  - Marriage: GDP per capita x Law score = -0.01* (0.01); Law score = 0.08 (0.05)
  - Parent: GDP per capita x Law score = -0.02*** (0.00); Law score = 0.15*** (0.04)
  - Pension: GDP per capita x Law score = -0.01*** (0.00); Law score = 0.13*** (0.04)
- Caveat: single-indicator analysis ignores complementarities across legal domains; progress must be holistic because interlinkages and spillovers are important.

### Caveats and complementarities
- De jure legal changes may not immediately translate into de facto improvements because social norms and cultural attitudes also shape outcomes and can take longer to change.
- The legal environment can serve as a backstop and a trigger for changes in informal codes.
- Legal reforms are one element of a broader strategy; progress in education, health, and financial services is also crucial and can influence translation of legal reforms into outcomes.
- The pace and feasibility of legal reforms vary by country because of legal system complexity, institutional arrangements, and traditions.

### Policy implications and post-pandemic relevance
- Reforms that eliminate gender bias in the law can catalyze convergence, helping poorer countries catch up with richer ones through stronger growth.
- The Covid-19 crisis has caused a large global downturn and appears to exacerbate cross-country income gaps and within-country gender imbalances.
- Reforming gender-discriminatory laws offers a window of opportunity for less developed countries to mitigate scarring effects of the Covid-19 shock and to alleviate pandemic-induced gender inequities, supporting inclusive, resilient, and sustainable growth.
- Policy recommendation: countries should strive to reform gender discriminatory laws with a view to guaranteeing legal equality for women in all dimensions; such legal reforms can play a role in bridging existing cross-country income gaps over the longer term.

### Contribution to the literature
- The paper extends literature on gender equality and growth by examining whether legal gender equality shapes the evolution of cross-country income differences over time—i.e., whether legal gender equality acts as a catalyst for convergence.
- It also contributes to the convergence literature by showing that gender-equal laws strengthen the convergence process.

*Source: wpiea2022155-print-pdf — 1. Introduction (IMF Working Paper — Legal Gender Equality as a Catalyst for Convergence)*

### 1. Introduction ........................................................................................................

### 1. Introduction

### Contents overview
- Section headings and page references in the source:
  - 1. Introduction ....................................................................................................................................................... 3
  - 2. Data ................................................................................................................................................................... 9
  - 3. Stylized Facts .................................................................................................................................................. 11
  - 4. Methodology  ................................................................................................................................................... 17
  - 5. Results ............................................................................................................................................................ 19
  - 6. Conclusion ...................................................................................................................................................... 26
  - Appendix ............................................................................................................................................................. 28
  - References .......................................................................................................................................................... 34

### Figures listed in the source
- Figure 1: Gender discriminatory laws .................................................................................................................. 14
- Figure 2: Gender discriminatory laws in different regions ................................................................................... 15
- Figure 3: Correlation between law indicators ...................................................................................................... 15
- Figure 4: Legal gender equality and income convergence ................................................................................. 16
- Figure A1: Gap between different percentiles of the WBL index ........................................................................ 31

### Tables listed in the source
- Table 1: Main results  .......................................................................................................................................... 20
- Table 2: Control variables ................................................................................................................................... 21
- Table 3: Alternative explanations ........................................................................................................................ 22
- Table 4: Alternative definitions of the law score .................................................................................................. 23
- Table 5: Additional checks .................................................................................................................................. 24
- Table 6: Excluding an indicator of gender discriminatory laws at a time ............................................................. 25
- Table 7: Different indicators of gender discriminatory laws ................................................................................. 26
- Table A1: Description of the variables ................................................................................................................ 28
- Table A2: Summary statistics .............................................................................................................................. 28
- Table A3: Legal gender equality and income convergence in Africa .................................................................. 32
- Table A4: Gender equality and income convergence ......................................................................................... 33

### Document identification
- IMF WORKING PAPERS
- Legal Gender Equality as a Catalyst for Convergence
- INTERNATIONAL MONETARY FUND
- Page indicator shown: 3

*Source: wpiea2022155-print-pdf - 1. Introduction (canonical URL: https://www.imf.org/-/media/files/publications/wp/2022/english/wpiea2022155-print-pdf.pdf)*

### 1. Introduction

### 1. Introduction

### Research question and motivation
- Whether cross-country income differences narrow over time is a major question in the economics literature.
- The paper asks whether gender equality—specifically legal gender equality—plays a role in bridging income differences across countries.
- Rationale: ensuring a level playing field for women can help poorer economies reach their potential and catch up with living standards in richer countries.

### Gender inequality: scope and economic relevance
- Women account for half of the world’s working-age population, but constitute only about a third of the labor force globally.
- About 700 million fewer women relative to men are in paid employment.
- When paid, women tend to be employed in less secure jobs with limited career prospects, poorer work conditions, and lower pay.
- Women’s inclusion in activities from financial market participation to asset ownership remains much more limited compared to men.
- Gender inequality is both a human rights issue and an economic phenomenon: removing barriers to women’s economic inclusion can yield large gains.
- Recent studies estimate that the economic boost can be larger than a quarter of GDP for many developing economies if existing barriers are eliminated.

### Mechanisms linking gender equality to growth and convergence
- Gender equality fosters economic growth via multiple channels:
  - Productivity growth (extensive and intensive margins).
  - Female labor force participation and a larger talent pool.
  - Accumulation of human capital and intergenerational investment (working women investing more in education, food, health of children).
  - Greater efficiency of labor market allocation, entrepreneurship and innovation, economic diversification, reduced income inequality, enhanced financial stability, improved competitiveness, and mitigation of demographic shift effects.
- In the Solow model context, the rate of convergence (휆) is an increasing function of the rate of change of “labor-augmenting productivity”: 휆 = (푛+ℎ+훿)(1−훼), where 푛 is the growth rate of population, ℎ is the growth rate of labor-augmenting productivity, 훿 is the depreciation rate of physical capital, and 훼 is the elasticity of output to physical capital.
- Legal constraints that discriminate on the basis of gender can block these channels by limiting women’s labor force entry, occupation choice, entrepreneurship, asset ownership, and access to credit.

### Focus on legal gender equality and measurement
- The analysis focuses on gender discrimination in law as a visible and potentially actionable bottleneck for gender equality.
- Data source: World Bank’s Women, Business and the Law (WBL) database.
- WBL captures inequalities in domestic laws and regulations throughout women’s work life across eight aspects:
  - (i) mobility, (ii) protection in the workplace, (iii) pay, (iv) marriage, (v) parenthood, (vi) entrepreneurship, (vii) ownership of assets, and (viii) pension system.
- These areas cover legal constraints that affect labor force entry, pay parity, parenthood-related treatment, entrepreneurial obstacles, asset ownership and inheritance, and retirement benefits.

### Stylized facts on legal reform progress
- Remarkable global progress toward legal gender equality over the last five decades, albeit uneven across countries and legal domains.
- Globally, on average, women had about half of the rights that men had in 1970, whereas this reached around three quarters in 2019.
- The ratio is lower for laws related to pay, parenthood, and pension.
- Cross-country gaps in gender-discriminatory laws have persisted and even widened; some countries still have women with less than half of the legal rights relative to men.

### Empirical findings on legal gender equality and convergence
- Using a global sample over five decades, greater legal gender equality is associated with stronger income convergence across countries.
- Magnitude example:
  - For a country with a 50% lower GDP per capita relative to peers initially, moving from the 25th to the 75th percentile of the sample (i.e., making progress toward gender equality by about a quarter) raises the growth rate of its per capita income by 0.3 percentage points per annum on average during the subsequent five-year period.
  - In Sub-Saharan Africa, where average GDP per capita during the 2010s stood at about one fourth of that of the countries in Europe & Central Asia, the same amount of progress regarding legal gender equality could lead to around 0.4 percentage points higher per capita GDP growth in annual terms via stronger convergence forces.
- Legal domains particularly important for income convergence: workplace, pay, marriage, parenthood, and pension laws.
- The paper stresses interlinkages and spillovers across legal dimensions: progress must be holistic (e.g., mobility restrictions can undermine workplace protections).

### Policy implications and relevance in the post-pandemic period
- Reforms that eliminate gender bias in the law can catalyze convergence, helping poorer countries catch up with richer ones through stronger growth.
- The Covid-19 crisis has caused a large global downturn and appears to exacerbate cross-country income gaps and within-country gender imbalances.
- Reforming gender-discriminatory laws offers a window of opportunity for less developed countries to mitigate scarring effects of the Covid-19 shock and to alleviate pandemic-induced gender inequities, supporting inclusive, resilient, and sustainable growth.

### Caveats and complementarities
- De jure legal changes may not immediately translate into de facto improvements because social norms and cultural attitudes also shape outcomes and can take longer to change.
- The legal environment can serve as a backstop and a trigger for changes in informal codes.
- Legal reforms are one element of a broader strategy; progress in education, health, and financial services is also crucial and can influence translation of legal reforms into outcomes.
- The pace and feasibility of legal reforms vary by country because of legal system complexity, institutional arrangements, and traditions.

### Contribution to the literature
- The paper extends literature on gender equality and growth by examining not just whether gender equality explains current cross-country income levels, but whether it shapes the evolution of cross-country income differences over time—i.e., whether legal gender equality acts as a catalyst for convergence.
- It also contributes to the convergence literature by showing that gender-equal laws strengthen the convergence process.

*Source: IMF Working Paper — 1. Introduction (wpiea2022155-print-pdf)*

### Section  3 illustrates  the  stylized  facts. Section  4 introduces  the  empirical  methodology. Section  5

### wpiea2022155-print-pdf - Section  3 illustrates  the  stylized  facts. Section  4 introduces  the  empirical  methodology. Section  5

### Data
- Data sources and indices
  - Gender discriminatory laws: World Bank’s Women, Business and the Law (WBL) database (since 1970) covering eight indicators: (i) mobility, (ii) workplace, (iii) pay, (iv) marriage, (v) parenthood, (vi) entrepreneurship, (vii) ownership of assets, and (viii) pension system.
  - Macroeconomic controls: World Bank’s World Development Indicators (WDI) — real per capita GDP (constant in 2015 US dollars, used in logarithm), exports as a share of GDP, inflation based on GDP deflator, government expenditure as a share of GDP.
  - Capital account openness: Chinn and Ito (2006) index (range: -2 to 2).
  - Financial development: IMF index (range: 0 to 100).
  - Institutional quality: constraints on executives from Polity V (range: 0 to 7).
  - Alternative gender-equality proxy: adolescent fertility rate (the number of births per 10000 women ages 15-19) from WDI.
- Construction of WBL scores
  - Each of the eight WBL indicators is based on 4 or 5 binary (Yes/No) questions; answers implying gender equality add 25 (for 4-question indicators) or 20 (for 5-question indicators) points.
  - Each indicator ranges between 0 and 100; the unweighted average of the eight indicators yields the overall law score (WBL index), scaled between 0 and 100.
  - Interpretation examples: WBL index = 50 means women, on average, have half of the economic rights that men have; WBL index = 100 indicates perfect equality.
- Caveats of WBL measures (as noted in text)
  - Binary answers may miss borderline situations and partial reforms.
  - Standardized assumptions ensure comparability but may narrow scope on some questions.
  - Focuses on general population; does not capture restrictions on women in minority groups.
  - Covers legal barriers centered on work life; does not cover other laws (e.g., girls’ education, marriage age).
  - Does not capture de facto constraints, cultural and social norms, enforcement, and interpretation of laws.
- Sample and timing
  - Country coverage: advanced, emerging market and developing economies (see Appendix for country list).
  - Period: 1970 to 2019.
  - Data transformed into ten non-overlapping 5-year periods: 1971-1975, 1976-1980, ..., 2011-2015, and 2016-2019 (last period consists of four years).
  - Dependent variable: average growth of real per capita GDP calculated within each 5-year period (in percentage points).
  - All country-period observations are included.

### Stylized facts on gender discriminatory laws and their relationship with income convergence
- Global trends in legal gender equality
  - Mean WBL index increased to about 76 in 2019, from 46 in 1970.
  - Despite progress, WBL index is far from 100 as of 2019, indicating remaining unequal treatment in law.
- Indicator-level starting points and progress
  - Mobility indicator: started from 76 in 1970 (lowest level of legal inequality relative to other indicators); modest progress since.
  - Workplace and parenthood indicators: started from levels below 20 in 1970, implying pervasive legal barriers; both advanced over time, with workplace-related laws accelerating during the 2000s.
  - As of 2019: workplace-related laws give women slightly more than three-quarters of the rights men have; parenthood-related laws give women around half of the rights men have.
- Reform waves and frequency
  - Two waves of legal reforms globally: during the 1990s and the 2000s.
  - Over 1970-2019, an average country in the sample experienced around 10 reforms.
- Cross-country dispersion and percentiles
  - Advances concentrated on upper percentiles; lower percentiles remained relatively stable, implying large and widening gaps across countries.
  - Standard deviation of the WBL index increased by a large 46% between 1970 and 2014 and declined by only 6% over 2015-2019.
  - Distribution shift examples: there exist 113 countries in 2019 in which women have at least 75% of the economic rights that men have, while this was zero in 1970. In 19 countries this ratio is lower than 50% as of 2019, whereas this was the case for 105 countries in 1970.
- Regional patterns
  - High-Income OECD region: average law score around 56% in 1970, increased to 95 as of 2019.
  - Middle East and North Africa region: average WBL index 31 in 1970, reached 49 as of 2019.
  - Sub-Saharan Africa: WBL index jumped from 38 in 1970 to 71 in 2019.
  - Cross-country dispersion within regions widened except in the High-Income OECD region (where gaps narrowed over time, particularly with reforms during the 2000s).
- Pairwise correlations among indicators
  - Pension score generally has the lowest correlation with other indicators.
  - Workplace indicator has the highest correlation with the rest of the indicators.
  - Marriage indicator has a relatively high correlation (above 0.6) with mobility and assets indicators.
- Association between legal gender equality and income convergence (exploratory)
  - Method: divide sample into two subsamples based on median beginning-of-period WBL index; regress per capita GDP growth on country and period fixed effects to obtain residual growth rates; report correlation between initial per capita GDP and subsequent 5-year growth.
  - Correlations observed:
    - Subsample with WBL index below median: correlation between initial per capita GDP and subsequent growth ≈ -0.04.
    - Subsample with WBL index above median: correlation ≈ -0.20.
  - Interpretation: stronger negative correlation in more gender-equal legal environments suggests legal gender equality likely facilitates income convergence (poorer economies tend to grow faster relative to richer ones where laws are more gender-equal).

### Methodology
- Objective
  - Examine whether legal gender equality is associated with stronger income convergence across countries over time.
- Data transformation
  - Annual data transformed into non-overlapping 5-year periods (standard practice in convergence literature). Note: results also shown for non-overlapping 10-year periods and annual frequency (mentioned).
- Baseline specification (structure and variables)
  - Dependent variable: ΔGDP per capita_{c,t} = average annual change of real per capita GDP over the period starting at year t (average annual growth between years t+1 and t+5).
  - Initial level: GDP per capita_{c,t} = beginning-of-period real per capita GDP in logarithm.
  - Law score: Law score_{c,t} measured at beginning of period; higher values mean more gender-equal laws.
  - Fixed effects: θ_c (country) and γ_t (time) control for time-invariant country features and common period shocks.
  - Standard errors: clustered at the country level.
- Core empirical equation (concept)
  - ΔGDP per capita_{c,t} = β1 GDP per capita_{c,t} + β2 (GDP per capita_{c,t} × Law score_{c,t}) + β3 Law score_{c,t} + θ_c + γ_t + e_{c,t}
  - Interpretation of coefficients:
    - β1 (in absence of interaction) captures unconditional convergence: β1 negative ⇒ convergence; β1 ≈ 0 ⇒ no narrowing; β1 > 0 ⇒ divergence.
    - With interaction, convergence parameter λ_{c,t} = β1 + β2 Law score_{c,t}. Convergence across countries occurs iff λ_{c,t} is negative.
    - Cases:
      - β1 negative and β2 negative: convergence present and pace increases with higher law score (more gender-equal laws promote convergence).
      - β2 ≈ 0: convergence not affected by gender discriminatory laws.
      - β2 positive: more gender-equal laws weaken convergence; depending on sizes, convergence may disappear or reverse as law score increases.
    - β3 captures the direct effect of legal gender equality on growth (expected β3 positive, though not the main focus).
- Extensions
  - Conditional convergence with controls:
    - Add beginning-of-period macroeconomic or institutional variables X_{c,t}:
      - ΔGDP per capita_{c,t} = β1 GDP per capita_{c,t} + β2 (GDP per capita_{c,t} × Law score_{c,t}) + β3 Law score_{c,t} + β4 X_{c,t} + θ_c + γ_t + e_{c,t}
  - Allow X_{c,t} to affect convergence heterogeneously by including interaction terms:
    - ΔGDP per capita_{c,t} = β1 GDP per capita_{c,t} + β2 (GDP per capita_{c,t} × Law score_{c,t}) + β3 Law score_{c,t} + β4 X_{c,t} + β5 (GDP per capita_{c,t} × X_{c,t}) + θ_c + γ_t + e_{c,t}
- Identification and timing
  - Law score and other beginning-of-period variables are measured at start of each period to mitigate reverse causality concerns (future growth unlikely to affect past legal reforms).

*Italic: IMF WORKING PAPERS — Legal Gender Equality as a Catalyst for Convergence*

### 5. Results

### 5. Results

### 5.1. Main results
- Evidence of conditional convergence (훽-convergence): the coefficient estimate of initial per capita GDP (GDP per capita) is negative and statistically significant at the 1% level.
- Legal gender equality strengthens convergence:
  - Interaction term GDP per capita x Law score (훽2) is negative and statistically significant at the 1% level, implying the estimated convergence parameter (휆c,t) is always negative and becomes larger in size as the law score increases.
- Economic magnitude (based on 5-year periods, first column Table 1):
  - Moving from the 25th to the 75th percentile of the law score (47 to 73) implies Δ휆75th−25th = (73−47)×0.02 = 0.5.
  - For a country initially at 50% lower GDP per capita relative to peers, climbing from the 25th to the 75th percentile in law score raises per capita income growth by 0.3 percentage points per annum (0.5 ×50%), on average over the subsequent five-year period.
  - Example for Sub-Saharan Africa: average GDP per capita during the 2010s was about 27% of that of Europe & Central Asia (i.e. 73% lower). A quarter improvement in the WBL index could lead to about 0.4 percentage points higher per capita GDP growth in annual terms, corresponding to almost half of the average per capita GDP growth in Sub-Saharan Africa (1.1 percentage points) over the sample period.
- Direct effect of legal gender equality on income:
  - Law score coefficient is positive and statistically significant, indicating abolishing laws that deprive women of equal economic rights is associated with higher growth in the medium term; the positive catalyst role studied is above and beyond this direct effect.
- Table 1 (main coefficients; standard errors in parentheses):
  - 5-year periods:
    - GDP per capita: -3.08*** (0.60)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: 0.17*** (0.05)
    - R-squared: 0.37; Countries: 182; Observations: 1536
  - 10-year periods:
    - GDP per capita: -3.25*** (0.52)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: 0.15*** (0.04)
    - R-squared: 0.56; Countries: 180; Observations: 751
  - Annual frequency:
    - GDP per capita: -1.86*** (0.66)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: 0.19*** (0.05)
    - R-squared: 0.15; Countries: 185; Observations: 7615

### 5.2. Control variables
- Role of legal gender equality in convergence remains when controlling for country-specific time-varying factors (Table 2). Results are similar across controls.
- Controls with positive association to growth: financial openness, financial development, exports.
- Table 2 (selected coefficients; standard errors in parentheses):
  - GDP per capita (across columns): -2.69*** (0.50) to -3.94*** (0.87)
  - GDP per capita x Law score: -0.02*** (0.01) to -0.04*** (0.01)
  - Law score: 0.12*** (0.04) to 0.34*** (0.07)
  - Control variable coefficients (examples): 0.24** (0.11); 0.03** (0.02); 0.02** (0.01)
  - R-squared range: 0.40 to 0.43
  - Countries range: 157 to 182; Observations range: 1265 to 1485
- Robustness notes:
  - Findings stay similar when all controls are included together (sample shrinks) and when other macro variables (FDI inflows, current account balance, overall trade, imports, population size, government education expenditure, violent domestic conflict episodes, proxy for income inequality) are controlled for.

### 5.3. Alternative explanations
- Concern tested: whether law score proxies for other factors affecting convergence (e.g., financial openness).
- Using specification in equation 3 (Table 3), the catalyst role of legal gender equality in income convergence remains significant after including competing channels.
- Among competing factors:
  - Financial development contributes to convergence.
  - Inflation has the opposite role (reduces convergence).
- Table 3 (selected coefficients; standard errors in parentheses):
  - GDP per capita: -2.84*** (0.54) to -3.94*** (0.87)
  - GDP per capita x Law score: -0.02*** (0.01) to -0.01** (0.01)
  - Law score: 0.11** (0.05) to 0.15** (0.07)
  - GDP per capita x Control examples: -0.08 (0.09); -0.05*** (0.01); 0.00*** (0.00)
  - Control examples: 0.88 (0.77); 0.45*** (0.09); -0.01*** (0.00)
  - R-squared range: 0.40 to 0.44; Countries range: 157 to 173; Observations range: 1265 to 1485

### 5.4. Other tests (robustness checks)
- Alternative definitions and sample restrictions leave main result intact.
- Table 4: alternative law score definitions
  - Ratio of number of questions (0–1 scale):
    - GDP per capita: -3.07*** (0.60)
    - GDP per capita x Law score: -1.77*** (0.50)
    - Law score: 16.85*** (4.69)
    - R-squared: 0.37; Countries: 182; Observations: 1536
  - Cumulative change since 1970:
    - GDP per capita: -4.40*** (0.58)
    - GDP per capita x Law score: -0.03*** (0.01)
    - Law score: 0.26*** (0.06)
    - R-squared: 0.41; Countries: 182; Observations: 1431
- Table 5: additional checks
  - Dropping extremes:
    - GDP per capita: -3.13*** (0.64)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: 0.16*** (0.05)
    - Countries: 164; Observations: 1410; R-squared: 0.37
  - Weighted (weights = real GDP averaged over sample):
    - GDP per capita: -2.93*** (0.64)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: 0.17*** (0.05)
    - Countries: 182; Observations: 1536; R-squared: 0.37
  - Dropping advanced economies (AEs):
    - GDP per capita: -3.08*** (0.68)
    - GDP per capita x Law score: -0.02** (0.01)
    - Law score: 0.17** (0.07)
    - Countries: 146; Observations: 1241; R-squared: 0.36
  - Adding country-specific time trends:
    - GDP per capita: -9.10*** (1.27)
    - GDP per capita x Law score: -0.05*** (0.02)
    - Law score: 0.44*** (0.13)
    - Countries: 182; Observations: 1536; R-squared: 0.60
  - Distance to the US specification (drop US from sample):
    - GDP per capita: -2.86*** (0.61)
    - GDP per capita x Law score: -0.02*** (0.01)
    - Law score: -0.03 (0.02)
    - Countries: 181; Observations: 1526; R-squared: 0.40
- Additional robustness checks reported:
  - Winsorizing law score and GDP growth rate at 5th-95th percentiles.
  - Dropping smallest and/or largest economies by GDP percentile.
  - Excluding poorest and/or richest economies by per capita GDP percentile.
  - Weighting with population averaged over sample period instead of GDP.
  - Dropping one region at a time.
  - Starting analysis from later periods (e.g., 1980s or 1990s).
  - Excluding last period with four years of data.
  - Non-clustered standard errors.
  - Appendix Table A3: convergence within Sub-Saharan Africa shows similar role for legal gender equality.
  - Appendix Table A4: lower adolescent fertility rate (inverse proxy for gender equality) is also related to stronger income convergence.

### 5.5. Different indicators of gender discriminatory laws
- WBL index is an unweighted average of eight indicators: mobility, workplace, pay, marriage, parenthood, entrepreneurship, ownership of assets, pension.
- Excluding one indicator at a time (Table 6) does not materially change the positive role of gender-equal laws in convergence:
  - Across exclusions, GDP per capita coefficients are around -3.11 to -3.23 (***), GDP per capita x Law score: -0.02*** (0.01), Law score: 0.14*** to 0.18***.
  - Countries: 182; Observations: 1536; R-squared: 0.37 in all columns.
- Using individual indicators (Table 7) identifies which dimensions are particularly relevant:
  - Significant GDP per capita x Law score interaction (convergence effect) observed for:
    - Workplace: -0.01*** (0.00)
    - Pay: -0.01*** (0.00)
    - Marriage: -0.01* (0.01)
    - Parent: -0.02*** (0.00)
    - Pension: -0.01*** (0.00)
  - Individual indicator law score coefficients (examples):
    - Workplace: 0.07*** (0.02)
    - Pay: 0.11*** (0.03)
    - Parent: 0.15*** (0.04)
    - Pension: 0.13*** (0.04)
  - Other indicators (Entrepreneur, Asset, Mobility) show weaker or statistically insignificant interaction effects in these single-indicator specifications.
  - Caution: single-indicator analysis ignores complementarities between indicators (e.g., mobility constraints can limit the effectiveness of workplace or entrepreneurship reforms). Findings do not imply some aspects are unimportant; a holistic reform approach is recommended.
- Table 7 summary (selected figures; standard errors in parentheses):
  - Mobility:
    - GDP per capita: -5.13*** (0.89)
    - GDP per capita x Law score: -0.01 (0.01)
    - Law score: 0.10 (0.09)
  - Workplace:
    - GDP per capita: -3.75*** (0.52)
    - GDP per capita x Law score: -0.01*** (0.00)
    - Law score: 0.07*** (0.02)
  - Pay:
    - GDP per capita: -3.55*** (0.60)
    - GDP per capita x Law score: -0.01*** (0.00)
    - Law score: 0.11*** (0.03)
  - Marriage:
    - GDP per capita: -3.59*** (0.52)
    - GDP per capita x Law score: -0.01* (0.01)
    - Law score: 0.08 (0.05)
  - Parent:
    - GDP per capita: -3.66*** (0.50)
    - GDP per capita x Law score: -0.02*** (0.00)
    - Law score: 0.15*** (0.04)
  - Entrepreneur:
    - GDP per capita: -4.01*** (0.46)
    - GDP per capita x Law score: -0.00 (0.00)
    - Law score: 0.01 (0.03)
  - Asset:
    - GDP per capita: -3.69*** (0.57)
    - GDP per capita x Law score: -0.01 (0.00)
    - Law score: 0.04 (0.04)
  - Pension:
    - GDP per capita: -3.22*** (0.61)
    - GDP per capita x Law score: -0.01*** (0.00)
    - Law score: 0.13*** (0.04)
- Overall interpretation: legal gender equality acts as a catalyst for income convergence across countries; reforms across multiple legal domains are important due to complementarities among law dimensions.

*IMF staff estimates, based on the results reported in Section 5 of the source PDF.*

### 6. Conclusion

### 6. Conclusion

### Main findings
- Gender equality is both a major development goal and an imperative economic issue.
- One of the most salient barriers to gender equality is discrimination in the law, which is potentially actionable in the shorter term.
- There has been remarkable progress in abolishing gender-based legal discrimination over the last five decades, but the playing field is still far from level.
- Laws sidelining women remain in place, impeding the realization of gender equality and leaving women economically disadvantaged.
- Cross-country gaps in discriminatory laws have persisted, and even widened since the 1970s.
- While some countries have significantly moved toward gender equality through legal reforms, ensuring equal economic opportunities for women in the law seems elusive in many countries around the globe.
- Analysis over the last fifty years shows that more gender-equal laws facilitate income convergence across countries over time, thereby mitigating income inequality across countries.
- The results point to large economic gains from moving toward legal gender equality through the convergence channel and imply that legal reforms supportive of gender equality can help poorer countries catch up with the living standards in the advanced economies.

### Policy implications and recommendations
- The removal of prevalent legal barriers to women’s economic inclusion can allow women to fulfill their true potential and help countries leap forward in the process of economic development.
- These findings call for action: countries should strive to reform gender discriminatory laws with a view to guaranteeing legal equality for women in all dimensions.
- Such legal reforms can play a role in bridging existing cross-country income gaps over the longer term.

### Post-Covid-19 considerations
- The pandemic likely had scarring effects on economic growth, exacerbated cross-country income differences, and deepened gender imbalances within countries.
- To mitigate the adverse effects of the pandemic on income convergence and gender outcomes, countries should prioritize reforming gender discriminatory laws.

*IMF WORKING PAPERS Legal Gender Equality as a Catalyst for Convergence — 6. Conclusion*

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*Legal Gender Equality as a Catalyst for Convergence Working Paper No. WP/2022/155*

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_Source: https://www.imf.org/-/media/files/publications/wp/2022/english/wpiea2022155-print-pdf.pdf_