## March 2020

## Source details

**Canonical URL:** [March 2020](https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2020.pdf)

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- [Markdown version](/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2020.pdf.md)
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### Women in the Labor Force: The Role of Fiscal Policies
- A Staff Discussion Note (SDN) by Fabrizio, Fruttero, Gurara, Kolovich, Malta, Tavares, and Tchelishvili uses two life-cycle general equilibrium models with heterogeneous agents—one calibrated for an advanced economy and another calibrated for a low-income country—to evaluate gender-responsive fiscal policies.
- Key findings from the SDN:
  - Gender-responsive fiscal policies can support female labor force participation while positively impacting economic growth and income equality, and reducing poverty, with eventually positive fiscal impact in the long run.
  - In advanced economies, switching from family-based taxation to individual-based taxation can increase female labor force participation and boost growth, while reducing gender wage gaps, poverty, and income inequality.
  - In low-income countries, providing women-friendly infrastructure can increase female labor force participation and boost growth, while reducing gender wage gaps, poverty, and income inequality.
- Launch and presentations:
  - The SDN was launched by the IMF Managing Director at the Global Women’s Forum on February 16th in Dubai.
  - The SDN was presented at the Africa Training Institute in Mauritius during the IMF workshop on gender.

### Investing in Public Infrastructure: Roads or Schools?
- Atolia, Li, Marto and Melina analyze why governments in developing economies favor roads over schools using a dynamic general equilibrium model.
- Key analytical points and findings:
  - Differences in the pace at which roads and schools contribute to economic growth, public debt intolerance, and political myopia are central to the choice between roads and schools.
  - In a thought experiment with a large return differential in favor of schools, a benevolent government would devote the majority of an investment scale-up to schools.
  - The fraction of schools chosen by the government falls with increasing levels of debt intolerance and political myopia.
  - Political myopia can explain the observed preference for roads: an extremely myopic government would not invest in schools at all.

### Using Google Data to Narrow Information Gaps for Low-income Developing Countries
- Futoshi Narita and Rujun Yin prepared research titled “In Search of Information: Use of Google Trends’ Data to Narrow Information Gaps for Low-income Developing Countries.”
- Presentation and venue:
  - The research was featured in the poster session videos at the 2020 Annual Conference of the American Economic Association (AEA) in San Diego, on January 3-5.
- Key finding:
  - Google Trends search-frequency–based data are found to be more useful in nowcasting real GDP than famous nighttime lights, demonstrating their potential to facilitate timely assessments of economic conditions in low-income developing countries (LIDCs).

### Sustainable Development, Sustainable Debt
- An IMF Conference Paper highlights questions to allow Sub-Saharan African (SSA) countries to meet development needs while safeguarding debt sustainability.
- Findings and context:
  - SSA countries have made significant socio-economic progress in the last two decades: income per capita improved; poverty rates declined; education and health outcomes expanded.
  - SSA countries are only about half-way to achieving the Sustainable Development Goals (SDGs).
  - The ability to finance development needs has become more constrained as public debt increased rapidly between 2011 and 2016, albeit stabilizing thereafter.
  - Official development assistance (ODA) has stagnated or even declined.

### SPR’s Engagement in Fiscal Policy and Inequality
- Stefania Fabrizio and Xin Tang presented SPR’s engagement on the inequality implications of fiscal policy under the DFID project at the IMF African Department Inclusive Growth Network’s peer learning workshops.
- Presentation scope and outreach:
  - Overview of SPR’s analytical and operational work on the role of fiscal policy in enhancing inclusion.
  - Coverage of the inequality toolkit developed under the DFID project, which has been applied to more than 10 country applications.
  - The toolkit drew interest from the Department of Economics at Gettysburg College, which invited Xin Tang to teach a one-day course attended by faculty members and undergraduate students. The course covered the IMF’s efforts toward inclusive growth, the toolkit’s analytical framework, and some practices.

### Gender Inclusion in Kenya
- IMF staff, in collaboration with UN Women, presented preliminary results of a forthcoming Selected Issues Paper on gender inclusion in Kenya during the 2020 Article IV Consultation mission to Kenya in February.
- Key findings:
  - Kenya has successfully closed gender gaps in access to primary and secondary education.
  - Gaps remain large in other dimensions such as tertiary education and the labor market (including earnings).
  - The paper finds important GDP and income equality gains from policies such as reducing gender disparities in the informal sector, closing education gaps between boys and girls, and reducing time spent on fetching water.

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_Source: https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/mar2020.pdf_