## _wp06233 ## Source details **Canonical URL:** [_wp06233](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06233.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06233.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06233.pdf.json) --- ### Introduction and purpose - Purpose: assess the relevance of gender differences to macroeconomic policy. - Approach: examines theoretical models and empirical studies from developing and developed countries. - Concludes with implications for the International Monetary Fund (IMF). ### Context and background - "Gender" defined as socially constituted roles and socially learned behaviors and expectations associated with females and males (World Bank (2001) p. 34). - Historical focus: IMF- and World Bank-supported structural adjustment program literature tended to analyze population-wide impacts rather than differential gender effects. - Much prior research emphasized short-term budget austerity impacts on gender with less attention to medium- or long-term effects. ### Key empirical and conceptual observations - Household spending patterns depend on the share of resources controlled by women or men; women in control spend more on basic necessities and children’s development. - Gender disparities are often greatest in the poorest families and in the poorest countries. - Societies that increase women’s access to education, health care, employment, and credit and narrow economic opportunity gaps tend to increase the pace of economic development and reduce poverty (evidence summarized from World Bank (2001) and others), though further study is required. ### Main findings - Systematic gender-based behavioral differences can influence macro variables: aggregate consumption, savings, investment, risk-taking, public choice, and the scope of government. - Consumption: - Women tend to devote a larger share of household resources to basic requirements and children’s potential. - Two evidence strands: (1) women prioritize spending on children’s human capital (education, food, health); (2) men and women may have different spending preferences for male vs female children, varying widely across cultures. - Savings, investment, and risk: - Women tend to have a higher propensity to save and to invest productively and show greater caution in savings and investment behavior. - Evidence examples: - Seguino and Floro (2003): raising women’s share of employment by one percentage point increases aggregate saving by roughly a quarter percentage point. - Razavi (1996): findings from Vietnam showing, independent of income, women have lower saving ratios than men. - Floro (2001): evidence that poor women, particularly in informal savings groups, may have a stronger propensity to save than men. - Political economy: - Women’s political empowerment may increase demand for public forms of social insurance and lead to a larger overall role for government (evidence from suffrage studies and public spending analyses). - Simultaneity: - Women’s lack of education, health care, and economic opportunities inhibits growth; conversely, economic growth reduces women’s subordinated condition. - Trade and employment: - Growth of export-oriented industries (supported by trade and financial liberalization) has stimulated growth and increased female employment in many contexts. - Structural adjustment program literature: - Findings that programs ignored women’s hardships are mostly based on 1980s case studies; recent program design changes emphasize social concerns and some recent studies show narrowing gender differences in key indicators. ### Analytical foundations and modeling implications - Microeconomic theory supports incorporating gender differences into macroeconomic models: household composition and intra-household resource distribution influence consumption, savings, investment, risk-taking, and labor supply. - Earlier unitary household models have been extended to multiple decision-makers and household production frameworks. - Policy implication at household level: subsidies or tax preferences targeted to particular household members may have differential impacts depending on women’s labor market participation and constraints. ### Evidence gaps and literature limitations - The literature linking gender differences to macro outcomes is smaller and more fragmented than the gender-and-development literature. - Two noted incompletenesses: - Macro analyses do not always fully use microeconomic evidence. - Gender-focused literature is somewhat disjointed from broader macroeconomics literature. - Need for reexamination of structural adjustment program effects with improved methodologies, better gender-disaggregated data, and focus on least developed countries and the poorest families. ### Consumption behavior — detailed implications - Consumption is the largest component of aggregate demand; permanent income/life-cycle theory links fiscal policy to consumption behavior. - Female-biased returns to education and health imply: - Relative price increases for education disproportionately reduce female access; price decreases disproportionately benefit females. - An overvalued exchange rate can raise the relative price of domestic goods and services (including education), harming female access. - Higher income elasticity of demand for female education and health means prosperity disproportionately benefits females; recessions disproportionately harm females. - Aggregate effects of women’s control of resources: - Increased spending on human capital and greater stability of aggregate demand because necessities are less responsive to income variations (Bils and Klenow, 1998). - Policies improving women’s control over household spending should strengthen macro growth and stability. ### Risk preferences, risk pooling, and credit access - Risk aversion: - Developed-country evidence shows single women are more risk averse and allocate retirement funds to less risky assets. - Comparable wealth/investment data for developing countries are limited. - Risk pooling and social networks: - Ghana evidence: women pool risk with other women in the village; men pool with a wider group including clan and outsiders. - Microcredit: - Rapid growth in microcredit targeted to women (Grameen-type): improving women’s access to credit enables improved living standards. - Women have superior credit repayment records relative to men; lending to women has greater effects on household welfare in cited studies. - Implication: increasing women’s access to credit can redirect consumption, saving, and investment toward more productive uses and strengthen growth. ### Public choice and government size - Evidence suggests women’s empowerment correlates with increased redistributive spending and a larger government role; effects on growth are ambiguous: - Lott and Kenny (1999): suffrage coincided with immediate increases in state government expenditures and revenues (1870-1940). - Abrams and Settle (1999): in Swiss data, extending franchise to women stimulated growth in redistributive spending and total spending. - Saidel and Loscocco (2005): working in redistributive agencies shapes whether the head pursues women-centered policies, complicating gender-attribution. ### Growth theory and gender interaction - Endogenous growth models highlight human capital accumulation as a growth determinant; female education and human capital have important externalities. - Empirical findings: - Knowles, Lorgelly, and Owen (2002): female education has a positive effect on GDP; a numeric fragment in the source indicates "0.37 percent" in context of education elasticities (text incomplete in source). - Studies estimate missing MDG education targets associate with "0.1-0.3 percentage points lower per capita growth rates" and worse child and nutrition outcomes. - Conceptual perspectives: - Neoclassical: development reduces gender inequalities; inequalities can hinder development. - WID: nonlinear relationship—early development may increase gender differentiation before eventual closing of gaps. - GAD: emphasizes norms, institutions, and empowerment; improvement in women’s status requires active empowerment, not just growth. ### Labor and financial markets: distributional and policy effects - Paid vs unpaid work: - Time-use studies: women have higher total work hours than men due to housework. - Omitting unpaid work understates national output; unpaid work could add as much as "one-quarter" to national output measures (Tzannatos, 1998). - Recommendation: incorporate unpaid work into national accounts and CGE models; monetize caring activities; treat labor as a produced input. - Labor markets in subsistence/informal economies: - Women concentrated in subsistence agriculture and informal markets face constraints: poorly defined property rights, transport, and market organization. - Exchange rate and structural adjustment effects can redistribute income away from women in cash-crop export scenarios; outcomes depend on women’s access to formal sector employment. - Trade, export-oriented manufacturing, and gender: - Trade liberalization expanded export-oriented manufacturing and female employment in many developing countries. - Mixed wage and employment findings: - Ozler (2000): plant-level share of women rises with sector export-to-output ratio. - Fontana and Wood (2000): tariff liberalization more beneficial in Bangladesh due to higher female share in export jobs. - Kucera and Milberg (2000): trade openness reduced female employment in some developed-country industries but raised employment in developing countries. - Studies differ on whether trade reduces or increases gender wage gaps. - Financial liberalization: - Can improve growth prospects and lending to households but may increase household vulnerability to downturns via higher debt. - Poor property rights for women reduce credit access. - Foreign direct investment and subcontracting can raise female employment through home-based and small-scale production. ### Macroeconomic instability and adjustment - Fiscal austerity: - Procyclicality: developing countries often face procyclical fiscal policy (Talvi and Vegh, 2005). - Austerity measures (removal of subsidies, higher fees, VAT increases) increase consumer prices and can disproportionately affect women and children due to women’s role in household provisioning and higher price/income responsiveness for education and health. - Examples: - Zambian health expenditure fell "16 percent between 1983 and 1985", increasing time spent caring for the sick. - Sri Lanka food-stamp reductions in the 1980s led to worse outcomes for females within poor households (Elson, 2002). - Policy implication: include protection for the most vulnerable in austerity programs; these groups are generally disproportionately female. - Labor market cyclicality: - Recessions often raise men’s unemployment faster than women’s; upturns see men’s unemployment fall faster—making unemployment and wage gaps procyclical in many contexts. - Public-sector employment tends to be less cyclical and often employs a larger share of women, providing some insulation in downturns. - Structural adjustment programs: - Mixed empirical results on gender-differentiated impacts: - World Bank (2001) study of sub-Saharan Africa: trends in gender equality similar for "adjusting" and "nonadjusting" countries; education and life expectancy indicators improved. - Rose (1995) and Buchmann (1996) find negative effects on female secondary enrollment in some contexts during adjustment. - Kraay and Van Rijckeghem (1995): short-term stabilization has negative impacts on public sector wages; medium-term structural programs associate with lower public employment but no significant wage effect. - PRGF era reforms: - PRGF (1999) increased emphasis on pro-poor and pro-growth policies, fiscal flexibility, and social safeguards. - Gupta and others (2002a): budgeted and actual public spending composition became more pro-poor and pro-growth; education and health allocations rose. - Wider IMF study (66 program countries, 1985-2000): under IMF-supported programs, education spending increased by more than 1 percentage point of GDP since the year preceding the program; health outlays increased by about ½ of 1 percentage point of GDP in low-income countries; primary school enrollment increased 0.8 percent per year and female primary school enrollment 1.2 percent per year. - Evaluations of 1990s programs found increases in poverty, asset loss, malnutrition, and shrinking middle classes in post-crisis periods; IMF programs incorporated social safety nets but did not explicitly examine gender-disaggregated effects. ### Policy-relevant implications and recommendations - Measurement and data: - Invest in gender-disaggregated data on education, health, labor participation, unpaid work, and asset access. - Modeling: - Incorporate unpaid work and intra-household allocation into macro and CGE models; monetize caring activities; disaggregate male- and female-intensive market sectors; treat labor as produced input; model time-use substitution between paid and unpaid work. - Fiscal and adjustment design: - Design fiscal and structural adjustment to avoid exacerbating gender inequalities—protect essential education and health services and include targeted social assistance when broad subsidies are removed. - Consider different, possibly more gradual, fiscal adjustment paths to offset harsher short-term effects on women. - Legal and institutional reforms: - Use program and surveillance influence to promote gender neutrality in fiscal (especially tax) and financial sector legislation; provide technical assistance to remove arbitrary discrimination against women. - Labor-market and financial policies: - Clarify property rights, improve transport and market organization, expand credit access while safeguarding against excessive household leverage, and promote labor-saving infrastructure to reduce women’s household time burden. - Trade and liberalization: - Assess sectoral employment composition; facilitate women’s entry into tradable sectors and skill upgrading to ensure inclusive gains from trade. ### Summary conclusions - Gender-based differences in behavior plausibly lead to enhanced macroeconomic stability and, under many channels, improved growth prospects, though some channels introduce ambiguous effects requiring further empirical investigation. - Policies shifting resources to women’s control can strengthen growth and moderate volatility; women are disproportionately harmed during economic stress, underscoring the need for gender-aware policy design. - There is a simultaneous relation: gender inequalities reduce growth while growth reduces gender disparities. - Distinguishing short-term from longer-run effects of macro policy and structural change is crucial for gender-sensitive outcomes. ### Areas for additional research (survey suggestions) - (i) Further macro-level study on how gender differences in behavior influence macro outcomes and whether policies can be structured to harness those differences for higher growth and stability. - (ii) Measuring and quantifying the influence of gender inequalities on growth and other markets and the simultaneous relation between gender inequalities and growth. - (iii) Systematic examination of gender-disaggregated effects of structural or other economic adjustment programs and whether changes in fiscal adjustment composition and structural measures can reduce gender inequalities and strengthen adjustment outcomes. *Excerpted and synthesized from _wp06233 (IMF working paper content unit provided in the PDF chapter/section).* ### References.............................................................................................................. ### _wp06233 - References.............................................................................................................. ### Introduction and purpose - The purpose of this review is to assess the relevance of gender differences to macroeconomic policy. - It examines insights from theoretical models and results from empirical studies, drawing on research from both developing and developed countries. - The review concludes by suggesting implications of the surveyed research for the work of the International Monetary Fund (IMF). ### Context and background - Gender has long been incorporated into economic analysis at the microeconomic level. - “Gender” refers to socially constituted roles and socially learned behaviors and expectations associated with females and males as opposed to the biological differences between them. (See World Bank (2001) p. 34.) - Past literature on IMF- and World Bank-supported structural adjustment programs has generally focused on impacts on the population as a whole rather than differential effects by gender. - Studies emphasizing differential effects on men and women often focus on short-term budget austerity impacts, with less attention to medium- or long-term effects. ### Key empirical and conceptual observations - Microeconomic evidence: Household spending patterns depend on the share of resources controlled by women or men; women in control spend more on basic necessities and their children’s development. - Gender disparities are often greatest in the poorest families within a country and across countries, in the poorest countries. - Societies that increase women’s access to education, health care, employment, and credit and that narrow differences between men and women in economic opportunities increase the pace of economic development and reduce poverty (evidence summarized from World Bank (2001) and others), though the evidence is described as not fully conclusive and requiring further study. ### Main findings (as stated in the review) - Gender-based differences in behavior that are systematic and widespread can influence macroeconomic variables, such as aggregate consumption, savings, investment, and risk-taking behavior. These differences may also influence public choice and the scope of government, which has macroeconomic feedbacks. - Gender influences consumption behavior in part through differences in behavior within the household. Women tend to devote a larger share of household resources to meeting the household’s basic requirements and to fostering their children’s potential. - Gender influences savings and investment and risk-taking behavior. Women tend to have a higher propensity to save and to invest in productive ways. They also show greater caution in their savings and investment behavior, which may often be good for poor households, though it can have mixed effects in the aggregate. - Women’s political empowerment may lead to a greater demand for public forms of social insurance and may also lead to a larger overall role for government. - There is a simultaneous relationship between women’s economic and social status and economic growth: women’s lack of education, health care, and economic and social opportunities inhibits economic growth, while economic growth leads to a reduction in women’s subordinated condition. - Growth of export-oriented industries, supported by trade and financial liberalization, has stimulated economic growth and increased employment of women, creating a beneficial relationship between export orientation, improved opportunities for women, and stronger growth. - Findings that IMF and World Bank structural adjustment programs ignored greater hardships facing women are mostly based on studies of the 1980s and rely largely on case studies rather than formal statistical analysis. Recent program design changes give greater emphasis to social concerns and some recent studies show narrowing differences in key social and economic indicators between men and women. ### Analytical foundations and modeling implications - Modern microeconomic theory provides the conceptual rationale for incorporating gender differences into macroeconomic models. - Early neoclassical paradigms treated households as single decision-making entities; subsequent work extends models to account for household production and multiple decision makers. - Household composition and intra-household distribution of resources influence consumption, savings, investment, risk-taking behavior, and labor supply. - Policy implications at the household level: subsidies or tax preferences targeted to particular household members (men or women) may have differential impacts depending on women’s labor market participation and constraints. ### Evidence gaps and literature limitations - The literature linking gender differences to macroeconomic outcomes is smaller and more fragmented than the literature on gender and development. - Two noted incompletenesses: - The literature does not always make full use of microeconomic evidence when drawing macroeconomic implications. - The gender-focused literature is somewhat disjointed from the broader macroeconomics literature, limiting mutual recognition of contributions. - There is scope for additional research, especially reexamining the effects of structural adjustment programs on gender disparities with improved methodologies and greater focus on the least developed countries and the poorest families. ### Implications for IMF work and policy recommendations - Gender differences in economic behavior may influence optimal fiscal policies. - In determining the pace and composition of fiscal adjustment, it is important to consider the potentially harsher short-term effects of economic austerity and structural adjustment measures on women to avoid exacerbating gender inequalities. - Over the medium term and long term, fiscal and structural policy measures, including those that are part of IMF-supported programs, should be designed to further reduce gender inequalities and ensure women can take full advantage of improvements in macroeconomic conditions. - The IMF may contribute to reducing gender inequalities by advocating greater gender neutrality in fiscal—especially tax—legislation—and financial sector legislation. ### Structure and supporting materials (as indexed in the source) - Tables: - 1. List of Countries Used in the Figures (page 21) - Figures (selected): - 1. Selected Fund Member Countries: Human Development Index (HDI) and Nominal GDP per capita (page 20) - 2. Selected Fund Member Countries: Gender-Related Development Index (GDI) and GDP per capita (page 23) - 3. Selected Fund Member Countries: Gender Empowerment Measure (GEM) and GDP per capita (page 24) - 4. Selected Fund Member Countries: Primary School Enrollment and GDP per capita (page 25) - 5. Selected Fund Member Countries: Secondary School Enrollment and GDP per capita (page 26) - 6. Selected Fund Member Countries: Life Expectancy at Birth and GDP per capita (page 27) - 7. Selected Fund Member Countries: Total Fertility Rate (Births per Woman) and GDP per capita (page 28) - Appendices: - I. The Role of the International Community and the Millennium Development Goals (page 51) - II. Microeconomic Evidence on Gender Differences in Behavior (page 54) *Content derived from _wp06233 - References..............................................................................................................* ### conclusions. We can thus draw some conclusions of relevance for macroeconomic policy ### conclusions. We can thus draw some conclusions of relevance for macroeconomic policy ### Consumption behavior — general - Private consumption represents the largest component of aggregate demand and understanding consumption behavior is critical to formulating meaningful macroeconomic models (Agenor and Montiel, 1996). - The main theory of consumption behavior, derived from the permanent income, life-cycle hypothesis, explicitly links the effects of fiscal policy to consumption behavior.6 - Domestic investment is a critical contributor to growth and stability. Domestic investment is financed by foreign and domestic savings. - From the perspective of external balance, the current account balance (equal to the difference between national investment and domestic savings) explicitly links savings and investment behavior—and by extension, consumption behavior—to the process of external adjustment. ### Consumption behavior — gender effects (evidence strands) - A considerable body of evidence that relies on both microeconomic and more aggregate level spending data examines the effects of gender on consumption behavior. This literature has two important strands: - One strand presents evidence that women may have a stronger preference than men for spending on goods and services that contribute to the human capital of their children, implying that within a household, women might gear spending more toward education, food, or health care for children.7 - Another strand presents evidence that women and men may have different preferences for spending on male and female children within the household. Here the differences seem to vary widely across cultures. In some cases, women may have a preference for spending relatively more on male children, while in others this tendency may be less pronounced or even reversed. As a result, price and income elasticities of demand may vary depending on the decision-making process in the household as well as the gender of the children involved. ### Consumption behavior — survey findings and implications - Blumberg (1988), World Bank (2001), and Quisumbing (2003) summarize research that has examined gender differences in consumption behavior by men and women within a household. - Blumberg surveys a number of studies, including her own, that have examined the implications for household behavior of differences in the share of men and women’s control of resources in the home. - Her study reviews evidence to show that women spend less on themselves and more on child nutrition and the family’s “basic human needs.” - She presents evidence that development efforts that rely on women’s labor but do not provide a return to that labor are more likely to suffer because women will try to allocate their efforts to tasks yielding income under their own control. - This survey draws evidence from a broad range of developing countries, including those in Latin America, sub-Saharan Africa and North Africa, and South Asia. - Bruce (1989) also cites evidence from a number of studies that women are more likely to spend household resources in ways to benefit their children, and that when they have greater *Source: _wp06233 - conclusions. We can thus draw some conclusions of relevance for macroeconomic policy* ### Appendix II presents a brief overview of the economic issues surrounding the demand for and supply of ### _wp06233 - Appendix II presents a brief overview of the economic issues surrounding the demand for and supply of ### Demand for education and health care: household bargaining and gender - Empirical evidence indicates intrahousehold bargaining matters: the unitary model of the household is rejected in multiple country studies, while the Pareto efficient collective model is not rejected. - Studies cited: - Kerala, India: children’s nutritional status directly related to the size of the mother’s income; no direct proportionality to increases in the father’s income. - Thomas (1997), Brazil: additional household income benefits children regardless of which spouse controls it, but additional income to women is more beneficial to child survival and nutrition than additional income to men; difference is highly significant. - Quisumbing and Maluccio (2003): four countries (Bangladesh, Ethiopia, Indonesia, and South Africa) — resources brought to marriage by men and women have different effects on shares spent on education; whether boys or girls benefit varies by country. - Gender differences in price and income elasticities: - Schultz (1987): using data from almost ninety countries over several decades, finds price elasticities of demand for primary and secondary enrollment and for total years of schooling are higher (in absolute value terms) for females than for males; income elasticities also higher for females than for males. - Kingdon (2005), India: finds gender bias against girls in education spending arises mainly from a greater incidence of not spending anything on girls’ education rather than differences in spending conditional on spending. - Mixed evidence from other studies: Alderman and Gertler (1997) (Pakistan), Deaton (1989) (Cote d’Ivoire and Thailand), and Glick, Saha, and Younger (2004) (several developing countries) report varying findings on discrimination in health and education by gender. ### Macroeconomic implications of female-biased returns to education and health - Key implications: - Relative price increases for education would have a disproportionately large impact on reducing female access to education; price decreases would disproportionately benefit females. - An overvalued exchange rate can, ceteris paribus, raise the relative price of domestic goods and services, including education, producing similar adverse effects on female access. - Higher income elasticity of demand for female education and health implies economic prosperity disproportionately benefits females by expanding access, while recessions disproportionately harm females. - Appropriate relative prices and sustained income growth (achieved in part through sound macroeconomic policies, including an appropriately valued exchange rate) contribute to socially beneficial investments in female education and health. ### Consumption behavior, gender control of resources, and aggregate effects - Women tend to allocate a larger share of spending toward food, medical necessities, education, and clothing. - Greater control of household spending by women: - Likely increases spending on human capital, which will ultimately affect economic growth. - Implies spending patterns will be more stable overall because necessities are less responsive to variations in income (Bils and Klenow, 1998). - Policy implication noted: policies that improve the control that women have over household spending should strengthen macroeconomic growth and stability. ### Savings, investment behavior, and gender - Theories of saving in developing countries emphasize factors like extended family structures, income uncertainty, subsistence constraints, and financial repression; these contextual factors may interact with gender to produce differential savings behavior. - Hypothesized and empirical gender differences: - Seguino and Floro (2003): women may have greater incentives to save than men because of roles as “home builders,” longer life expectancy, stronger bequest motives, and intergenerational altruism. - Differential access to financial markets may lead women to save outside formal markets; price and income effects yield ambiguous net impacts on saving. - Empirical findings: - Seguino and Floro (2003), using panel data for a group of semi-industrialized countries over the period of 1975-1995, find women’s wage share relative to men is positive and significantly related to savings; in one specification raising women’s share of employment by one percentage point increases aggregate saving by roughly a quarter percentage point. - Razavi (1996) cites findings from Vietnam showing that, independent of income, women have lower saving ratios than men. - Floro (2001) cites evidence that poor women, particularly in informal savings groups, may have a stronger propensity to save than men. - Macro implications: - Increasing women’s wage share appears to raise aggregate savings and thus facilitate investment. - Women tend to direct savings and investment in more productive ways and have stronger repayment records—beneficial for macroeconomic growth and stability. - However, evidence is limited in developing-country contexts due to data constraints. ### Risk preferences, risk pooling, and access to credit - Risk preferences: - Evidence from developed-country studies (e.g., Jianakoplos and Bernasek (1998); Bajtelsmit and VanDerhei (1997)) suggests single women exhibit more risk aversion than single men and tend to allocate retirement funds to less risky assets. - Lack of comparable wealth and investment data limits similar analysis in developing countries. - Risk pooling and social networks: - Goldstein (1999), Ghana: women tend to pool risk with other women in the village (friends), men pool with a wider group including clan and outsiders—implying gender-differentiated social insurance networks. - Access to credit and microcredit evidence: - Rapid growth in microcredit targeted to women (e.g., Grameen Bank model); evidence shows: - Improving access of women to credit enables them to improve standards of living. - Women tend to have superior credit repayment records relative to men. - Lending to women has a greater effect on household welfare than credit to male borrowers (Holt and Ribe, 1991; Khandker, Khalily, and Khan, 1995; Pitt and Khandker, 1998; Kevane and Wydick, 2001). - Implication: increasing women’s access to credit can redirect consumption, saving, and investment toward more productive uses and strengthen economic growth. ### Public choice: women’s political empowerment and government policy - Literature highlights gender as an influence on public policies and political institutions; one hypothesis is women are more likely than men to take a liberal stance favoring a larger role for government. - Evidence on suffrage and government size: - Lott and Kenny (1999): using cross-sectional time-series data over the period 1870-1940, find suffrage coincided with immediate increases in state government expenditures and revenues and more liberal voting patterns; effects expanded as more women voted. - Abrams and Settle (1999), Swiss data: extending franchise to women stimulated growth in government redistributive spending and spending overall, and had a negative effect on government consumption spending. - Lott and Kenny (1997): women raising children alone are more likely to classify themselves as liberal and support Democratic and progressive redistributive taxation. - Organizational effects: - Saidel and Loscocco (2005): working in a redistributive agency affects whether the head pursues a women-centered policy agenda regardless of the head’s gender; because women are more likely to work in redistributive agencies, gender matters but may be masked by agency choice. - Macroeconomic implication: - Women’s political empowerment may increase the size of government; if larger governments impede growth, this could harm growth while improving stability; if larger governments promote growth, the opposite would obtain—effects are ambiguous. ### Summary of macroeconomic implications and policy-relevant findings - Theoretical and empirical bases indicate gender systematically affects consumption, saving, investment, risk-taking, and public choice; these differences can aggregate to influence macroeconomic outcomes. - Stylized aggregate implications drawn from the evidence: - Improving women’s economic control of household resources likely improves the quality of spending (more on human capital) and imparts greater stability to aggregate demand. - Increasing women’s wage share tends to raise aggregate savings and facilitate investment. - Women tend to allocate savings more productively and maintain superior repayment records, supporting financial stability and growth. - Women’s relatively greater risk aversion may lead to greater stability but potentially lower returns—implying a tradeoff between stability and growth. - Women’s preference for greater public insurance/redistributive spending may increase the size of government, with ambiguous effects for growth but a likely contribution to stability. - Overall conclusion: gender-based differences in behavior plausibly lead to enhanced macroeconomic stability and, under many channels, improved growth prospects, though some channels introduce ambiguous effects that merit further empirical investigation—particularly with better developing-country micro and macro data. *Italic: Appendix II, _wp06233 - Appendix II presents a brief overview of the economic issues surrounding the demand for and supply of* ### Section II, using mainly microeconomic data. This analysis is put in the context of aggregate ### Section II, using mainly microeconomic data. This analysis is put in the context of aggregate ### Growth theory and evidence - Neoclassical growth theory relates economic growth to capital accumulation and savings. - Endogenous growth formulations extend the framework to allow for endogenous steady-state growth (Lucas, 1988; Romer, 1986). - In endogenous growth models: - The production function with capital and labor inputs does not exhibit diminishing marginal returns to capital. - An increase in the saving rate raises the growth rate per capita (contrary to the neoclassical prediction of convergence). - Endogenous steady-state growth can arise if some part of capital goods can be produced without nonreproducible factors, generating constant returns to scale. - Externalities (e.g., general knowledge available to all firms or increases in the stock of human capital) can raise other firms’ productivity. - Education and other sources of human capital accumulation are determinants of growth rates. - Financial intermediation has been introduced into endogenous growth models in several studies. - Cross-country evidence on the endogenous growth model has been examined by Levine and Renelt (1992) and Sala-i-Martin (1997). - Footnote note: See Agenor and Montiel (1996); Aghion and Howitt (1998); and Barro and Sala-i-Martin (2004) for surveys of growth theory and empirical work in this area. (Reference number in source: 13) ### Gender considerations in growth theory and empirical work - Gender disparities are found to lead to weaker economic growth and stronger economic growth leads to reduced gender disparities. - Blackden and Bhanu (1999) develop a framework viewing capital broadly to include: - Human capital (education and wealth) - Directly productive assets (labor, land, and financial services) - Social capital assets (participation in social outlets at various levels) - This broad conception aligns with modern growth theories. - Walters (1995) critiques the neoclassical framework for equating population and labor force growth without accounting for labor reproduction and maintenance, arguing that endogenous growth theory: - Opens the way for time to be incorporated into the production of labor inputs; - Recognizes education and other influences on human capital accumulation and their relationship to growth; - Allows for tradeoffs between government fiscal policies, including spending programs, and growth; - Introduces scope for income distribution via its effect on human capital investment to influence growth. - Walters emphasizes that women’s labor must be released from the reproductive sector to be treated as produced input. - Galor and Weil (1996) model fertility and its link to growth: increases in capital per worker raise women’s relative wages, which reduces fertility and further raises capital per worker, producing a transition to lower fertility and higher output growth. - Lagerlof (2003) employs a modified version of the Galor-Weil framework for European development and fertility over the past millennium. - There is a simultaneous relationship: gender inequalities affect growth, and economic development/growth alters gender inequalities by breaking down barriers to women’s work participation, reducing nonmarket labor time, and changing institutional mores. ### Perspectives on interaction of gender and growth - Neoclassical approach: economic development leads to reduction of gender inequalities and inequalities can hinder development (simultaneous interaction). - Women in Development (WID) approach (e.g., Boserup): - Proposes a nonlinear relationship between development and status of women: early development increases differentiation and discriminatory practices embedded in labor markets and property relations, but development eventually closes gaps; pace depends on “cultural” traditions. - Emphasizes women’s contributions to development and nonmarket activities. - Gender and Development (GAD) approach: - Emphasizes norms, practices, and social institutions governing gender inequality. - Distinguishes between improvements in women’s status and gender equality. - Argues improvements in gender equality cannot rest on economic and social development alone but require “empowerment” of women relative to men. - Critiques structural adjustment programs for worsening gender inequalities by ignoring vulnerable populations, including a disproportionate number of women. ### Cross-country plots and descriptive relationships (selected observations) - Sample construction note: The sample is drawn as every third country in the world (adjusted for missing data) for illustrative purposes. (Footnote number in source: 14) - Figure 1 (HDI vs log of per capita income, 2002): - Shows a clear positive and slightly nonlinear relationship between UN Human Development Index (HDI) and the natural log of per capita income. - Suggests as per capita income rises, human development also rises but at a decreasing rate. - Caveat: some component of this relationship may reflect the method of construction of the index. - Footnote: The HDI is an index constructed by the United Nations. See Stotsky (2006) and references therein. (Footnote number in source: 15) - Figures 2 and 3 (GDI and GEM vs log of per capita income, 2002): - Gender-Related Development Index (GDI) and Gender Empowerment Measure (GEM) show a clear positive and somewhat nonlinear relationship with income. - These suggest increasing income stimulates gender equality in economic and political dimensions, though methodological construction of indexes may affect results. (Footnote number in source: 16) - Figures 4–6 (single indicators vs log of per capita income, 2001/02): - Primary school female/male enrollment ratio: relatively flat relationship with some clear outliers. - Secondary school female/male enrollment ratio: slightly negative relationship, suggesting catch-up of low-income countries in female education (higher ratios in lower-income countries). - Life expectancy (female/male ratio): positive though scattered relationship; note from source that women live on average five years longer than men in developed nations, implying a positive correlation means women are more likely to achieve the biological norm in relative life expectancy. (Footnote number in source: 17) - Figure 7 (Total Fertility Rate vs log of per capita income, 2002): - Shows a negative though somewhat scattered relationship between higher fertility and per capita income. - Overall: conclusions are less clear when single-variable indicators are used but are not in contradiction with findings using UN indexes. (Footnote number in source: 18) - Sources for figures and calculations include: IMF, World Economic Outlook (WEO); UN, Human Development Report 2004; WB, World Development Indicators (WDI); and IMF staff calculations. ### The effect of gender inequalities in education, health, and social capital on economic growth - Empirical literature framework: - Regress measures of output or changes in output (generally per capita income) against explanatory variables including measures of educational attainment and health status. - Findings generally show the quality of the labor force has a consistent, stable, and strong relationship with economic growth. - These studies typically do not find that growth causes higher quality through investment in schools. - Contrasting evidence: - Bils and Klenow (2000) find the relationship between schooling and growth may also reflect growth’s impact on schooling and omitted factors related to both schooling and growth rates. - Gender-specific schooling and growth studies: - Dollar and Gatti (1999): examine gender inequalities in education and growth over five-year intervals, controlling for possible endogeneity; results vary by sample—either a positive association of female education with growth or an insignificant effect. - Knowles, Lorgelly, and Owen (2002): using a Solow-based framework, estimate the effect of male and female education on long-run or steady-state income and find that female education has a positive effect on GDP. - Partial numeric result in source (cutoff): "They find that female education has a positive effect on GDP and that a 1 percent increase in female education increases average GDP by" — (text in source is incomplete at this point). *Source: _wp06233 - Section II, using mainly microeconomic data. This analysis is put in the context of aggregate* ### 0.37 percent. In contrast, the education elasticity for males is insignificant. The positive ### IV. GENDER INEQUALITIES IN LABOR AND FINANCIAL MARKETS ### Education, growth, and gender gaps - Empirical evidence links gender inequalities—especially in education and health and social capital—to lower economic growth; reducing these disparities strengthens growth. - Specific findings cited: - An estimate that countries missing the Millennium Development Goals for education are likely to have "0.1-0.3 percentage points lower per capita growth rates, more children per woman, higher mortality of children, and higher prevalence of underweight children in the under-five group." - Baldacci and others (2004) use panel data on "120 developing countries from 1975-2000, averaged over five years" and find: - Gender equality, measured as the share of female students in primary and secondary schools, is positively and significantly associated with education capital and negatively and significantly associated with child mortality. - Both education stock and flow variables are significant; for health, only the flow variable is significant, though the stock of health has indirect effects through increasing investment. - Education and health spending have a contemporaneous effect on their respective stocks; education spending also has a lagged effect. - Governance significantly affects the connection between spending on health and education and indicators of health and education. - Income levels are positively related to education and health capital, and poor governance reduces growth through its impact on human capital and investment. - Limitations noted: - Gender inequalities are often poorly measured; improved gender-disaggregated data are needed. - Simultaneity between human capital investment decisions and economic growth requires further econometric attention. ### Social capital, governance, and productivity - Gender differences in social capital (voice and political participation) affect governance quality and, through that channel, investment and growth. - Evidence and arguments: - Degree of gender disadvantage in social capital ranges from almost none (Scandinavian countries) to near-complete (some Middle Eastern countries where women cannot vote). - Several studies conclude women tend to be less corrupt than men (Dollar, Fisman, and Gatti, 2001; World Bank, 2001), so women’s lack of voice may correlate with higher corruption and poorer institutions (Aron, 2000; Abed and Gupta, 2002; LaFramboise and Trumbic, 2003). - Blackden and Bhanu (1999) and Udry (1996) find gender inequalities reduce agricultural productivity in sub-Saharan Africa via supply responses, intra-household resource allocation, and higher time burdens of household activities; increased women’s voice would encourage investment in labor-saving infrastructure and raise productivity. ### Paid vs unpaid economy and time use - Unpaid work (household, subsistence farming, childcare, informal activities) is a substantial component of total work, especially for women and in least developed economies. - Key points: - Time-use studies indicate women have higher total work hours than men, largely due to housework (Floro, 1995; World Bank, 2001). - If properly measured, unpaid work could add as much as "one-quarter" to measures of national output (Tzannatos, 1998). - Omitting unpaid work hinders analysis of unemployment, labor supply behavior, and household decision-making. - Policy and modeling recommendations include incorporating unpaid work into national accounts and computable general equilibrium models (Fontana and van der Meulen Rodgers, 2005), disaggregating male- and female-intensive market sectors, monetizing caring activities, and treating labor as a produced input. ### Labor markets in subsistence and informal economies - Women in the lowest-income countries are often concentrated in subsistence agriculture and informal markets; constraints include poorly defined property rights, poor transport, and market organization not conducive to women’s gains (Evers and Walters, 2000). - Structural adjustment and exchange rate changes: - Collier (1988): export sector dominance by cash crops often excludes women; exchange rate depreciation that favors exports can redistribute income away from women and shift household spending away from items benefiting women and children. - Haddad and others (1995): adjustment can raise female participation if male jobs are lost, but may also increase unpaid household labor or unremunerated contributions to cash-crop production, with outcomes depending on female access to formal sector employment. - Longer-term successful adjustment and sustained growth may produce real appreciation and mitigate some short-term disadvantages for women if they can compete in labor markets. ### Trade liberalization, export-oriented manufacturing, and gender - Trade liberalization often expands export-oriented manufacturing (textiles, clothing), which in many developing countries increases female employment. - Empirical and model-based findings: - Ozler (2000, Turkey) finds plant-level share of women rises with sector export-to-output ratio; machinery investment reduces women’s share. - Fontana and Wood (2000) CGE simulations for Bangladesh and Zambia find tariff liberalization more beneficial in Bangladesh because of higher female share in export jobs. - Kucera and Milberg (2000) find trade openness led to employment declines affecting women disproportionately in some developed-country industries (textiles, apparel), but trade raised employment in developing countries. - Erturk and Darity (2000) model: increased female formal participation reduces unpaid labor inputs (potentially constraining growth) but can raise output through lower wages; net effect varies by country. - Studies on wage effects are mixed: - Black and Brainerd (2002) suggest competition through trade can reduce gender wage gaps in the U.S. in concentrated industries. - Berik, Rodgers, and Zveglich (2004) find trade openness increased gender wage gaps in Taiwan, Province of China, due to job losses for women in traditionally female-intensive industries. - Seguino (2000) notes some wage inequality in manufacturing may contribute to investment and growth with indirect benefits to women. ### Financial liberalization and gender - Financial liberalization affects women’s access to capital, employment, and vulnerability to downturns. - Findings and arguments: - Financial liberalization can improve growth prospects and enable increased lending to households, facilitating acquisition of time-saving assets (Floro and Dymski, 2000) but also increasing household vulnerability to downturns through higher debt. - Poorly defined property rights for women reduce access to credit and productive resources (Evers and Walters, 2000). - Braunstein (2000) models how social reproduction costs and women’s reservation wages influence the profitability of investment and capital flows. - Singh and Zammit (2000): variability in capital flows may differentially affect men and women depending on employment patterns; evidence on vulnerability is inconclusive. - Balakrishnan (2002): foreign direct investment and subcontracting can raise women’s employment via increased use of smaller-scale, home-based production that employs a larger proportion of women. ### Macroeconomic instability and adjustment: fiscal austerity, labor markets, and structural adjustment - Fiscal austerity - Developing countries often have limited scope for countercyclical fiscal policy; fiscal policy tends to be procyclical (Talvi and Vegh, 2005). - Forms of austerity—removal of subsidies, higher fees for government services, higher excises or VAT—increase consumer prices and can disproportionately affect women and children because women often ensure household provisioning and are more price- and income-responsive for education and health. - Cutbacks in education and health services can increase women’s unpaid time burden (e.g., Zambian health expenditure fell "16 percent between 1983 and 1985", increasing time spent caring for the sick). - Elson (2002): Sri Lanka food-stamp reductions in the 1980s led to worse outcomes for females within poor households (malnutrition, declining birth weights). - Policy implication: austerity programs should include protection for the most vulnerable, a group generally disproportionately female. - Labor market fluctuations and business cycles - Unemployment and wages show gender-differentiated cyclicality: - During recessions, men’s unemployment often rises faster than women’s; in upturns, men's unemployment falls faster, making unemployment and wage gaps procyclical in many contexts (Jacobsen, 1994; Park and Shin, 2005; Solon, Barsky, and Parker, 1994). - McIntyre and Pencavel (2004) on Brazil (1981-1999): year-to-year changes in wage levels dominate changes in wage differentials, which are relatively stable but declining. - Public-sector employment tends to be less cyclical and often employs a large share of women, providing some insulation from downturns. - Evidence from the 1990s Asian crisis: - Thailand: men’s employment fell more than women’s; unemployment remained higher for women before and after. - Indonesia: younger men and women entered paid employment as real wages fell; share of women in labor force increased but declines in hours and wages were larger for women. - Korea: loss of regular jobs for both sexes; women’s employment grew in daily work. - Overall conclusion: women’s employment can be relatively resilient in downturns; wage-gap effects are ambiguous. - Structural adjustment - Literature often finds IMF- and World Bank-supported structural adjustment programs had disproportionately harsh impacts on women, largely via austerity and labor market contraction; distinguishing crisis-driven effects from program-driven effects is difficult. - Policy recommendations from the literature include emphasizing longer-term adjustment over short-term stabilization and incorporating measures to protect the most vulnerable during adjustment so they can benefit from subsequent growth. ### Policy-relevant implications and modeling recommendations - Improve measurement: - Invest in gender-disaggregated data on education, health, labor market participation, unpaid work, and access to assets to enable refined modeling and causal inference. - Incorporate unpaid work and intra-household allocation into macro and CGE models: - Monetize caring and household activities, disaggregate male- and female-intensive sectors, treat labor as produced input, and model time-use to capture substitution between paid and unpaid work. - Design fiscal and adjustment measures with gender-aware mitigation: - Targeted social assistance when broad subsidies are removed; protect essential education and health services to avoid regressive burdens on women and children. - Consider labor-market and financial policies that expand women’s access: - Clarify property rights, improve transport and market organization, expand credit access while guarding against excessive household leverage, and promote labor-saving infrastructure that reduces women’s household time burden. - Assess trade and liberalization policies with attention to sectoral employment composition: - Facilitate women’s entry into tradable sectors and skill upgrading to ensure gains from trade are durable and inclusive. *Italic: Source — Excerpt from IMF working paper content unit provided in the PDF chapter/section.* ### conclusion is that limitations on women’s ability to participate fully in the economy may ### _wp06233 - conclusion is that limitations on women’s ability to participate fully in the economy may ### Effects of early structural adjustment on women and human capital - Early structural adjustment measures that imposed or increased fees for education and commercialized agriculture could lower the private rate of return to education relative to child labor, potentially leading to withdrawal of girls from school. - Increased demand for female labor in cash crop production could require older girls to care for younger siblings, further reducing girls' schooling. - Recommendation from Haddad and others (1995): ensure structural adjustment does not reduce the accumulation of human capital, especially by girls. Later programs have largely avoided prescriptions to raise school fees. ### Empirical findings on gender-differentiated effects of adjustment programs - World Bank (2001) study of sub-Saharan African countries (“adjusting” vs “nonadjusting”) finds trends in gender equality largely the same between groups; educational and life expectancy indicators improved; structural adjustment did not appear to have outcomes that differed significantly by gender, independent of income effects. - Forsythe, Korzeniewicz, and Durrant (2000) do not find a significant effect of a composite variable representing debt restructuring and IMF program funding on gender equality. - Rose (1995): in countries with World Bank-supported adjustment programs, a slowdown in the increase in average female combined first- and second-level gross school enrollment rates is observed between preadjustment and adjustment phases; some countries experienced absolute declines in female enrollment. For adjusting countries, reduced male enrollment led to a closing of the gender gap; for nonadjusting countries, increases in both male and female enrollment led to narrowing of the gap. - Buchmann (1996): IMF-supported structural adjustment programs led to a reduction in female secondary school enrollment but had no significant effect on male enrollment (cross-section of countries in 1987). - Kraay and Van Rijckeghem (1995): short-term stabilization programs have a negative impact on public sector wages; medium-term structural adjustment programs have a negative association with public employment but no significant effect on wages, suggesting the wage effect of short-term programs is temporary. ### IMF-supported programs and social spending (PRGF and broader program evidence) - The IMF initiated the Poverty Reduction and Growth Facility (PRGF) in 1999 to increase emphasis on pro-poor and pro-growth policies, fiscal flexibility, and better economic governance. A 2002 review summarized in Gupta and others (2002a) finds: - Composition of budgeted and actual public spending becoming more pro-poor and pro-growth. - Education and health allocations as a share of total government spending are rising. - Spending shares for rural development, road construction, primary health care, and education rose. - Programs incorporate measures to improve efficiency/targeting of spending, flexibility in fiscal goals, and improved public expenditure management. - PRGF-supported programs are expected to report on social effects of measures that could harm the poor and include countervailing measures. - Wider IMF study covering 66 program countries, including 32 low-income ones, over the period 1985-2000 finds: - Under IMF-supported programs, education spending increased by more than 1 percentage point of GDP since the year preceding the program. - Health outlays increased by about ½ of 1 percentage point of GDP in low-income countries (smaller increase in program countries as a whole). - These spending increases translate into sizable increases in spending per capita and are accompanied by improvements in education and health indicators associated with the Millennium Development Goals. - Primary school enrollment increased 0.8 percent per year and female primary school enrollment 1.2 percent per year. ### Social costs during crisis and program responses - Evaluation of major 1990s programs in Indonesia, Korea, Thailand, the Philippines, Turkey, Argentina, Mexico, and Brazil finds: - Most countries recorded increases in poverty, loss of physical assets among the poor, rising rates of malnutrition, and a shrinking middle class during the post-crisis period (Ghosh and others, 2002). - IMF-supported programs incorporated measures to bolster social safety nets: targeted transfers, improved distribution or temporary price controls on key commodities, severance pay and training for laid-off public sector workers, and civil works programs to provide employment. - These program evaluations did not explicitly examine gender-disaggregated effects. ### Survey conclusions on gender and macroeconomics - Systematic differences in behavior of men and women can lead to different macroeconomic outcomes for aggregates such as private consumption, saving, investment, and risk-taking; and can influence public choices on expenditure composition, program structure, and government size. - Women tend to devote a larger share of household resources to household-benefiting activities, are more oriented toward productive saving and investment, and are less likely to take risks. Political empowerment of women leads to support for a larger role for public insurance. - Policies that shift resources to women's control can strengthen growth and moderate economic volatility; women are disproportionately harmed during economic stress, underscoring the need for appropriate policies. - There is a simultaneous relationship between gender inequalities and economic growth: gender inequalities reduce economic growth while economic growth leads to lower gender disparities. - In subsistence-agriculture-based countries (notably some in sub-Saharan Africa), limitations on women’s opportunities can reduce the benefits of macroeconomic and structural policies; exchange rate depreciation aimed at restoring external balance can impose a relatively harsher adjustment burden on women in these settings. Where women have broader opportunities (including in export-oriented industries), exchange rate depreciation may create job opportunities that benefit women. Distinguishing short-term from longer-run effects is important—successful adjustment raising growth and stability may have beneficial long-run effects. ### Policy implications and recommendations for IMF work - Structural adjustment programs need careful design to ensure harshest effects of fiscal adjustment and labor market retrenchment are offset through well-designed social safety nets and macroeconomic policies that consider potentially harsher effects on women and vulnerable households; this may imply a different, perhaps more gradual, path of fiscal adjustment. - Recent efforts to strengthen the PRGF are critical. International financial institutions should use program and surveillance influence to encourage reduction of limitations that prevent women's full participation in markets by: - Supporting fiscal, monetary, and structural measures that ensure appropriate levels of spending on public services. - Promoting a fair tax burden that does not discourage socially worthwhile activities. - Providing technical assistance in fiscal legislation—mainly in the tax area—and financial sector legislation to remove arbitrary discrimination against women. - Specific implications for IMF work: - In macroeconomic policy, gender differences in economic behavior may influence optimal fiscal, and to a lesser extent, monetary policies. IMF programs already consider government capacity to provide adequate social safety nets, but it may be important to sharpen focus on potentially harsher short-term effects on women and ensure needed program support to avoid creating or exacerbating gender inequalities. - Over the medium and long term, policy advice should aim to reduce gender inequalities so women can take full advantage of beneficial effects of macroeconomic adjustment. - The IMF can contribute to removing arbitrary discrimination against women through technical assistance in tax and financial sector legislation. - It would be useful to take a more systematic look at gender-differentiated effects of IMF programs using data from the 1990s and early 2000 period. ### Areas for additional research suggested by the survey - (i) Further study at the macroeconomic level of how gender differences in behavior influence macroeconomic outcomes and whether macroeconomic policies can be structured to account for those differences to achieve higher growth and greater stability. - (ii) Measuring and quantifying the influence of gender inequalities on economic growth and other markets and the simultaneous relation between gender inequalities and growth. - (iii) Examining more systematically the gender-disaggregated effects of structural or other economic adjustment programs and whether changes in the composition of fiscal adjustment and other fiscal and structural policy measures can reduce gender inequalities and strengthen adjustment outcomes by avoiding austerity’s harshest effects. ### Appendix I — The Role of the International Community and the Millennium Development Goals - The international community committed to the Millennium Development Goals aimed to halve extreme poverty by 2015; these goals entail a strong commitment to gender equality as both a social objective and a contributor to key economic objectives. - Box 1: The Millennium Development Goals 1. Eradicate extreme poverty and hunger 2. Achieve universal primary education 3. Promote gender equality and empower women 4. Reduce child mortality 5. Improve maternal health 6. Combat HIV/AIDS, malaria, and other diseases 7. Ensure environmental sustainability *Source: _wp06233 - conclusion is that limitations on women’s ability to participate fully in the economy may (IMF PDF).* ### 8. Develop a global partnership for development ### 8. Develop a global partnership for development ### Goal 3: Promote Gender Equality and Empower Women - Target: Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015 - Indicators: - Ratio of girls to boys in primary, secondary, and tertiary education - Ratio of literate female to males of 15-24 year-olds - Share of women in wage employment in the non-agricultural sector - Proportion of seats held by women in national parliaments - Source: United Nations, United Nations Millennium Declaration, 2000 ### Overview of MDG gender target and breadth of indicators - The Millennium Development Goals target related to gender equality focuses mainly on eliminating gender inequalities in primary and secondary education. - The roadmap includes additional indicators of equality: literacy rates, the share of women working in nonagricultural jobs, and the proportion of seats women hold in national parliaments. - The inclusion of these indicators implies the importance of a multifaceted approach to removing gender inequalities (World Bank, Gender and Development Group, 2003). ### The role of international institutions - International institutions, governmental, and nongovernmental organizations have contributed to putting gender and poverty reduction on the development and macroeconomics agenda. - IMF: - The IMF’s direct role in this area has so far been limited. - An unpublished note (Heller and Lueth, 2003) suggests the IMF and the World Bank should make the Millennium Development Goals the key framework to underpin Poverty Reduction Strategy Papers (PRSPs) and, for the IMF, to shape Poverty Reduction and Growth Facility (PRGF)-supported programs targeted at low-income countries. - The note indicates PRSPs increasingly provide broader coverage of MDG indicators, including disaggregation by gender. - No IMF study has systematically examined the influence of IMF programs by gender to date. - World Bank: - Evaluations concluded that attention to gender enhances the Bank’s effectiveness (World Bank, 2002, p. 11). - Organizational changes in the 1990s: - Ensured more complete treatment of gender issues in Country Assistance Strategies (CASs). - Issued an Operational Policy on the gender dimension of development in 1994. - Created a Gender and Development Board and placed it within the Poverty Reduction and Economic Management Network in 1997. - The Bank works with governments, civil society, and donors to diagnose gender-related barriers to poverty reduction and sustainable development through multisector, periodic Country Gender Assessments (CGAs). - As of the end of fiscal year 2003, the Bank had prepared 25 CGAs. - The Bank has incorporated gender into sectoral analytical work and Country Assistance Strategies (CSAs), and into criteria for assessing the poverty reduction focus of PRSPs in joint staff assessments (JSAs) of the IMF and Bank and in the PRSPs themselves. - World Bank (2004, p. 11) lists good practices for integrating gender in core diagnostic sectoral analysis: - Disaggregating all available data by sex - Linking gender issues across sectors - Identifying actions to correct gender inequalities - Conducting gender analysis of the budget in the context of public expenditure reviews - Examples of PRSP integration in South Asia (World Bank, 2004, p. 16): - Bangladesh: Bank, Ministry of Women’s Affairs, and other donors facilitated a platform of gender issues to incorporate into the PRSP; used to develop an action plan and road map for the full PRSP. - Nepal: Bank influenced government to identify social inclusion as one of the four pillars of the PRSP through dialogue and provision of background analysis on gender, caste, and ethnic inequalities. - Pakistan: Bank encouraged active gender dialogue focusing on political participation, poverty reduction, and strengthening institutional mechanisms. - Sri Lanka: Bank supported a government strategy on gender within the PRSP process leading to: - Increased emphasis on protection of women’s rights - Introduction of an employment policy to promote equal training and employment opportunities for women - Continued support for entrepreneurship programs for women - Greater support for victims of gender-based violence - Specific rehabilitation programs targeting women affected by conflict - Introduction of gender sensitization programs for the public and private sectors - World Bank (2004, pp. 26-28) priority areas for implementing a gender mainstreaming strategy: - Making greater use of partnerships - Increasing attention to gender issues in core diagnostic studies - Increasing attention to gender issues in lending operations in key sectors beyond the human development sectors - Creating an enabling environment for engendering development through increased emphasis on capacity building - Moving from measuring progress largely in terms of outputs to measurement of outcomes - Adopting a plan to complete CGAs for all member countries which have an active lending program in the medium term - Other contributing institutions: - Commonwealth Secretariat - United Nations (including UNIFEM, the Division of the Advancement of Women of the Department of Economic and Social Affairs, and UNDP) - OECD - European Union ### Microeconomic evidence on gender differences in behavior — Education - Demand for education in developing-country contexts reflects price, income, and taste or culture variables; price comprises direct and indirect components of cost (Behrman, 1999; Schultz, 2002; Glick, Saha, and Younger, 2004). - Direct costs of education: - Monetary costs (e.g., uniforms, materials) may be the same or differ by gender depending on context. - Opportunity cost of time generally differs between males and females; girls often bear household care responsibilities, raising their opportunity cost of schooling. - In some countries boys also have significant opportunity costs (e.g., livestock care). - Supply of education: - Depends on availability of schools, teachers, and other facilities; public and private alternatives vary by country. - In poorer countries public spending on education may be relatively small; private alternatives are usually limited to higher-income households. - Interaction of supply, demand, and cultural considerations: - Cultural constraints can limit female access even where schools exist (e.g., need for female teachers or gender-segregated settings). - Parents’ expectations about economic returns, inheritance of daughters into spouse households, and son preference (linked to the “missing women” phenomenon) affect investment decisions. - Religious attitudes can shape parental tastes for schooling. - Credit constraints and risk aversion: - Parents may not invest efficiently if expected private returns are low, or due to risk aversion or credit constraints limiting borrowing for education (Schultz, 1995). - Social (external) benefits of female education: - Higher female education associated with better health and nutrition, longer life expectancies, reduced child mortality (Glewwe, 1999; Christiaensen and Alderman, 2004). - Female education tends to promote reduced fertility and increased parental investment in children’s human capital. - Weir and Knight (2004) find education benefits diffuse through social networks; Ethiopia survey evidence indicates most farmers were influenced in adopting modern inputs by someone of the same gender. - External benefits are hard to quantify but motivate public subsidies to reduce gender inequalities. - Empirical consensus: - Schultz (2002) concludes “mounting empirical evidence from around the world that the social returns to the years of schooling of females are greater than the returns to males....there are few instances in international quantitative social science research where the application of common statistical methods has yielded more consistent findings than in the area of gender returns to schooling.” - Regions achieving the most economic and social progress over recent decades are among those that most successfully promoted equal educational achievements for males and females. ### Microeconomic evidence on gender differences in behavior — Health care - Measuring gender inequalities in health investments is complicated by biological differences that alter nutritional requirements and health service needs (e.g., women in childbearing years generally require more health care). - General trends: - Significant advance in female longevity relative to male longevity in the twentieth century in most countries, with exceptions in some countries in South Asia. - South Asia now appears to be catching up in some respects, but the presence of “missing women” indicates gender inequalities in health still lead to excess mortality in some countries. *Source: _wp06233 - 8. Develop a global partnership for development* ### REFERENCES ### _wp06233 - REFERENCES ### Major thematic groupings in the bibliography - Gender, development, and policy-oriented analyses - Abed, George T., and Sanjeev Gupta, 2002, Governance, Corruption, and Economic Performance (Washington: International Monetary Fund). - Afshar, Haleh, and Carolyne Dennis, eds., 1992, Women and Adjustment Policies in the Third World (New York: St. Martin’s Press). - Balakrishnan, Radhika, ed., 2002, The Hidden Assembly Line: Gender Dynamics of Subcontracted Work in a Global Economy (Bloomfield, Connecticut: Kumarian Press). - Beneria, Lourdes, ed., with Savitri Bisnath, 2001, Gender and Development: Theoretical, Empirical, and Practical Approaches, vols. 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Paul, 1995, “Investments in Schooling and Health of Men and Women,” in T. Paul Schultz, ed., Investment in Women’s Human Capital (Chicago: University of Chicago Press), pp. 15-50. - Schultz, T. Paul, 2002, “Why Governments Should Invest More To Educate Girls,” World Development, Vol. 30, No.2, pp. 207-25. - Hill, M. Anne, and Elizabeth M. King, 1995, “Women’s Education and Economic Well-being,” Feminist Economics, Vol. 1, No. 2, pp. 1-26. - King, Elizabeth M., and M. Anne Hill, eds., 1993, Women’s Education in Developing Countries (Baltimore: John Hopkins University Press). - Weir, Sharada, and John Knight, 2004, “Externality Effects of Education: Dynamics of the Adoption and Diffusion of an Innovation in Rural Ethiopia,” Economic Development and Cultural Change, Vol. 53, No. 1, pp. 93-113. - Macroeconomic growth theory and cross-country growth evidence - Solow, Robert, 1956, “A Contribution to the Theory of Economic Growth,” Quarterly Journal of Economics, Vol. 70, pp. 65-94. - Romer, Paul, 1986, “Increasing Returns and Long-Run Growth,” Journal of Political Economy, Vol. 94, No. 5, pp. 1002-37. - Barro, Robert J., and Xavier Sala-i-Martin, 2004, Economic Growth, second edition (Cambridge, Massachusetts: MIT Press). - Levine, Ross, and David Renelt, 1992, “A Sensitivity Analysis of Cross-Country Growth Regressions,” American Economic Review, Vol. 82, No. 4, pp. 942-63. - Galor, Oded, and David N. Weil, 1996, “The Gender Gap, Fertility, and Growth,” American Economic Review, Vol. 86, No. 3, pp. 374-87. - Lagerlof, Nils-Peter, 2003, “Gender Equality and Long-Run Growth,” Journal of Economic Growth, Vol. 8, pp. 403-26. - Bils, Mark, and Peter J. Klenow, 2000, “Does Schooling Cause Growth?” American Economic Review, Vol. 90, No. 5, pp. 1160-83. - Sala-i-Martin, Xavier, 1997, “I Just Ran Two Million Regressions,” American Economic Review, Vol. 87, No. 2, pp. 178-83. - Fiscal, financial, and trade policy with gender implications - Eichengreen, Barry, and Michael Mussa with Giovanni Dell’Ariccia, Enrica Detragiache, Gian Maria Milesi-Ferretti, and Andrew Tweedie, 1998, Capital Account Liberalization: Theoretical and Practical Aspects, Occasional Paper 172 (Washington: International Monetary Fund). - Talvi, Ernesto, and Carlos A. Vegh, 2005, “Tax Base Variability and Procyclical Fiscal Policy in Developing Countries,” Journal of Development Economics, Vol. 78, pp. 156-90. - Tanzi, Vito, and Ludger Schuknecht, 1997, “Reconsidering the Fiscal Role of Government: The International Perspective,” American Economic Review, Vol. 87, No. 2, pp. 164-68. - Stotsky, Janet G., 1997, “Gender Bias in Tax Systems,” Tax Notes International, June 9, pp. 1913-23. - Stotsky, Janet G., 2006, “Gender Budgeting,” forthcoming International Monetary Fund Working Paper (Washington: International Monetary Fund). - Bekaert, Geert, Campbell R. Harvey, and Christian Lundblad, 2005, “Does Financial Liberalization Spur Growth?” Journal of Financial Economics, Vol. 77, pp. 3-55. - Fontana, Marzia, and Adrian Wood, 2000, “Modeling the Effects of Trade on Women, at Work and at Home,” World Development, Vol. 28, No. 7, pp. 1173-90. - Mishra, Prachi, and Utsav Kumar, 2005, “Trade Liberalization and Wage Inequality: Evidence from India,” International Monetary Fund Working Paper 05/20 (Washington: International Monetary Fund). - Household decision-making, intrahousehold allocation, and microcredit - Becker, Gary S., 1971, The Economics of Discrimination, revised edition (Chicago: University of Chicago). - Behrman, Jere, 1997, Intrahousehold Distribution and the Family, Mark R. Rosenzweig and Oded Stark, eds., Handbook of Population and Family Economics, Vol. 1A (Amsterdam: Elsevier Science), pp. 125-87. - Hoddinott, John, Harold Alderman, and Lawrence Haddad, 1997, “Testing Competing Models of Intrahousehold Allocation,” in Lawrence Haddad, John Hoddinott, and Harold Alderman, eds., Intrahousehold Resource Allocation in Developing Countries (Baltimore: Johns Hopkins University Press), pp. 129-41. - Quisumbing, Agnes R., ed., 2003, Household Decisions, Gender, and Development: A Synthesis of Recent Research (Washington: International Food Policy Research Institute). - Quisumbing, Agnes R. and John A. Maluccio, 2003, “Resources at Marriage and Intrahousehold Allocation: Evidence from Bangladesh, Ethiopia, Indonesia, and South Africa,” Oxford Bulletin of Economics and Statistics, Vol. 65, No. 3, pp. 283-327. - Pitt, Mark M., and Shahidur R. Khandker, 1998, “The Impact of Group-based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participant Matter,” Journal of Political Economy, Vol. 106, No. 5, pp. 958-96. - Goetz, Anne Marie, and Rina Sen Gupta, 1996, “Who Takes the Credit? Gender, Power, and Control Over Loan Use in Rural Credit Programs in Bangladesh,” World Development, Vol. 24, No. 2, pp. 45-63. - Methodological and measurement literature relevant to gender and macroeconomics - Deaton, Angus, 1992, Understanding Consumption (Oxford: Oxford University Press). - Bils, Mark, and Peter J. Klenow, 1998, “Using Consumer Theory to Test Competing Business Cycle Models,” Journal of Political Economy, Vol. 106, No. 2, pp. 233-61. - Solon, Gary, Robert Barsky, and Jonathan A. Parker, 1994, “Measuring the Cyclicality of Real Wages: How Important is Composition Bias?” Quarterly Journal of Eocnomics, Vol. 109, No. 1, pp. 1-25. - Vermeulen, Frederic, 2002, “Collective Household Models: Principles and Main Results,” Journal of Economic Surveys, Vol. 16, No. 4, pp. 533-64. - Seguino, Stephanie, and Maria Sagrario Floro, 2003, “Does Gender Have Any Effect on Aggregate Saving? An Empirical Analysis,” International Review of Applied Economics, Vol. 17, No. 2, pp. 147-66. ### Observations about the composition of references - Strong emphasis on gender-disaggregated inquiry across multiple domains: labor markets, education, household allocation, macroeconomic policy, trade, and finance. - Frequent use of cross-country empirical studies, country case studies, and theoretical growth models. - Inclusion of both academic journal articles and policy-oriented working papers and reports by the International Monetary Fund and World Bank. - Recurrent attention to Millennium Development Goals (MDGs), gender mainstreaming, and the gender implications of structural adjustment and fiscal policy. *References list compiled from the content unit: _wp06233 - REFERENCES* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06233.pdf_