When Will Global Gender Gaps Close?

IMF Working Papers, September 15, 2023

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On the current pace of reforms, global gender gaps are estimated to close, using deterministic (linear or log-linear) trends, over the next three centuries.
Using Markov chains to analyze the dynamics of the cross-country distribution of the gender gap in labor force participation, the paper finds that—based on the past three decades—gender gaps are likely to narrow further over time.
However, the long-run distribution predicted by the Markov-chain analysis features a substantial share of countries with persistently large gaps, implying that—absent a strengthened and systematic policy effort—some misallocation of women’s talents and abilities could persist perpetually.

Analytical approach: Markov chains (a common approach in macroeconomics) applied to the cross-country distribution of the gender gap in labor force participation.
Rationale: This methodology does not impose strong restrictions on the data and allows for episodes of progress as well as regress by countries on gender inequality.
Comparison: Contrasts deterministic trend extrapolations (linear or log-linear) with stochastic dynamics captured by Markov-chain transitions.

Deterministic trend projection: Global gender gaps close over the next three centuries under linear or log-linear extrapolations of current reform pace.
Stochastic dynamics projection: Based on the experience of the past three decades, Markov-chain analysis predicts further narrowing of gender gaps over time but also identifies a persistent long-run tail of countries with large gender gaps.
Implication: Absent significant policy escalation, gender gaps may in fact never close for a meaningful share of countries.

Strengthen and systematize policy efforts to accelerate closing of gender gaps in labor force participation.
Target interventions to countries projected to remain in the long-run distribution tail with persistently large gaps to avoid perpetual misallocation of women’s talents and abilities.
Use flexible analytical frameworks (such as Markov chains) in monitoring to capture regressions as well as progress and to inform dynamic policy responses.

Source: IMF Working Paper "When Will Global Gender Gaps Close?" by Alejandro Badel and Rishi Goyal, September 15, 2023.