Empowering Women, Tackling Income Inequality
IMF Blog, October 22, 2015
Source details
- Canonical URL
- Empowering Women, Tackling Income Inequality
Other formats
Bibliographic details
- Authors: Sonali Jain-Chandra, Kalpana Kochhar, Monique Newiak
- Published: October 22, 2015
Overview and authors
- Title: Empowering Women, Tackling Income Inequality
- Authors: Sonali Jain-Chandra, Kalpana Kochhar, Monique Newiak
- Date: October 22, 2015
Key findings: linkage between gender inequality and income inequality
- Gender inequality is strongly associated with income inequality across time and countries of all income groups.
- Three channels linking gender inequality to higher income inequality:
- Gender wage gaps directly contribute to income inequality, and higher gaps in labor force participation rates between men and women result in inequality of earnings between sexes.
- Women are more likely to work in the informal sector, where earnings are lower, widening the gender earnings gap and exacerbating income inequality.
- Inequality of opportunities (unequal access to education, health services, and finance) between men and women is strongly associated with income inequality.
- The study analyzes the association for almost 140 countries over the last two decades.
- The study extends the United Nation’s Gender Inequality Index, which captures:
- Gender inequality in outcomes: labor force participation gap and share of female seats in parliament.
- Gender inequality in opportunity: education gaps, maternal mortality, and adolescent fertility.
- Main quantitative result: an increase in this multi-dimensional index from zero (perfect gender equality) to one (perfect gender inequality) is associated with an increase in net income inequality (as measured by the Gini coefficient) of almost 10 points.
- While results hold across development levels, the relevant dimensions differ:
- Advanced countries: income inequality arises mainly through gender gaps in labor force participation.
- Emerging markets and low-income countries: inequality of opportunity, particularly gender gaps in education and health, poses an obstacle to more equal income distribution.
Macroeconomic implications
- Greater gender equity and increasing female economic participation are associated with higher growth, more favorable development outcomes, and lower income inequality.
- Aspiring to equality of opportunities and removing legal and other obstacles that prevent women from reaching full economic participation is framed as an issue of macroeconomic relevance as well as human rights.
- A more level playing field would give women the option to become economically active should they so choose, with beneficial macroeconomic effects.
Policy recommendations (multi-pronged approach)
- Remove gender-based legal restrictions:
- Gender-related legal restrictions impede women’s economic activities in a number of countries.
- Previous work has found that equalizing laws boosts female labor force participation.
- Specifically, granting gender equity under the constitution could increase the female labor force participation by as much as 5 percent.
- Revise tax policies:
- Fiscal disincentives for secondary earners can limit female participation (cited as an important barrier in Germany).
- Replacing family-based taxation with taxation of individual incomes would eliminate disincentives for secondary earners, who are frequently women, and could encourage more women to join the labor force.
- Create fiscal space for priority expenditures such as on infrastructure and education:
- In developing economies, better infrastructure in rural areas (more access to water and improved transportation systems) can reduce the time women spend on domestic tasks and enable them to seek work outside the home.
- Evidence from India suggests that female labor force participation in India would rise by 2 percentage points with an increase in spending on education of 1 percent of GDP.
- Implement well-designed family benefits:
- Better access to parental leave and high quality, affordable childcare will make it easier for women to seek employment.
- To boost female labor force participation in Japan, measures include expanding childcare leave benefits from 50 percent to 67 percent of salary and boosting childcare services by around ½ million children by April 2015.
Role of redistribution
- Redistribution is complementary to gender-based policies:
- Nothing can substitute for gender-specific policies geared to reducing gender and income inequality.
- Previous IMF work has shown that redistribution generally has a benign effect on growth, while lowering lower income inequality.
- To combat deeper inequality of opportunities (unequal access to the labor force, health, education and financial access between men and women), policymakers should focus on more targeted policy interventions.
Empowering Women, Tackling Income Inequality — Sonali Jain-Chandra, Kalpana Kochhar, Monique Newiak; October 22, 2015
Content in this bundle
- 赋权于妇女，解决收入不平等; iMFdirect博客; 2015年10月22日
- 女性のエンパワーメント、所得不平等への対処; ソナリ・ジェイン－チャンドラ、 カルパナ・コッハー、モニーク・ネウィアク; iMFdirect ブログ2015年10月22日掲載
- Staff Discussion Note
- Расширение прав и возможностей женщин, борьба с неравенством доходов