Economic Gains from Gender Inclusion: Even Greater than You Thought

IMF Blog, November 28, 2018

Source details

Canonical URL: Economic Gains from Gender Inclusion: Even Greater than You Thought

Christine Lagarde, Jonathan D. Ostry
November 28, 2018
Central premise: Barriers to women entering the labor force—tax distortions, discrimination, and social and cultural factors—are costlier than suggested by previous research, and the benefits from closing gender gaps are larger than previously thought.

Observation: Microeconomic evidence shows women and men bring different skills and perspectives to the workplace, including different attitudes to risk and collaboration; studies show financial performance of firms improves with more gender-equal corporate boards.
Gap in prior research: Standard macroeconomic models assume men and women are perfectly substitutable in production (labor force = headcount of male + female workers), implying no gains from gender diversity.
New evidence: Macroeconomic, sectoral, and firm-level data indicate women and men complement each other in production, so increasing women’s employment yields an additional productivity benefit beyond headcount increases (elasticity of substitution between women and men in production is low).

Persistent gaps: No advanced or middle-income economy has reduced the gender gap in labor force participation below 7 percentage points.
Growth potential: Calibration exercise suggests that, for the bottom half of countries in the sample in terms of gender inequality, closing the gender gap could increase GDP by an average of 35 percent.
- Distribution of gains: Four fifths of these gains come from adding workers to the labor force; one fifth of the gains are due to the gender diversity effect on productivity.
Misattribution in past analyses: When the gender gap narrows over time, part of what was attributed to total factor productivity gains is actually due to increased participation of women.
Distributional effects: Men’s wages are projected to increase as a result of greater inclusion of women in the labor force because productivity will increase.
Barriers as implicit taxes: Barriers to women’s employment can be equivalent to tax rates on women’s employment of up to 50 percent in some regions/countries.
Welfare costs: Corresponding welfare losses (accounting for consumption and leisure time, and reduced home production when women enter the labor force) are large; for example, welfare costs exceed 20 percent in the Middle East and North Africa region and in South Asia.

Legal and financial reforms:
- Enact laws ensuring women have equal rights to own property and access credit.
- Reform taxation (for example, replace family taxation with individual taxation and provide tax credits) to incentivize labor force participation among low-income earners.
Social and human capital policies:
- Tackle gender inequality in education and health care.
- Provide publicly financed maternity and paternity leave.
- Expand childcare and elder care availability to increase women’s labor market participation.
Infrastructure and access:
- Improve access to transportation, electricity, and water infrastructure to help lift women’s participation in the workforce.

The unlevel playing field between women and men imposes substantial economic costs and can impede national economic health.
New evidence shows these costs are even larger than previously thought, strengthening the economic case for urgent policy action to promote greater gender equity.

IMF Blog: Economic Gains from Gender Inclusion: Even Greater than You Thought — Christine Lagarde; Jonathan D. Ostry; November 28, 2018

性别包容的经济效益：比你设想的更多; IMF博客; 2018 年11 月29 日
- 性别包容的经济效益：比你设想的更多; IMF博客; 2018 年11 月29 日 (Markdown version)
- 性别包容的经济效益：比你设想的更多; IMF博客; 2018 年11 月29 日 (PDF)
男女格差の解消経済的利益は想定を上回る; クリスティーヌ・ラガルドジョナサン・D・オストリー著　IMFブログ 2018年11月29日
- 男女格差の解消経済的利益は想定を上回る; クリスティーヌ・ラガルドジョナサン・D・オストリー著　IMFブログ 2018年11月29日 (Markdown version)
- 男女格差の解消経済的利益は想定を上回る; クリスティーヌ・ラガルドジョナサン・D・オストリー著　IMFブログ 2018年11月29日 (PDF)
Экономические выгоды в связи с гендерной интеграцией: даже более значительные, чем вы думали
- Экономические выгоды в связи с гендерной интеграцией: даже более значительные, чем вы думали (Markdown version)
- Экономические выгоды в связи с гендерной интеграцией: даже более значительные, чем вы думали (PDF)