Inequality, Gender Gaps and Economic Growth: Comparative Evidence for Sub-Saharan Africa

IMF Working Papers, June 8, 2016

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Canonical URL: Inequality, Gender Gaps and Economic Growth: Comparative Evidence for Sub-Saharan Africa

Authors: Dalia S Hakura, Mumtaz Hussain, Monique Newiak, Vimal V Thakoor, Fan Yang
Published: June 8, 2016
Series: IMF Working Papers
DOI: https://doi.org/10.5089/9781484382349.001

A growing body of empirical evidence suggests that inequality—income or gender related—can impede economic growth.
Using dynamic panel regressions and new time series data, the paper finds that both income and gender inequalities, including from legal gender-based restrictions, are jointly negatively associated with per capita GDP growth.
The negative association between inequality and per capita GDP growth prevails mainly in lower income countries.
Per capita income growth in sub-Saharan Africa could be higher by as much as 0.9 percentage points on average if inequality was reduced to the levels observed in the fast-growing emerging Asian countries.

Empirical approach: dynamic panel regressions.
Data: new time series data compiled for the analysis.
Factors analyzed: income inequality, gender inequality, and legal gender-based restrictions, considered jointly in relation to per capita GDP growth.

Both income and gender inequalities are jointly negatively associated with per capita GDP growth.
The adverse effect of inequality on growth is concentrated mainly in lower income countries.
High levels of income inequality in sub-Saharan Africa appear partly driven by structural features.
Policies that influence the opportunities of low-income households and women to participate in economic activities matter and, if well-designed and targeted, could play a role in alleviating inequalities.

Targeted policies that expand economic opportunities for low-income households and women can help reduce inequality and improve growth outcomes.
Reforms addressing legal gender-based restrictions could mitigate gender gaps that are jointly associated with lower per capita GDP growth.
Because structural features partly drive high income inequality in sub-Saharan Africa, policy design should consider both structural constraints and targeted measures to expand participation.

Subjects: Education, Gender, Gender inequality, Income distribution, Income inequality, National accounts, Personal income, Women
Keywords: Caribbean, economic growth, gender inequality, Income distribution, Income inequality, income share, inequality indicator, inequality measure, net Gini coefficient, Personal income, real GDP, sub-Saharan Africa, Women, WP, x LICs

Appendix 1. Country Coverage
- Appendix 1. Country Coverage (Markdown version)
- Appendix 1. Country Coverage (PDF)