Macroeconomic Impacts of Gender Inequality and Informality in India
February 9, 2016
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Summary
This paper examines the macroeconomic interaction between informality and gender inequality in the labor market. A dynamic stochastic general equilibrium model is built to study the impact of gender-targeted policies on female labor force participation, female formal employment, gender wage gap, as well as on aggregate economic outcomes. The model is estimated using Bayesian techniques and Indian data. Although these policies are found to increase female labor force participation and output, lack of sufficient formal job creation due to labor market rigidities leads to an increase in unemployment and informality, and further widens gender gaps in formal employment and wages. Simultaneously implementing such policies with formal job creating policies helps remove these adverse impacts while also leading to significantly larger gains in output.
Subject: Gender, Gender diversity, Gender inequality, Labor, Labor markets, Labor supply, Women
Keywords: Bayesian estimation, DSGE model, gender inequality, gender wage gap, Global, income effect, Indian economy, informality, labor market, Labor markets, Labor supply, open economy, production function, South Asia, substitution effect, wage income, Women, WP
Pages:
66
Volume:
2016
DOI:
Issue:
016
Series:
Working Paper No. 2016/016
Stock No:
WPIEA2016016
ISBN:
9781475590784
ISSN:
1018-5941
