Gender Inequality and Economic Growth: Evidence from Industry-Level Data

IMF Working Papers, July 3, 2020

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Study whether higher gender equality facilitates economic growth by enabling better allocation of female labor.
Hypothesis: Reducing gender inequality should disproportionately benefit industries with typically higher female share in their employment relative to other industries by allocating female labor to its more productive use.
Test focuses on whether industries that typically employ more women grow relatively faster in countries with ex-ante lower gender inequality.

Exploits within-country variation across industries to identify causal effect of gender inequality on industry outcomes.
Outcomes analyzed: industry growth in value-added and labor productivity.
Identification strategy uses cross-industry comparisons within countries, leveraging differences in typical female employment shares across industries.

Gender inequality affects real economic outcomes.
Reducing gender inequality leads to relatively faster growth for industries with higher female employment shares.
Evidence supports a causal effect of gender inequality on industry growth in value-added and labor productivity.

Policies that reduce gender inequality can improve allocation of female labor toward more productive uses.
Such policies are likely to generate disproportionate gains in industries with higher female employment shares, thereby supporting overall economic growth.