The impact of gender equality policies on economic growth

This paper introduces a model of gender inequality and economic growth that focuses
on the determination of women’s time allocation among market production, home
production, child rearing, and child education. The theoretical model is based on Agénor
(2016), but differs in several important dimensions. The model is calibrated using microlevel
data of Asian economies, and numerous policy experiments are conducted to
investigate how various aspects of gender inequality are related to the growth
performance of the economy. The analysis shows that improving gender equality can
contribute significantly to economic growth by changing females’ time allocation and
promoting accumulation of human capital. We find that if gender inequality is completely
removed, aggregate income will be about 6.6% and 14.5% higher than the benchmark
economy after one and two generations respectively, while corresponding per capita
income will be higher by 30.6% and 71.1% in the hypothetical gender-equality economy.
This is because fertility and population decrease as women participate more in the labor
market.