It used to be the case that the issues of gender inequality, gender differences in education,
labor force participation, pay, or policy in power, were essentially seen as equity or justice issues.
But in the last twenty years,
a literature emerged that investigates whether these gender inequalities also affect economic performance of countries.
And, the purpose of this paper, it's to look at this literature and to see whether there are indeed,
whether there is indeed convincing evidence that gender inequality affects economic performance,
in what way it affects economic performance,
and whether there are possible “win-win” situations where you can promote gender equity and justice
and promote economic performance at the same time.
It is actually quite difficult, to estimate the impact of gender gaps on aggregate economic performance
and there are different methods, each of which have some strengths and weaknesses.
One method is theoretical models that actually model the impact of gender gaps on economic performance.
They can provide insights on particular mechanisms, how gender gaps can affect economic performance.
Then there are, what I would call, accounting studies, there’s a recent one by McKinsey,
which just estimate how much larger would world GDP be if all women worked and earned the same as men.
Those,
this method is really quite problematic because it assumes that we could just change the world by just adding all of
these female workers without impact on wages or without impact on unemployment, without impact on men,
and so I think this method is problematic.
A third method is using cross-country regressions that basically relate economic performance of countries to gender
gaps and other economic features of these countries.
To some degree,
this is the most appropriate method to look at this because you can answer the question most directly but, of course,
there are also questions of causality and best specification. And the last one is usually micro-level studies.
We look at particular interventions, for example, to promote female education
and see how that affects household income.
Those are also very useful but it's very hard for this method to then upscale to the national level,
what they mean for aggregate economic performance.
So, what we do in our study is to review all of these methods and, triangulate, try to find robust results
and then we particularly focus on doing a systematic review
and meta-analysis of all the cross-country regressions on the topic to see whether gender gaps in education
and labor force participation have an impact on economic performance.
So, when it comes to results,
one first must note that there is greater heterogeneity in results than I would have thought.
And, often, in public policy discussion,
it is seen as a foregone conclusion that reducing gender gaps would promote economic performance.
But when actually doing a systematic review of the literature, the findings are not that clear.
In the field of gender gaps in education, there are many studies and one can do a very good systematic review
and meta-analysis.
And our meta-analysis shows that there is a robust finding that reducing gender gaps in education promotes economic
performance of countries.
In the field of gender gaps in labor force participation or pay, there are many, many fewer studies.
There are some theoretical studies and there are a few empirical studies
but most of them have some methodological issues
and those studies tend to suggest that reducing gender gaps will also promote economic performance.
But, because they are so few and they are so varied and, methodologically, sometimes weak, we cannot be sure of that,
of that point at this stage.
And, lastly, there are lots of individual micro-level studies that show that gender gaps, and access to credit, input,
land and other things can also affect economic performance.
But those studies are always very, very local and it’s hard to generalize, generalize from them.
Well, our study of course has quite a direct policy relevance.
For example, the G20 have a process of analyzing gender gaps.
And they have used the McKinsey estimates to argue why the G20 should promote female labor force participation rates.
What we are now saying is, well, the evidence is only clear in the case of promoting female education.
And, while, of course, there is an equity, and maybe,
a justice case to be made to promote female employment opportunities, the claim that they will have a large
and immediate impact on economic performance is problematic.
And, also, it is, it suggests that this change in such a policy will be very easy
but those simulations are really not any guide to how the impact would play out over time.
So what we really need is much more studies that investigate, for example, particular country experiences
or policies to promote female employment, to then see what impact they have on economic performance in those countries.
So we need, similar to the education field, we need a large, settled body of literature, of empirical literature,
that investigates these effects before we can jump to policy conclusions.
So, in terms of outlook, I think we need quite a lot more research in this area.
As I mentioned, it’s quite difficult to just rely on one method to analyze this question.
So, we need more research in all dimensions.
We need more theoretical research to investigate the question of how gender gaps can affect economic performance.
We need many more empirical studies, using cross-country work,
but also country case studies that investigate the impact of changing gender gaps in one dimension on the economic
performance of countries.
And we then need also some more systematic reviews of the many,
many micro level studies that look at the impact of changing employment or education at the local level.
So, I think, despite the fact that in public policy discussion, this seems like a settled matter, I think,
for research, there are still many open questions that need to be addressed
and I think that this field of research will be fruitful for many years to come.
