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

Abstract

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, this paper finds that both income and gender inequalities, including from legal gender-based restrictions, are jointly negatively associated with per capita GDP growth. Examining the relationship for countries at different stages of development, we find that this effect prevails mainly in lower income countries. In particular, 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 fastgrowing emerging Asian countries. High levels of income inequality in sub-Saharan Africa appear partly driven by structural features. However, the paper's findings show that policies that influence the opportunities of low-income households and women to participate in economic activities also matter and, therefore, if well-designed and targeted, could play a role in alleviating inequalities.

The Impact of Gender Inequality on Economic Performance in Developing Countries

“…(World Bank, 2006: 2) Similar statements have been made (more recently) by the IMF (e.g. Lagarde, 2016;Hakura et al 2016), the UN, ILO, or the OECD (e.g. OECD, ILO, IMF, and World Bank, 2014).…”

Gender Factors and Inclusive Economic Growth: The Silent Revolution

“…The increase in the quantity of education and employment of women was shown to broaden the available talent pool in an economy, increase the income of women, and produce GDP growth [30]. Similarly, other studies indicated that the gender inequality in education reduces the average amount of human capital in a society and, therefore, harms economic growth [9,15,18,19,21,24,31].…”

“…Gender differences in education were thought to lead automatically to gender differences in employment, particularly in the formal sector, where the employers would prefer workers with good training and, therefore, would not consider applications from women without education [9,24]. Conversely, if large barriers exist for women to access employment, the parents might decide that educating girls is not sufficiently lucrative and beneficial for the family, thereby producing a lower educational demand for women, resulting in a greater gender gap in education.…”

“…Previous studies have examined the relationship between gender factors and economic growth. A significant number of studies showed that, on a micro level, gender gaps negatively affect macroeconomic results and economic growth, and that the influence of gender factors on economic growth seems to be determined by variables such as the economic system, education of women, distribution of work between sexes, and political regime [5][6][7][8][9].…”

Foreign direct investment and civil violence in Sub‐Saharan Africa

“…Inequality is measured by the Gini, a metric calculated and published by the Standardized World Income Inequality Database (SWIID; Solt, 2016). This variable is widely used in empirical studies as a measure of income inequality (see, for instance, Hakura, Hussain, Newiak, Thakoor, & Yang, 2016). The main advantage of the SWIID is that it provides broadest country coverage by incorporating a number of data sources to maximise the comparability over time.…”