Examining The Relationship Between Inequalities In Gender Wage And Economic Growth In Pakistan

Abstract

Gender equality is not only a policy reform agenda for developing countries but also an important goal of Millennium Development Goals. With respect to all socio-economic indicators, the development history demonstrates extremely gloomy image of gender inequality in Pakistan. With this background this paper investigates the nexus between wage inequality and economic growth and detects co-integration between gender wage differential and economic growth using ARDL bound test. It is confirmed from the empirical results that there exists long-run relationship between economic growth and wage differential. The findings of unrestricted error correction model indicate that the wage inequality showed negative and significant impact on economic growth in the long run. The results of this study showed dissimilarity with the findings of Seguino (2000) that there is existed constructive association between wage inequality and economic growth. An important finding from the present examination is that the gender wage gap is detrimental for the process of growth in long run. Policies should be made to reduce gender wage gap. Such government policy should be designed which could address and adjust economic priorities in the face of changing global economic realities and provide comprehensive framework for conducive environment for gender.