Gender Biased Institutions and the Wealth of Nations

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I examine how economic institutions which exhibit a socio-cultural bias against women may reduce the wealth of a nation and undermine its economic wellbeing. In particular, I explore the origin of various types of gender gaps in a society and their impact on its economic welfare. My hypothesis is that the economic factors that cause gender gaps in an economy comes only partly from the market economy and largely from the underlying social norm and that economic welfare varies inversely with gender gaps. In a dynamic general equilibrium model of economic growth with optimizing men and women, I characterize non-trivial effects of gender-biased institutions and technology on the endogenously developed gender gaps in (a) the labor force participation rate, (b) returns to parental investment in education and (c) human capital. The model produces an explicit analytical relationship for doing growth empirics, relating the growth rate of GDP and gender gaps of various kinds. That analytical relationship among the relevant economic variables helps us to organize the newly developed dataset on crime against women by the UN, for conducting a meaningful empirical exercise. The objective of the exercise is to uncover necessary evidence for the model's hypothesis, regarding the negative effect of a gender biased society on the wealth of the nation which it embeds. Empirical results are consistent with the model's prediction that a society which generates a larger gender bias also lowers its per capita GDP.