Gender, Distribution, and Balance of Payments Constrained Growth in Developing Countries

Abstract

An unresolved debate in the development literature concerns the impact of gender equality on economic growth. Previous studies have found that the effect varies, depending on the measure of equality (wages or capabilities). This paper expands that discussion by considering both the short and long run, evaluating the effects of gender equality in two types of economies—semi-industrialized economies (SIEs) and low-income agricultural economies (LIAEs). Further, it incorporates gender effects on the balance of payments constraint to growth. The results suggest that gender wage and capabilities equality work in opposite directions in SIEs and in the same (positive) direction in LIAEs. In the long-run analysis, government macroeconomic management policies are shown to be necessary in order to ratify movements towards gender equality.