The Impact of Gender Inequality on Economic Performance in Developing Countries

Abstract

Despite substantial progress, gender gaps persist in many developing countries. Since the 1990s, a literature has emerged arguing that these gaps not only are inequitable but also reduce economic performance. This review finds that, first, it is methodologically difficult to determine reliable effects of gender gaps on economic performance. Second, accounting studies that calculate how much larger GDP would be if gender gaps in employment disappeared vastly overestimate likely effects. Third, the theoretical literature has generated important insights on mechanisms linking gender gaps to economic performance. Fourth, systematic reviews of the cross-country evidence robustly show that lowering gender gaps in education leads to higher economic performance, while the literature on the impact of other gaps is much more limited. Fifth, there is accumulating micro evidence on how reducing particular gender gaps at the level of households, farms, or firms can improve economic performance in particular contexts, with robust results in some areas, and less clear evidence in others.