The Law and Economics of Gender Discrimination and Poverty

Abstract

Sexist laws are more prevalent in regions where poverty is endemic. The corollary is also true; the places where women experience less discrimination are typically more developed. The legal academy has drawn several inferences from this observation, including that poverty and the development process appear to be detrimental to women’s rights. Said differently, it is generally assumed that women’s rights are bolstered or diminished depending upon the economic landscape in which they reside. But despite the strength of this relationship, few legal studies have sought to understand why precisely sexist laws seem inextricably linked to poverty.Our research finds the opposite of what is typically believed: the act of depriving women of fundamental rights is a primary cause of poverty. First, using a law and economic approach, we find that sexist laws create perverse behavioral incentives whereby actors rationally engage in inefficient behaviors. This is because sexist laws, in contrast to other forms of discrimination, burden society's basic economic unit — the family. For instance, prohibiting women from earning a wage depresses the rate of investment since single-income families must then approach the market over cautiously. These deductions are supported by our original empirical research, which indicates that gender inequality and poverty are significantly and powerfully connected. Indeed, sexist laws are less the result of underdevelopment as much as its very cause.