Gender Equality and Economic Growth: A Rights Based Perspective

1. Gender Equality and Economic Growth: A Rights Based Perspective Diane Elson SID Presentation Amsterdam 19 Jan 2008

2. The Allure of Economic Growth • Economic growth appears to provide more resources that can be used to meet development objectives, such as MDGs • Economic progress widely judged in terms of economic growth as measured by increase in GDP per capita • Falls in the rate of growth, and no growth, is widely viewed as a cause for concern

3. Some Doubts About Economic Growth • Is growth illusory and unsustainable? • Does the growth process really increase resources, or does it deplete resources and simply make output more visible by transferring it to the market? • Is growth equitable? • Does it require and create inequality? • Does it exclude many groups of people? • Does it entail deprivations that violate human rights ?

4. Gender Equality and Economic Growth: A Variety of Views • Nobel laureate, Arthur Lewis, a founding father of development economics • Mainstream economists such as Stephen Klasen • Feminist economists such as Stephanie Seguino

5. Economic Growth Benefits Women Even More Than Men In his book on the theory of economic growth, Lewis was in no doubt about the benefits to women: ‘Women benefit from growth even more than men . . . Woman gains freedom from drudgery, is emancipated from the seclusion of the household, and gains at last the chance to be a full human being, exercising her mind and her talents in the same way as men’ (Lewis, 1955, p. 422).

6. Growth Reduces Women’s Drudgery Arthur Lewis made this claim ‘because most of the things which women otherwise do in the household can in fact be done much better or more cheaply outside, thanks to large scale economies of specialization, and also to the use of capital. (Grinding grain, fetching water from the river, making cloth, making clothes, cooking the midday meal, teaching children, nursing the sick etc.)’ (Lewis 1954, p. 404).

7. Gender Equality in Education Promotes Economic Growth Klasen (2002) finds that the higher gender gaps in education in sub-Saharan Africa, compared to East Asia, and their slower reduction, accounted for 0.6 percentage points in the 3.5 percentage points difference in the growth rates in the two regions in the period 1960–92. Closing the gender gap in enrolment in primary school by 2005 is a Millennium Development target An estimate of the impact on the economic growth of countries that were not on track to meet this target found that they would have grown faster by about 0.1 to 0.3 percentage points if they had been on track to close the gap (Abu-Ghaida and Klasen,2004).

8. Or is the Causation the Other Way Round? Robbins (1999) argued, in a study of six Latin American countries, that causation goes from increases in growth to increases in education of girls, rather than vice versa. He found that economic growth leads to rising educational attainment by drawing more women into the labour force, increasing the opportunity cost of women’s time, and thus reducing fertility and leading families to invest more in the education of their (fewer) children, girls as well as boys.

9. Gender Equality in Participation in the Labour Market Promotes Economic Growth Studies on the Middle East and North Africa (Klasen and Lamanna, 2003) and India (Esteve-Volart, 2004) suggest that growth would be higher if the gender gap in labour market participation were reduced (through more women entering the market). But is it higher growth that pulls more women into the labour market, rather than women’s entry into labour market pushing up growth? In the global economic slow down, higher female participation rates might lead to higher female unemployment.

10. Gender Inequality in Wages Promotes Economic Growth Seguino (2000)examines a set of export-oriented semi-industrialized countries between 1975 and 1995.She finds that a 0.10 increase in the gender wage gap leads to a 0.15 percentage point increase in GDP growth. This means, for instance, that the difference in growth rates attributable to gender wage differentials for Korea (growth of 8.0 per cent a year ) and Chile (growth of 5.3 per cent) was 1.2 percentage points per year. A second gender wage-gap measure that corrects for gender differences in education lowers the impact only slightly: a 0.10 increase in the gender wage-gap level now leads to 0.10 percentage point increase in GDP growth.

11. Or is the Causation the Other Way Round? • It could be argued that it is the faster economic growth that has kept the gender wage gap high. • If faster growth brings less educated, less skilled women into employment, then this will depress the average level of women’s earnings and tend to widen the gender wage gap.

12. What Policy Conclusions Does the Research Point To? If we put aside concerns about the direction of causation, we might conclude that to promote faster economic growth, a government should: • educate girls to the same level as boys, • reduce barriers to women’s participation in the labour market, • but not act to reduce the gender wage gap.

13. Is this Advice in Compliance with Human Rights Obligations? • The Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) has been signed and ratified by most countries in the world. • CEDAW places obligations on governments to eliminate all forms of discrimination against women. • In so far as the gender wage gap reflects discrimination against women, the advice would not be compliant with CEDAW.

14. Compliance with Other Obligations Governments also have obligations to protect workers’ rights at work and to social security ( see Int Cov on Econ Soc and Cultural Rights) and ILO Conventions). Informal employment, that lacks such rights, has being growing as a share of total employment (Standing, 1999). Women workers in developing countries are more concentrated than men in informal employment ; and within informal employment, in the more precarious types, with the lowest incomes (Chen et al., 2005). Rapid employment creation is necessary but not sufficient. Inclusion per se is not enough.

15. Is Human Rights Compliant Growth Possible? It requires well-regulated markets, monetary and fiscal policies focused on provision of decent work, industrial policy that promotes high productivity jobs, respect for the rights of workers to organize, and the use of taxation and public expenditure to provide public services, and redistribute income. Some of today’s rich countries managed to combine economic growth with similar policies, and have the world’s best outcomes for gender equality. A similar policy package for today’s developing countries is outlined by Seguino and Grown (2006), with a particular focus on women’s rights. It emphasizes not growth through keeping labour cheap but through enabling labour to be more productive and returns to be fairly distributed.

16. Obstacles to a Human Rights Compliant Policy- and New Opportunities • Internal obstacles include elites acting to safeguard their own privileges. • Also external obstacle, especially poorly regulated international markets, that put pressure on governments to compete by keeping labour cheap and failing to protect workers’ rights, and punish more progressive policies with capital flight. • The global economic crisis has destroyed the case for this kind of regulation. • New opportunities for new thinking.

17. References Abu-Ghaida, D. and S. Klasen (2004), ‘The Costs of Missing the Millennium Development Goals on Gender Equity’, World Development, 32 (7): 1075–1107. Chen, M., J. Vanek, F. Lind, J. Heintz, R. Jhabvala and C. Bonner (2005),Women,Work and Poverty, New York: UNIFEM. Esteve-Volart, B. (2004), ‘Gender Discrimination and Growth: Theory and Evidence from India’, STICERD Development Economics Papers, Suntory and Toyota International Centres for Economic and Related Disciplines, London: London School of Economics. Klasen, S. (2002), ‘Low Schooling for Girls? Slower Growth for All?’, World Bank Economic Review, 16: 345–73. Klasen, S. and F. Lamanna (2003), ‘The Impact of Gender Equality in Education and Employment in the Middle East and North Africa’, background paper for report on Gender and Development in Middle East and North Africa, Washington, DC: World

18. References Lewis, W. Arthur (1954), ‘Economic Development with Unlimited Supplies of Labour’,Manchester School, 22 (2): 139–91. Lewis, W. Arthur (1955), The Theory of Economic Growth, London: Allen & Unwin. Robbins,D. (1999), ‘Gender, Human Capital and Growth: Evidence from Six Latin American Countries’, OECD Development Centre, Working Paper No 151, Paris: OECD. Seguino, S. (2000), ‘Gender Inequality and Economic Growth: A Cross Country Analysis’, World Development, 28 (7): 1211–30. Seguino, S. and C. Grown (2006), ‘Gender Equity and Globalization’, Journal of International Development, 18 (8): 1081–104. Standing, G. (1999), ‘Global Feminization Through Flexible Labor: A Theme Revisited’, World Development, 27 (3): 583–602