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Effect of Gender Inequality on Economic Growth in Countries with High Human Development Index

Info: 7367 words (29 pages) Dissertation
Published: 16th Dec 2019

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Tagged: EconomicsEquality

Investigating effect of gender inequality on economic growth in countries with high human development index


Undoubtedly, to support and strengthen role of women in society improves health, higher levels of literacy and education, voluntary control of population growth and generally economic growth and equitable distribution of benefits. To achieve such an important goal, a long-term process is required so that cultural, social, political and economic beliefs subjected to fundamental changes. It also requires a different attitude under which not only women’s choices are not limited to stereotypical manner, but as agents of change are known. Given the above, this study addresses the effects of existing inequalities between the two sexes on economic growth in countries with a level of human development Index (HDI) for the period 2015 to 2002. The results of model estimation, there is a negative relationship between inequality in life expectancy and disparities in wage levels of women than men, with economic growth shows, the results show a positive relationship between gender inequality and equality in education rate economic growth. The reduction in gender inequality or in other words an increase in the equality of women and men in all areas related to the labor market, employment, education, wages and full equality in cultural issues and problems in the community increases in economic growth with high human development index.

Key words: gender inequality, economic growth, extended torque models

Classification JEL: O19, O15, D31

1. Introduction:

From turn of this century, the world is faced with a new social phenomenon, so called economic participation of women in outside jobs. This is a new achievement for fundamental change in social, economic and cultural human society, and as the substrate calving affected, grows and evolves and processes, infrastructure and a strong initiating its share in the chain are interconnected and leaves social existence. Industrial revolution caused women to actively participate in the labor force and then rapid absorption and large increases women in the labor market capitalism. Technological advances many job opportunities available to women. Services sector growth, rate of urbanization, the increasing number of schools and education popularity, more and more women from houses and farms to draw the new workplace.

International experiences show that promotion of gender equality developmental achievements in the field of construction, so that it ensures living standards and human rights for all individuals. This is done in order to achieve structural reforms to increase the participation of women in political and social life is essential. No doubt supporting and strengthening the role of women in society improves health, higher levels of literacy and education, Voluntary control population growth and generally improve economic growth and equitable distribution of benefits. To achieve such an important process that is required before long-term cultural beliefs, social, political and economic changes are fundamental. It also requires a different attitude under which not only women’s choices are not limited to stereotypical way, but as agents of change are known.

However, based on the theories of growth and development to achieve higher economic growth, one of the main objectives and the usual countries, including the developed and the developing world. In the form of economic growth can increase social welfare, reducing poverty and reduce inequality in pay, but the problem here is that for doing so (welfare), economic growth, along with other goals such as equality gender , wage equality, educational equality … is powered at country level, to their initial demands that the measure is to measure well-being, should be maintained. Given that in the last century, the worldwide wave of expression, numerous conferences and meetings on human rights, dialogue of civilizations, the fight against terrorism, approaches based on social justice, the eradication of poverty and …. is covered, so pay attention to human rights, intellectual property and human rights, he and his attempt to achieve this, in recent decades has become something universal and inevitable. So, given the above, the question arises as to gender inequality, inequality in wages for women than men, disparities in the level of education of women than men, and the inequalities in life expectancy between men and women what effect on economic growth in countries with level of Human Development Index (HDI) is high that we will continue to investigate this issue.

1. A review of literature and literature:

Factors affecting economic growth from one period to period and from one country to another, depending on the characteristics of environmental, cultural, social and economic, that are heterogeneous. But this interpretation of human resources has been a major factor in the courses and in different countries could affect economic growth. Gender inequalities in the tradition of the first theorists such as Marx, Weber, Georg Simile et al who have paid social inequality. The existence of gender inequality in employment and wages, because the full potential of human resources in society (women and men) are not used, can have a negative effect on economic growth is another factor affecting economic growth, education. As in the recent literature on endogenous growth models, Romer and Lucas subsequent studies in the 1980s, and workforce training and the application of it (training) in the community, of the fundamental factors of economic growth has gone. This means that any country that has a dynamic training system, advanced and all consuming, your human and material resources can be more efficient in order to achieve economic growth, the management and allocation. In literature the development of recent years, the education of women and the lack of education, gender inequality as one of the factors in achieving economic growth and development is named. In this context, one can think Sen Won the Nobel Prize in 1988 pointed out: the political economy of development, more importantly, sufficient understanding of political participation, economic and social leadership, nothing else exists and it’s actually an important aspect of development as freedom (Amartiyasin 2002,).

Ideas about gender inequalities make it clear that gender inequalities that can be caused by structural factors are economic, political, and normative or all of them. These factors affect school performance in the production and reproduction of inequalities affect much. Gender inequalities have a negative effect on growth and human development and improve the quality of their human resources. Gender inequality, limited economic growth and thereby reducing poverty makes it difficult. Therefore, considering the issue of gender inequality and its various aspects are of great importance for economists (Turner, 1998).

Randall Collins thinkers who are in the Webern tradition and believes that the use of physical force and material and symbolic resources are very important. Chafetz, Janet Saltzman believes that the preservation and reproduction of gender theories with each other. He maintains gender inequality knows two types of power: coercive and repressive forces and the forces that result optional activities of people. Facultative basis of gender inequality as the economic division of labor, employment and distribution of elected positions as well as cultural definitions, creates a kind of sexism. These acts of discrimination in employment and activity and also, of socialization for the next generation Thus, at the micro level and gender differences between men and women is reproduction.

2-1. Comments related to gender inequality

2-1-1. Functionalism theory:

The functionalist sociologists, community plays an essential role in meeting the sexual needs of men and women and children should not change jobs to be created in these roles. The sexual division of labor in families, individuals and family satisfaction guarantee efficient and stable. This division of labor for the benefit of both sexes and society. Robert Lynn in “political life” says: ((women’s participation in political affairs or any external dependencies of the house, meaning the theft of opportunities for family.)) In terms of Talcott Parsons women should not be in the career of male pattern follow and in direct competition with men of their class afford, because changes in jobs and equality, will lead to a breakdown of family structure. So her family emotional role (tool) which is having children and taking care of his wife and children to play the male role of breadwinner (tool) out of the house, leading to earn to make plays and believes the mixing of men and women seriously into the family. As well as any changes in women’s roles, risks and roles of women in economic and political affairs resulted in the destruction of the current functions of society (Center for Women’s Participation, 2001, p. 11).

2-1-2: Rapport theory:

Rapport believes that the necessity of working women in the field of women – housewives – the separation between work and life is only when the mother was feeling. Because workers who were employed at the factory hours of the day, we need to separate areas of the plant had to regroup. They opened this place to their production began, the financiers to use labor force, with a minimum fee tended, therefore no attention to places reproduces workers. Thus, the (social) units (private) was handed over to the family. Because the cost of doing this heavy work impossible and if these costs onto the shoulders of those individuals were no longer necessary for the capitalist (the government) to undertake the reproduction of the workers there, so try to drive women out of the labor market and promoting the instincts of motherhood and their wives, and women are encouraged to place active in community organizations, at home to rest and reproduce the working men act. To promote this life claiming to be behind every successful man stands a woman and if she did not, he did not progress in their business activities. Women behind the men or they were in the shade. Social work and stayed away from the only family circumstances, to provide comfort and convenience items for “successful men” began. The idea was so good that even women believe it was advertised. To consider if it would not occur to men for their career needs of a family and marriage, regardless, thus procreation and childbearing declined as is clearly seen in many communities , successful women forced into forgoing marriage and childbearing families in particular have (azazi, 2001, p. 150).

2-1-3: Model Theory of the radicals:

The different structure of the women and men linked to the capitalist system, this economic model is divided into two parts: primary and secondary. The initial section aims to maximize efficient capacity to act, so try to hire skilled and stable workforce. This section (skilled and stable workforce) is less affected by economic fluctuations and economic volatility to affect the secondary sector. In a dual market, women work in the secondary sector, hence vulnerable (Edward, cordon a, b 1983).

2-1-4: The theory of the neoclassical model:

Neoclassical economists within the framework of the theory of rational behavior and to maximize the utility tries to express these differences are why women enter the labor market. In response to such questions as who they are; they have no choice and stay at home. The question of how to choose between home and work or enjoying leisure market, consideration and analysis of economists. They have concluded that the supply of female labor force than men. Neoclassical increase long-term supply of female labor force caused by the replacement of three of the domestic labor market work and leisure are (it should be noted that in the case of men between the labor market and active replacement is done domestic work as much no), the demand elasticity of demand for active leisure with men; Because women have two alternatives for leisure (labor and labor market), while men have an alternative. With the advancement of technology, mainly of domestic saving time has been reduced housework and the work of its alternative market (World Bank, 1995). Some research suggests that reducing labor market has been limited, but it is an active alternative. In other words, increasing women’s participation has been at the expense of their leisure and well-being (Cowan, 1983, Hartman, 1981).

In theory, neoclassical, to explain gender differences and the reasons for the limited employment opportunities and income of women, on variables such as family responsibilities, physical force, public education, technical training, working hours, absence from work and shift work, which affect the productivity and labor supply has insisted. One of the basic assumptions of the classical economists is that the competitive conditions, the workers are paid a wage equal to the value of the final product. Based on this assumption, it is said that the income difference between men and women because of women’s lower productivity or due to the failure of the market. Neoclassical assumption economist for new families is that families have the resources (time, money) to approach Rational between family members divided and this causes the women in the early investment of human and material less and when they are more age, to stay at home babysitting.

2-1-5: A new model of family economic theory:

Since the neoclassical microeconomic theory is based on individual decisions, it has been criticized (Backer, 1981). Family economy by providing new insights utility theory replaces the utility’s family is, in other words, the family is to seek to maximize utility. In this view, all family decisions are made in this context. In this type of analysis there is a correlation between the consumption decisions of female labor supply decisions, Therefore, the primary responsibility of women for domestic work and discontinuous and limited participation in the labor market there is a correlation. However, the advantage of this model is moving from the individual to the family, despite the fundamental flaw is the lack of attention to the preferences of family members, We have a set of rules for weighting preferences of family members be provided. Here preferences, family by family representative [benevolent dictator welfare economics] is taken. This view contrasts with the abstraction of the decision, the person and the family together. Feminists believe that “benevolent dictator” as the dominant form of patriarchy in the family. They believe the models bargaining family ties can overcome this problem. In this model the division of labor based on comparative advantage are done. In this way, the men because they earn more, breadwinners and women were less gain (due to having children and taking care of children forced to leave the job), thus higher productivity in domestic work and less productive in market works well. As a result, the domestic division of labor based on comparative advantage, women (especially married with children) are looking to work part-time, flexible and employment leads. So the more unstable areas of women than men (Brown,J 1999).

2-1-6: Foreign direct effect of gender disparities in education:

Gender inequality is lower, especially in education means more training for women at all levels of education as men, if there is a women’s education has a positive effect outside on the quality of education has, thus reducing gender disparities in education to increase the quality of education, as a result of increased economic growth.  If you have the belief that educating women leads to an increase in the quantity and quality of their children will, in other words, the same effect is foreign (through support and education for mothers of their children). Moreover, consistency in levels of education, the quality of education at the household level to generate positive external factors.  The way to increase the positive effects of foreign reducing gender inequality. Human capital through increased labor productivity can be directly on economic growth effect, can also human capital indirectly on the growth of influence of this effect by increasing the rate of return on physical capital, which in turn investment rate increase that and the effect on economic growth affect investment and increase growth.

2-1-7: due to the complexity of inequality in employment:

As a result of educational inequality, reduction in employment opportunities for women are likely to reduce the ability of the labor force, which is the average level in the absence of gender inequality in employment that did not happen This results in a reduction in economic growth. In addition, the creation of artificial barriers to the employment of women in sectors of the economy, increasing labor costs and reduce international competition.

2-2. background research:

2-2-1: Studies done in the country

– Majma and Ozlati moghadam (2012) in a study of the impact of human development, gender and education in Islamic countries with emphasis on the country for the period 2007-1990 were examined. The results show that Iran’s position on the human development index and gender among the 19 selected Islamic countries, is not recommended. Also, despite the relative increase in the proportion of women enrolling in higher education in Iran, compared with Kuwait, Qatar, Albania, UAE, Saudi Arabia, Malaysia, and Lebanon is at a low level. The article also describes the current situation of Iranian and Islamic countries, the respective indices, developed a model for improving the system in relation to the country’s scientific development is proposed.

– Partovi et al (2011) study examined the effect of gender inequality on economic growth in the period 1966-2006 using ordinary least squares models are. The results show that education has a significant positive effect on economic growth in Iran and to any level poses reduce gender inequality in education and employment, economic growth increases. With increase in average years of schooling for women, economic growth increases.

– Barzaee and Hatemi (2010) in his study of the effects of gender equality on economic growth in developing countries (2006-2000) Using a system of simultaneous equations, it concluded that; Gender equality in education, and a significant positive impact on economic growth which impact directly through its impact on human capital accumulation and indirectly through regulation of population growth and development affect economic growth.

– Fasaee and Kalhor (2007) to reduce the size of the gender gap and the realization of the country are in the Third Development Plan. The results showed that in the first development plan directly to the issue of women and the gender gap is not addressed. In the second program, which is paid directly to the issue of women more concerned with the protection of women And parentless children through indirect payments and social security is improving. The third program coincided with the start seriously addressing this issue. In the third quarter, but slightly wider as well as follow-up program and Article 111 refers to the issue of women and increase their participation. In general, it is observed that with the passage of time from the first to the fourth program planners sensitivity to the issue of gender and women has increased.

– Khalili In a study in 2007 to increase and improve the participation of women on the macro level did It found that the development should enable all people to the greatest extent possible, increase your abilities.  In the meantime, enhance and improve the participation of women on the macro level perceptions and beliefs of a society in its whole structure, positive impact. It seems that complementary and egalitarian relations should be developed, especially relations between the sexes, In order to enable men and women to bring their energy to increase effective supply its capabilities in the public sphere. Because if women in the fabric and applied to daily tasks, repetitive and continuous passive manner, they will not be no possibility of growth and the level of knowledge and insight they will not grow.

2.2.2: Studies conducted abroad

– Oriana Bandiera and Ashwini Natraj (2013) study was to answer the question whether gender inequality is a barrier to economic growth and development? They concluded that evidence of the impact of gender inequality on economic growth and development are not yet results, meaning it is not the policy of inequality on economic growth and development ineffective, but also to achieve the results more accurate and more detailed evidence is required.

– Rashmi Umesh Arora (2012) in a study to examine gender inequality, economic development and globalization for India deals during the period 2006-1998. The results show that if the per capita income is below the level of national income, The lower income is associated with higher gender inequality has a negative impact on economic growth and development of India.

– Berik et al (2009) study the relationship between inequality among groups and macroeconomic variables are examined. Since gender inequality and economic growth affect each other in many ways, this study emphasizes the equality of income, in addition to equality of opportunity. Gender inequality undermines the provision of capacity development, Therefore, this research is exploring how gender relations in education and the labor market has a negative impact on the macroeconomic level.

– Costello and Domenech (2006) in a study using panel data the inequality of human capital for the total population (without segregation) won and its effect on life expectancy, and then, on economic growth showed they viewed that inequalities in human capital, and economic growth will reduce life expectancy. In this model, the life expectancy is one of the basic variables that a lot depends on the human capital of their parents. The results showed that a steady economic growth in the primary distribution of education depends, but economic growth is temporary, such as a poverty trap and children born in poor households, life expectancy low, and workers without training work . This study shows that the mechanism is an important part of the relationship between inequality in life expectancy and per capita income growth is human capital. Specifically, they analyzed the mechanism that inequality and economic growth, because of the difference in life expectancy between those with economic status – have different social, connects to each other.

– Anderson (2003) in a study that found that, despite the wage gap and discrimination facing women in the labor market, Labor force participation rate both now and in the future and reduces future generations. Lower rates of labor force participation for women seeking lost wages, wage discrimination women to stay at home movement. This wage discrimination can also automatically reduces investment in families to educate their daughters than sons.

– Seguino (2000) in a study to investigate the relationship between gender inequality and economic growth. The initial hypothesis, the test is whether gender inequality in the labor market and lower relative wages of women, leading to GDP growth through the development of the export sector? Empirical analysis shows that GDP growth in the period 1995- 1975 is positively associated with gender inequality.

– Klasen (1999) using cross-country panel regressions have shown the extent to which gender disparities in education and employment may reduce growth and development. The dramatic effect of gender inequality on economic growth is achieved. Gender disparities in education due to lower average quality of labor (human capital) have a direct impact on economic growth, but because of investment and population growth indirectly impact on economic growth. He concludes that 0.4to 0.9 percent of the differences in growth rates in East Asia, sub-Saharan Africa, South Asia and the Middle East can be explained by the widening gap of gender in public education. In addition, the analysis shows that gender inequalities in education hinder fertility and mortality rates fall children.

3. The specification model and the introduction of variables:

In line with previous studies, this article explores the relationship between gender inequality, inequality in wages for women than men, disparities in the level of education of women than men, and the inequalities in life expectancy between men and women on economic growth in a selection of countries by category high human development proposed by Arellano and bond (1991) two-stage model Generalized method of moments (GMM) for dynamic panel data presented in this study as well. The study sample consists of about 14 countries with HDI above, includes Argentina, Uruguay, Turkey, Mexico, Iran, Brazil, Kazakhstan, Venezuela, Malaysia, Lebanon, Azerbaijan, Colombia, Ecuador and Russia, according to the latest rankings United Nations development program in 2016 for the period 2015-2002 is. Data from the database to the World Development Indicators (WDI) and the United Nations Educational, Scientific and Cultural Organization of the United Nations (UNESCO) has been collected. According to theoretical and experimental studies of the foregoing, the research model is presented as follows:

GDPgrt=f(GDPgrt-1 ,GI , LE,EDU ,WI )


Where:: GDPgr   : GDP growth, GI: gender inequality,: WI: Inequality of wages and salaried workers, women than men, : EDU: . Net enrollment rates, secondary, gender quality index, LE: . Net enrollment rates, secondary, gender quality index and

i,t: is the error.

4. Empirical results:

4-1. Reliability testing (Unit root Test):

Pre-Integration testing to determine long-term relationship between the main indicators of the study, Unit root test shall be done to prevent the problem of spurious regression for variables. And a unit root econometrics literature indicates that the unit root test based on panel data time series with the power of the unit root test is more accurate. In this study, two types of unit root test of validity variables were used. The test is as follows: unit root test Levin, Lin et al (Levine, Lin & Chu (LLC) test and have sons and Shane (Im, Pesaran and shin, 2003) in the name of the IPS study. IPS test makes it possible for the heterogeneity among individual effects exist, why IPS test the unit root test known heterogeneous. The results of this test and evaluate the acceptance of the values of the calculated probability indicates that some of the variables are stable level some of the variables were steady with time differencing.

Table 1: Summary panel unit root test results
Countries with high human development index
Countries with high human development index  
LLC IPS Variables














I(0) -3.91675









Source: The authors

4-1. Cointegration Test:

In case of co-integration relation between the two variables, it is possible to estimate the efficiency of the model achieved that in this case, despite the time series unsteady problem of spurious regression not have the equation is estimated, equilibrium has term relationship will be long. In this study, CAO integration test to check for long-term relationship between variables is used when the results are presented in the table below.

Table 2: Results of testing for the integration Cao

Prob  t-Statistic  
0.0000 -3.9794 ADF

Source: The authors

As you can see, the results are in Table 2 integration or long run relationship between variables will be accepted at 95%

4-1. the estimated model and interpret the results:

Table 3: results of the estimation method for model GMM

The results of the estimation method for model GMM
(Economic growth as the dependent variable)
The estimation by GMM Variable
Possibility T statistic Coefficients
0.0571 1.926253 0.208997 GDP(-1)
0.0001 4.057590 111.7086 GI
0.0649 -1.867743 -359.8713 LE
0.0596 1.907284 389.3376 EDU
0.1510 -1.448010 -18.75831 WI


Instrument rank:14

Source: The authors

The results of model estimation torque generalized to countries with HDI above, there is a negative relationship between inequality in life expectancy and disparities in wage levels of women than men, with economic growth shows, the results showed the association positive between gender inequality and equality in education with economic growth. The reduction in gender inequality or in other words an increase in the equality of women and men in all areas related to the labor market, employment, education, wages and full equality in cultural issues and problems in the community increases in economic growth with high human development index. Gender inequality is lower, especially in education means more training for women at all levels of education as men, if there is a women’s education has a positive effect outside on the quality of education has, thus reducing gender disparities in education to increase the quality of education, as a result of increased economic growth. If you have the belief that educating women leads to an increase in the quantity and quality of their children will, in other words, the external effect is the same. According provide greater access to training and retraining of women, their participation in the labor market increases. However, most theorists insist that the only factor of economic growth modifiers for women’s participation and change their position in relation to men, but also cultural structure of patriarchal important factor in determining the position of women. Empirical studies show that economic growth, the modern sector is affected more than the national average. Also, according to Kuznets social inequality in the early stages of economic development, increase, then stabilize and eventually reduced. After positive relationship for countries with high human development index, which most countries in the early or mid-development are not unexpected? The results show that by reducing the inequalities in life expectancy and reduce disparities in wage levels in women than in men and increase equality in education between the two sexes, or in other words, an increase in the equality of women and men in all fields related to the labor market, employment, education, wages and full equality in cultural issues and problems in the community, the economic growth rate increases. The plus sign lag variables of economic growth shows the movement of these countries on the path of development and implementation of programs in line with the strategy of development and economic infrastructure and the equality of men and women in countries with a Human Development Index of the investigation, however, the mobile is slow.

To investigate the validity of the matrix of Sargan test tools we use in this test, the null hypothesis showed no correlation with the instrumental variable component is disturbing. According to the results of this test we can use two methods: We compute chi-square small table with two degrees of freedom, rank instrumental variables minus the number of variables in the model is estimated, We also test P-value is 0.05. So we accepted the null hypothesis of no correlation between instrumental variables and components disturbing.

4. Conclusions and recommendations:

Lack of women’s participation in economic activity can be considered a problem in the way of developing countries. The need for women’s entrepreneurial creativity must increase and expand employment opportunities based on cultural values that once controlled it, the answer is yes. Research shows that during the past decade, especially since 2000 two major developments in trade and international economics is taking place. Development of explosive growth and development of women entrepreneurs and the growing volume of international trade. These two developments together will promote women’s economic and overall economic growth in most major countries and developed and the dimensions of this changes somewhat wide that experts consider it the beginning of a new era of global businesses.  Increasing women’s education levels have the opportunity to find specialized tasks. Now the professional women with a university education in Western countries such as science, business and finance, management consulting, accounting and advertising trends have found. As well as specialized jobs in the field of women’s health services have also been considered, but in countries with medium human development index and low tendency to handicrafts, agricultural and artistic jobs. One of the misunderstandings about the women’s businesses develops, this is supposed to be a woman in this business for the customer. Problems of the rule of patriarchal thinking, obstacles that women have for their creation and inequality and higher education. Single-product economy, mode of production dominant in the country, centralization and state economy, huge losses during the war and reduce the production of national budgets with the attitude of state capitalism, the development of technocracy and employment in governmental agencies, lack of planning and codified for women’s employment , cultural problems, opposition to the employment of women and the lack of cooperation by working women, low wages for women than men, lack of expertise of women, the unwillingness of employers to insurance cover for women, the dominant culture of men, the historical trend of sexual discrimination, ignoring women’s abilities in the management of cooperative banks and institutions The credit to women, society’s attitude towards women in some activities, economic feasibility lack of funding for women’s labor force because of the possibility of marriage, childbirth and leave by their laws and regulations to protect women employers a problem that is, lower labor productivity women due to family responsibilities, lack of confidence and self-esteem in women as a result of lack of proper upbringing family, the lack of women in technical skills and professionalism, inappropriate workplace in some of the activities in terms of ethical issues and the need to have more physical ability in some Activities in some workplaces false competition, high cost of day care centers and the lack of public and private organizations for their major barriers to women’s employment considers their employment. aid for self-employment and equitable distribution of the benefits of economic growth and development between men and women can be measured in economic growth is vital.


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[1] Master of Economic Sciences

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