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Yes, Educational Gender Equality Does Promote Economic Growth


Nothing new in today’s story.

Reducing the education gap between males and females produces significant economic growth.

However, academics are always skeptical about everything.

There is always some career-oriented academic who wants to publish some fresh new analysis saying all of the received wisdom is wrong. If they pull off their “The Emperor Has No Clothes Act”, they become famous and they get a nice job at Stanford or the University of Wisconsin.

There are also some sexist economists out there who believe that men are more efficient at market labor and women are more efficient doing household tasks. So they run fancy Ricardian models showing that in a free market, economic growth will be higher when women stay home using their natural talents for washing dishes and playing with babies, while men use their natural talents to make executive decisions and earn money. (The Nobel Prize winning economist Gary Becker was famous for espousing this position. See his 1981 Treatise on the Family/)

Generally, more challenges come from aspiring statistical iconoclasts than from dedicated gender traditionalists. So there are lots and lots and lots of statistical studies out there. People who are trained in vast amounts of econometrics keep coming up with fancy reasons for why all the studies saying gender equality is good for development must be wrong, and we need to re-re-re-re-estimate this relationship with the author’s fancier statistical method.

Anna Minasyan, Juliette Zenker, Stephen Klasen and Sebastian Vollmen have done the world an enormous favor by writing a review of the 56 studies of the endlessly rehashed relationship between gender inequality and education in growth and assessed what the balance of the studies find. They weed out studies that use questionable methodologies to get a “shocking” publishable finding, and summarize the results of all of the rest. They use reasonable statistical methodologies for combining the results of a large number of parallel studies. You can find the results of their work in the 2019 World Development 122: “Educational Gender Gaps and Economic Growth: A Systematic Review and Meta-Regression Analysis.”

What happens when the smoke clears?

Gender equality in education stimulates economic growth.

I will spare the reader the arcane statistical debates that caused some contrarians to be stubborn – and required Minasyan and all to get down and dirty on the statistical details to show why the contrarians were wrong.

I will also spare the reader the results of how many winning and losing votes there are for Gender Equality Causes Economic Growth using different types of statistical measures. You can read the article yourself if those details really concern you.

What people DO need to know is WHY educational gender equality promotes growth.

If you already know about these arguments and agree with them, good for you.

You are already well-informed.

The list below is a combo of Minasyan’s arguments in their article and material from my own work. We all basically are in agreement.

1) Educating women raises their productivity as workers. This raises the productivity of any sector that mostly uses female workers, such as school teaching, clerical work, sales work, nursing, work in allied health professions, social work, and labor intense manufacturing. This list of occupations and industries represents a very large percentage of the economy in many poorer nations. Raising the productivity of a substantial share of the economy does good things for economic growth.

2) The role of women in labor intensive manufacture deserves special mention here. One of the most important export sectors in the Global South is low wage export manufacture. Think textile making. Think clothing making. Think appliances, both cheap ones such as irons, and expensive ones, such as phones. Nontrivially, think food manufacture – which is especially important for local markets and for within-region trade. Those represent a significant proportion of the manufacturing sector for most poor countries. Countries in the Global South that already have mining, petroleum or pre-existing heavy industry are less concerned about labor intensive low wage manufacture. However, for countries without geological advantages, having educated women to fill their manufacturing needs is critical.

3) Educated women have lower fertility. Lower fertility reduces the child/adult ratio of the population. This means working adults have a smaller number of non-working humans to feed. Less money goes into food for survival, allowing wealth created to go into higher levels of consumption for individual people or for savings and investment. (Note that the ratio of workers to people of non-working age is called the “dependency ratio” in demography. It also includes senior citizens as non-workers. Senior citizens are a very small proportion of populations in the Global South due to high mortality rates. So, the ratio of workers to non-workers is driven by the number of births per woman.)

4) Women are more likely than men to insist that family resources be used to pay for children’s schooling rather than immediate consumption. Giving women a larger share of national income due to higher salaries coming from good jobs means that more resources are invested in educating future generations, improving national productivity in the long term.

5) Education increases the likelihood of successful female entrepreneurship. An educated woman can not only open a business but can keep accounts and read business documents. This is particularly useful if the businesswoman needs to apply for credit or comply with government regulations. The importance of literacy for running a small business cannot be overstated.

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There are other more controversial claims, such as the argument that female-led development is more ecologically sustainable and that powerful women play a role in reducing violence and civil war. Some studies provide statistical support for these arguments. It is not clear, however, that those equations could survive the rigorous holding-to-econometric-standards exercise of the studies covered in the Minasyan et al. review.

There is no need to go overboard here. Just the robust statistical findings reported in the Minasyan article, along with the powerful causal arguments listed in the preceding section are enough to demonstrate that women’s education is extremely important to development.

Reduce the educational gap between men and women and make both men’s and women’s lives better. What’s not to like?

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