What is the relationship between women's empowerment and the economy?

Responsible researcher: Adriano Valladão Pires Ribeiro

Article title: THE ECONOMICS AND POLITICS OF WOMEN'S RIGHTS

Article authors: Matthias Doepke, Michèle Tertilt and Alessandra Voena

Sample size : 189 countries

Big theme: Gender

Type of intervention: Effects of women's rights on development

Variable of main interest: Women’s rights

Assessment method: Other - Survey

Policy Problem

In developed countries, women have gained their legal property, political and economic rights over the last 200 years. A period also marked by strong economic growth in these countries, raising the question of the relationship between these two events. That is, what are the causes and implications for the economy of changes in women's rights.

Assessment Context

A comparison of data between countries allows us to illustrate the situation between women's rights and income levels. The UNDP Gender Participation Measure (GEM), an index that aggregates women's legal rights and economic status, has a correlation of 0.8 with GDP per capita. Data available from the OECD and grouped across countries divided into 4 income levels (high, upper middle, lower middle, low) also suggest a positive relationship between economic development and female empowerment. Specifically, in high-income countries women have almost equal access to land, property and credit as men, in low-income countries they are excluded.

Other metrics such as family authority, inheritance practices, rejection of divorce laws, and polygeny are all biased in favor of men in low-income countries compared to no gender bias in higher-income countries. In other words, in poorer countries laws tend to give authority to the father in a family, to prefer sons in matters of inheritance, to lack protection for women in the event of divorce and to accept polygeny. On the other hand, high-income countries have greater protection in the form of law against harassment, rape and domestic violence, in addition to there being no practices of female genital mutilation and no mandatory use of veils. Regarding political rights, women's suffrage occurred on average almost 40 years earlier in high-income countries than in low-income countries. Finally, it is also observed that the share occupied by women in congress is higher in high-income countries, although in all cases this share is lower than the proportion of men.

Intervention Details

One point that draws attention is the reasons for female empowerment, that is, how it happened, especially considering that the legislators, until suffrage, were all male. One explanation can be attributed to changes in cultural factors, that is, female empowerment movements would be responsible for a slow process of modification in the stance regarding gender equality. When mixed with economic changes that strengthen the movement, it would ultimately lead to legislators recognizing women's rights. Another explanation concerns technological changes, in the sense of a dispute between two paradigms. This would happen, for example, when the expansion of rights increased opportunities in the labor market for women, resulting in a trade-off between greater family income and less decision-making power for men. The relationship between guaranteeing more power for men in the family nucleus and protecting their daughters from a future husband would also fit into this argument, just as the greater proportion of men would reduce the burden of approving measures in favor of women, such as suffrage.

Methodology

Given both the relationship between women's rights and economic development and the two reasons for legal changes in favor of female empowerment, it remains to explore the mechanisms that cause the changes. In other words, how women's empowerment leads to economic development and, conversely, how development is a key to the political expansion of women's rights. These two factors complement and reinforce each other.

For this exercise, the focus will be on explaining the exchange between greater power in the family nucleus for men and the guarantee of increased rights for daughters, and how this relationship elucidates the emergence of empowerment when women did not yet have the right to vote. . On the one hand, more rights for a married woman would increase her bargaining power and her share of household decision-making, therefore it would be frowned upon by men. On the other hand, men would care about their daughters and would like them to have more rights to protect themselves from their husbands. In a scenario where women do not make political decisions, what explains female empowerment is the relationship between mothers and children. Mothers would care more about their children's well-being, that is, greater decision-making power for them would imply educational gains for their children and, given the positive effects of education on income that comes with development, greater well-being . In this way, the relationship between education and development is a prerequisite for the expansion of women's rights and this feeds back into gains in education, creating a virtuous circle between development and expansion of women's rights.

Results

Here we present the economic impacts of increasing women's rights in terms of redistribution of resources, access to the job market and voting. The evidence points out that redistribution in favor of women's property rights led to higher rates of physical investment in human capital and a lower fertility rate. In the US, it has been noted that the right to own and run a business without a husband has led to an increase in the number of patents by female inventors. In developing countries, where agriculture is of great importance, access and ownership of land become relevant and affect incentives to invest. In fact, in Zimbabwe investment by women is lower on land where ownership rights are uncertain due to marriage. In Nepal, women's property rights are associated with better health indicators for their children, while in Peru access to land is linked to lower fertility rates.

The expansion of political and voting rights impacts both the composition of legislators, increasing women's participation, and the aspirations of the mass of voters, as women may have different social preferences. In fact, the greater presence of women appears to have changed the composition and increased government spending on social and public health programs, as observed for the USA and some Western European countries. Finally, the increase in women's rights over their bodies and lives also had repercussions on the economy. Access to oral contraceptives, for example, increases women's control over when to have a child and, consequently, their participation and career choice in the job market.

Public Policy Lessons

The lesson learned from the study above is the causes and consequences of the expansion of women's rights. A positive relationship was found between rights and GDP per capita (indicator of economic development) for countries today, with gains in education being the link between female empowerment and development. Thus, as this association becomes strong enough in today's poor countries, the path would be to expand rights. The consequences of empowerment include the redistribution and increase in government spending in favor of health, children and education, in addition to increased investment in physical and human capital.

Reference

Doepke, Matthias; Tertilt, Michele; Voena, Alessandra. “The Economics and Politics of Women’s Rights.” IZA Discussion Papers 6215, Institute of Labor Economics (IZA), 2011.