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http://dx.doi.org/10.4172/2151-6219.1000180
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ISSN: 2151-6219
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Research Article Open Access

Gender Inequality and Economic Development

Karoui Khayria* and Rochdi Feki
Unit Development Economics Research (URED), Business School, University of Sfax, Tunisia

Abstract
This article attempts to analyze the effect of gender inequality on economic growth using the GMM dynamic panel
for the five countries of the Great Maghreb during the period 1985-2011.The results of this study lead us to demonstrate,
one hand, a positive and significant at the 5% of the population effect on economic growth and on the other hand a
statistically significant and negative in 10% of the investment on economic growth effect. In contrast, gender inequality
has a significantly negative effect of 5%.

Keywords: Gender inequality; Economic growth; Panel data indicators can be poorly constructed and misinterpreted [7]. Thus, to
be truly effective, a composite index should be based on theoretical
Introduction thought, which allows you to select individual variables to associate and
The extent of gender inequality is a concern within the international weighted in a way that reflects all aspects of the measured phenomenon.
community. That is why we need a new gender inequality measure. In So the gender inequality in developing countries is complex and
1995, on the occasion of the Fourth World Conference on Women, multidimensional problems that justify the use of the composite index.
UNDP has implemented substantial measures such as the gender- The Workshop, The Hague identified eight relevant dimensions in
related human development the GDI, the human development index which gender inequalities appear:
(HDI), indicator of women's participation IPF. These indicators have
led to many measures for gender inequality. UNDP has a broader • Gender identity: describes the roles of gender and cultural
review of these measures and showed that there are major gaps. He issues such as the socialization of girls and boys. This dimension
developed a new measure of gender inequality (IIG) to fill these gaps. describes the social behavior of society and individuals internalize the
The Report of the World Bank [1] shows the relevance of gender issues process of socialization.
in economic development. • Physical integrity: refers to the absence of violence against
Gender inequality and women's empowerment are among the women, to control their sexuality and access to contraception [8]. This
objectives of milestone development goals (MDGs). Despite this, dimension describes the autonomy of the body, she explained by five
gender inequality can be observed in almost all developing countries variables that are the prevalence and acceptance of violence against
and even in developed countries. Gender inequality in education can women, the prevalence of female genital mutilation prevalence of
prevent the reduction of fertility rates, infant mortality rates and may contraception and teenage fertility.
also have negative effects on children's education and health. It can also • The family describes inequalities within households in
affect economic growth through a number of channels. These channels terms of inheritance and decision making [8] to measure this aspect of
include the direct and indirect effects of growing inequality between gender inequality. On 'uses the following four variables: the indicator
the sexes and have been extensively discussed in the literature [2-4] of gender inequality in family law, parental authority, inheritance and
gender inequality is an important issue in itself, which is why we need the percentage of households headed by women.
indicators to compare the relative position of women and to investigate
the effect of gender inequality on economic growth. • Policy: political power describes the political representation
and decision making [8]. UNDP and [8], uses the most obvious
This paper is structured as follows: Section I presents the indicator for power on women in politics.
construction of the index of gender inequality (GII). Section II presents
the theoretical and empirical links between gender inequality and • Education, access to education is measured arithmetic mean
economic growth. of male and female rates of literacy. It is also measured by the net
enrollment in primary, secondary and tertiary education.
The gender inequality index
• Health: Access to health care is measured against life
The Gender Inequality Index is a composite index constructed expectancy and maternal mortality rates.
by aggregating individual indicators on the basis of an underlying
model of a multidimensional phenomenon (OECD, 2003). Composite
indicators are recognized as a powerful tool because they allow you to *Corresponding author: Karoui Khayria, Unit Development Economics Research
make simple comparisons between countries. (URED), Business School, University of Sfax, Tunisia, Tel: +216 74 242 951;
E-mail: [email protected]
Economic processes are becoming more complex, that is why
Received  August 06, 2015; Accepted August 24, 2015; Published August 31,
economists need a drawing tool, which takes into account all the 2015
dimensions of a multidimensional phenomenon (OECD, 2003). A
Citation: Khayria K, Feki R (2015) Gender Inequality and Economic Development.
composite index is used whenever a plurality of variables is necessary Bus Eco J 6: 180. doi:10.4172/2151-6219.1000180
for the evaluation of macro-economic dimension [5]. Moreover, the
composite indicators are easier to interpret than to identify common Copyright: © 2015 Khayria K, et al. This is an open-access article distributed under
the terms of the Creative Commons Attribution License, which permits unrestricted
across many different indicators trends, and also become a powerful, use, distribution, and reproduction in any medium, provided the original author and
useful tool in the performance of countries [6]. Despite, composite source are credited.

Bus Eco J
ISSN: 2151-6219 BEJ, an open access journal Volume 6 • Issue 4 • 1000180
Citation: Khayria K, Feki R (2015) Gender Inequality and Economic Development. Bus Eco J 6: 180. doi:10.4172/2151-6219.1000180

Page 2 of 3

• Economic resources include access to land, economic enrollment. The reverse was shown in the regressions some empirical
resources and other assets. studies in which gender inequality in education has a positive effect on
economic growth.
• The employment and income: refers to the distribution
of paid and unpaid wage differentials formal and informal [8]. This Gender inequality in education is found to have negative effects on
dimension is measured using the following variables: the economic economic growth by reducing the average amount of human capital
rights of women, the proportion of women in technical, professional and the exclusion of talented girls educational opportunities that could
and administrative domain, the ratio of male and female earned income do better than boys. It is suggested that educational inequality based
over the rate of economic activity and the proportion of women in the on gender downgrades the quality of human capital and the slowdown
workforce (Figure 1). of economic growth [3]. Similar findings were made by Elizabeth et al.
[10] taking into account the externalities generated by the education of
According to this figure a large gap between regions is observed. women, such as reduced fertility.
South Asia (SA) has the worst score with an average of 0.63. These
results can be explained by the high level of discrimination against Baldwin and Johnson [11] discussed the negative effects the wage
women in the dimensions of identity, health and family. In order to gap between the sexes in terms of participation of women in the
promote economic empowerment of women and integrate them into workplace, arguing that women may choose to participate in the labor
the process of economic growth should reduce inequalities in the market if they are paid lower wages.
dimensions of identity and family. The employment gap is also discussed in the literature. For example
Kalsen and Lamanna [4] studied the effect of the gender wage gap on
Countries in sub-Saharan Africas (SSA) and Middle East and
economic growth in a cross-country analysis for the period [1960-
North Africa (MENA) after an average of 0.48 and 0.46. The situation
2000]. The results indicate that the employment gender gap is one
of women in sub-Saharan Africa is characterized by discrimination
of the main determinants of growth differentials between countries.
in great physical integrity and access to educational and economic
The low participation of women in some regions, particularly the
resources. This situation may create distractions is in access to
Middle East and North Africa can be described as a major cause of
educational and economic resources. In sub-Saharan Africa the
underdevelopment [12-14].
gender inequality seems to have a weak relationship with economic
performance. Methodology
In the MENA region, gender inequalities are especially high in We use the following specification to estimate the direct effects
dimensions of employment and politics. The representation of women of gender inequality on economic growth in the case of the Maghreb
in economic and political power is almost nonexistent. countries, this study uses time series data for the period [1985-2011]
using the GMM dynamic panel.
Theoretical and empirical links between gender inequality
and economic growth LYit =c+σLYit-1 +β1LNVit+β2LPOP+β3INGit+εit (1)
The relationship between gender inequality and economic growth With: i=1……N, t=1……T
is not very clear. A portion of the authors indicate that there is a
With: LY is the growth rate of gross domestic product (GDP) per
positive relationship between gender inequality and economic growth,
capita, L INV is the investment rate as a percentage of GDP, L POP is
while others show that this relationship is rather negative. Galors and
the growth rate of the population, ING: measuring gender inequality
Weil describe this gender gap in education and earnings are due to
and εit is the error term [15-16].
high fertility and low economic growth. The same result was presented
by [9] in a model of overlapping generations. Women's education is Empirical Result
considered beneficial for economic growth.
These estimates were made using the method of GMM
Hill and King [2] show that the effect of gender inequality on dynamic panel system, which allows us to correct any problems of
growth is measured by the investment gap between male and female heteroscedasticity. The results lead us to estimate that the index of
gender inequality in a negative and significant at the 5% ratio. These
results confirm that gender inequality negatively affect economic
GII per regions growth in terms of human capital. This confirms the economic theory
[17,18]. The rate of investment has a negative and significant at the
0.7 10% coefficient Thus, to promote economic growth, gender equality
0.6 in various dimensions can be an effective tool to promote economic
growth. Why these results support the view of the World Bank [1].
0.5
The rate of population growth has a positive and significant at the 5%
0.4 ratio. This shows that gender inequality positively affect the growth of
0.3 GII the population, which is defined by Bloom and Williamson. Finally,
the lagged endogenous variable is statistically significant, assuming
0.2
a positive sign to 5% [19,20]. The latter reflects the economic growth
0.1 registered during a year depends negatively on those of past years
0 (Table 1).
ECA EAP LAC SSA MENA OECD SA
Number of observations= 130,
Source: Own computation
Figure 1: Shows the large gap between regions.
Sargan test: Chi square (125)=123.97, AR(1) test : N(0,1)=-5.31
[0.000], AR(2) test: N(0,1)=-1.26 [0.207].

Bus Eco J
ISSN: 2151-6219 BEJ, an open access journal Volume 6 • Issue 4 • 1000180
Citation: Khayria K, Feki R (2015) Gender Inequality and Economic Development. Bus Eco J 6: 180. doi:10.4172/2151-6219.1000180

Page 3 of 3

Coefficient Standard Deviation T-Stat Sig 5. Munda G, Nardo M (2005a) Constructing consistent composite indicators: The
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ISSN: 2151-6219 BEJ, an open access journal Volume 6 • Issue 4 • 1000180