Helping women may provide fillip for economy

• Pages: 17-29

Page 17

A new IMF study that explores the policy effects of gender finds that women's lack of opportunities, both absolutely and relative to men, inhibits economic growth. Reducing gender inequality and improving the status of women may contribute to higher rates of economic growth and greater macroeconomic stability. Thus, macroeconomic policies should take into account the benefits of reducing gender inequalities, especially in the lowest-income countries, where these differences are most pronounced.

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Boosting women's status may help strengthen economic growth

Arecent IMF Working Paper examined how differences in economic choices between men and women may lead to different outcomes for the macroeconomy and thus have implications for desirable fiscal and monetary policies.

Gender-based differences in economic behavior have long been integrated into models of economic development and in the fields of labor economics and public finance. However, in the past two decades, researchers have studied the macroeconomic implications of gender-based differences.

The United Nations' Millennium

Development Goals have explicitly linked economic progress to the equalization of opportunities for women. These goals thus recognize the importance not only of raising the status of women, but also of narrowing disparities between women and men. These gender disparities are often greatest in the poorest countries.

IMF economist Janet Stotsky explored the impact of gender in macroeconomic policy. She found the following:

* Gender-based differences in behavior that are systematic and widespread can influence macroeconomic variables, such as aggregate consumption, savings, investment, and risk-taking behavior. These differences may also influence public choice and the scope of government, which have macroeconomic repercussions.

* Gender influences consumption behavior in part through differences in behavior within the household.

Women tend to devote a larger share of household resources to meeting the household's basic requirements and to fostering their children's potential.

* Gender influences savings and investment and risktaking behavior. Women tend to have a higher propensity to save and to invest in productive ways. They also show greater...