“Gender inequality is a fact of life in most parts of the world, particularly in developing countries, where significant gaps between men and women are present in the labour market as well as in political representation or bargaining power in the household” (Cubares and Teignier, 2014; 260). In the Global Gender Gap Index 2014 of World Economic Forum, most countries in the bottom of the ranking (or the countries with high gender inequality) are developing countries. Many scholars have argued that gender inequality is detrimental to economic growth. However, there are also other studies (see Seguino, 2000) that argues gender inequality in terms of wage is positively correlated with GDP growth. This paper will examine how gender inequality and economic growth affects each other.
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Although there is relatively large literature that argues gender inequality negatively affects economic growth, significant number of studies have also argued that gender inequality generates some benefits in the economic development.
Impact of Economic growth in gender inequality
Theoretically, Cubares and Teignier (2014; 263) have listed three main channels how economic growth reduce the gender inequality. First is the “decline of fertility rate after a country reaches a critical income threshold would naturally facilitates the incorporation of women into the labour market” thus lead to an increase in the resource endowments of the women’s child.
Technological progress of the country is another mechanism that helps reduce the gender gap. Most women devotes their time in household activities that prevents them in participating the labour market and introducing some labour-saving consumer durables in the household (like vacuum cleaners, washing machine, refrigerator, clothes iron) would engage female into the labour