Gender, Distribution, and Balance of Payments (revised 10/08)

An unresolved debate in the development literature concerns the impact of gender inequality on economic growth. Previous studies have found that the effect depends on the time frame (short or long run) and the measure of inequality. This paper expands that discussion by considering both the short and long run, and evaluating the effects of gender equality in two types of economies—semi-industrialized economies (SIEs) and low-income agricultural economies (LIAEs). Explicitly, the paper identifies the pathways by which gender equality can affect short and long run macroeconomic output and growth. Further, it incorporates the effect of gender equity on the balance of payments constraint to growth. These preliminary results suggest that gender equality is more likely to stimulate growth in LIAEs than SIEs in both the short and long run. Stephanie Seguino is a PERI Research Scholar, and Associate Professor of Economics and Associate Dean of the College of Arts and Sciences at the University of Vermont.This paper was revised in October 2008.