Gender Equality and Economic Complexity

New research article by Dr. Nguyễn Phúc Cảnh, Senior Research Associate at Health and Agricultural Policy Research Institute (HAPRI) in Economic Systems, online 9 September 2021.

Mr. Canh also presented this topic in HAPRI TALKS: Gender, equality and economic complexity.

DOI: 10.1016/j.ecosys.2021.100921

Highlights

• The effects of gender equality on economic development through economic complexity are examined.

• We use a global sample of 119 economies from 1991 to 2017.

• We investigate four main dimensions of gender equality: employment, health, education, and rights.

• The two-step system-GMM approach is used for the main estimation.

• Gender equality has benefits for economic complexity.

The study is the first attempt to examine the influence of gender equality on economic complexity. Specifically, we investigate the effects of four aspects (employment, health, education, rights) of gender equality with 20 variables in an economic complexity index. To deal with potential endogeneity, we used the two-step system–generalized method of moments approach with an unbalanced panel of data on 119 economies from 1991 to 2017. First, labor participation in industry or service sectors as well as wage and salaried employment by women appears to improve economic complexity, while women’s employment in agriculture, contributions to family workers, self-employment, and vulnerable employment have a negative impact. Second, better health conditions for women increase economic complexity. Third, gender equality in education has a positive impact on economic complexity. Fourth, the empowerment of women in terms of socioeconomic-political rights is a positive factor for economic complexity. Overall, gender equality has great benefits for economic complexity.

The study expands existing research on gender equality, economic complexity, and economic development by analyzing the impact of gender equality on economic complexity. Using a global sample of 119 economies from 1991 to 2017, the study finds that improvements in gender equality in employment, health, education, and rights positively influence economic complexity. Governments should prioritize efforts to address gender inequality, as it not only has social and political implications but also economic benefits in the long term. Policy focus on gender equality in different aspects can enhance economic sophistication. Future research should explore the long-term effects of gender equality considering other socioeconomic factors and the role of institutional quality in economic complexity.