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Goksu Aslan
,
Ms. Corinne C Delechat
,
Ms. Monique Newiak
, and
Mr. Fan Yang
We investigate the link between gender inequality in financial inclusion and income inequality, with three contributions to the recent literature. First, using a micro-dataset covering 146,000 individuals in over 140 countries, we construct novel, synthetic indices of the intensity of financial inclusion at the individual and country level. Second, we derive the distribution of individual financial access “scores” across countries to document a “Kuznets”-curve in financial inclusion. Third, cross-country regressions confirm that our measure of inequality in financial access is significantly related to income inequality, above and beyond other factors previously highlighted in the literature.
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper quantifies the effect of gender inequality in Morocco on growth, compared with groups of faster growing countries. The results highlight the effect of closing the overall gender gap, which would help narrow up to 1 percentage point the difference between Morocco’s GDP per capita and that of benchmark countries in other regions. Simulations also show that gradually closing gender gaps in the labor force participation rate could lead to significant income gains over the long term. Policy recommendations to promote gender equality include investing in secondary education for women and in infrastructure and reforming tax policies and laws that discriminate against women.
Ms. Dalia S Hakura
,
Mr. Mumtaz Hussain
,
Ms. Monique Newiak
,
Mr. Vimal V Thakoor
, and
Mr. Fan Yang
A growing body of empirical evidence suggests that inequality—income or gender related—can impede economic growth. Using dynamic panel regressions and new time series data, this paper finds that both income and gender inequalities, including from legal gender-based restrictions, are jointly negatively associated with per capita GDP growth. Examining the relationship for countries at different stages of development, we find that this effect prevails mainly in lower income countries. In particular, per capita income growth in sub-Saharan Africa could be higher by as much as 0.9 percentage points on average if inequality was reduced to the levels observed in the fastgrowing emerging Asian countries. High levels of income inequality in sub-Saharan Africa appear partly driven by structural features. However, the paper’s findings show that policies that influence the opportunities of low-income households and women to participate in economic activities also matter and, therefore, if well-designed and targeted, could play a role in alleviating inequalities.