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Macroeconomic Impacts of Gender Inequality and Informality in India
Author: Purva Khera
Series:
IMF Working Papers
Volume/Issue:
Volume 2016: Issue 016
Language:
English
Publication Date:
09 Feb 2016
DOI:
https://doi.org/10.5089/9781475590784.001
ISBN:
9781475590784
ISSN:
1018-5941
Pages:
66
Keywords:
WP; production function; gender inequality; informality; DSGE model; Indian economy; Bayesian estimation; gender wage gap; labor market; substitution effect; open economy; wage income; income effect; Women; Labor markets; Labor supply; Global; South Asia
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the macroeconomic interaction between informality and gender inequality in the labor market. A dynamic stochastic general equilibrium model is built to study the impact of gender-targeted policies on female labor force participation, female formal employment, gender wage gap, as well as on aggregate economic outcomes. The model is estimated using Bayesian techniques and Indian data. Although these policies are found to increase female labor force participation and output, lack of sufficient formal job creation due to labor market rigidities leads to an increase in unemployment and informality, and further widens gender gaps in formal employment and wages. Simultaneously implementing such policies with formal job creating policies helps remove these adverse impacts while also leading to significantly larger gains in output.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund