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Measuring the economic gain of investing in girls : the girl effect dividend

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  • Chaaban, Jad
  • Cunningham, Wendy

Abstract

Although girls are approximately half the youth population in developing countries, they contribute less than their potential to the economy. The objective of this paper is to quantify the opportunity cost of girls'exclusion from productive employment with the hope that stark figures will lead policymakers to reconsider the current underinvestment in girls. The paper explores the linkages between investing in girls and potential increases in national income by examining three widely prevalent aspects of adolescent girls'lives: early school dropout, teenage pregnancy and joblessness. The countries included in the analysis are: Bangladesh, Brazil, Burundi, China, Ethiopia, India, Kenya, Malawi, Nigeria, Paraguay, Senegal, South Africa, Tanzania, and Uganda. The authors use secondary data to allow for some comparability across countries. They find that investing in girls so that they would complete the next level of education would lead to lifetime earnings of today's cohort of girls that is equivalent to up to 68 percent of annual gross domestic product. When adjusting for ability bias and labor demand elasticities, this figure falls to 54 percent, or 1.5 percent per year. Closing the inactivity rate between girls and boys would increase gross domestic product by up to 5.4 percent, but when accounting for students, male-female wage gaps and labor demand elasticities, the joblessness gap between girls and their male counterparts yields an increase in gross domestic product of up to 1.2 percent in a single year. The cost of adolescent pregnancy as a share of gross domestic could be as high as 30 percent or as low as 1 percent over a girl's lifetime, depending on the assumptions used to calculate the losses.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5753.

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Date of creation: 01 Aug 2011
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Handle: RePEc:wbk:wbrwps:5753

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Keywords: Population Policies; Adolescent Health; Gender and Development; Primary Education; Gender and Education;

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  1. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  2. Hanushek, Eric A. & Woessmann, Ludger, 2007. "The role of education quality for economic growth," Policy Research Working Paper Series 4122, The World Bank.
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  12. John Donohue & Steven Levitt, 2000. "The Impact of Legalized Abortion on Crime," NBER Working Papers 8004, National Bureau of Economic Research, Inc.
  13. Wendy Cunningham & Maria Laura Sanchez-Puerta & Alice Wuermli, 2010. "Active Labor Market Programs for Youth : A Framework to Guide Youth Employment Interventions," World Bank Other Operational Studies 11690, The World Bank.
  14. Jorge Saba Arbache & Alexandre Kolev & Ewa Filipiak, 2010. "Gender Disparities in Africa's Labor Market," World Bank Publications, The World Bank, number 2520, October.
  15. Paul Schultz, T., 2002. "Why Governments Should Invest More to Educate Girls," World Development, Elsevier, vol. 30(2), pages 207-225, February.
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