Accounting for Gender in Asian Economic Growth

Absent from the important debate on the determinants of rapid Asian growth is the role of gender inequality. This paper argues that gender wage inequality has stimulated growth, with Asian economies that disadvantaged women the most growing the fastest from 1975 to 1990. Low female wages have spurred investment and exports by lowering unit labor costs, providing the foreign exchange to purchase capital and intermediate goods which raise productivity and growth rates. These results contrast with recent studies that argue income equality at the household level contributed favorably to Asian growth by reducing political conflict. The divergent findings can be explained by the fact that gender norms and stereotypes that convince women to accept their low status curb labor and political unrest, stimulating investment. The results indicate that which group bears the burden of inequality in the process of economic growth matters.