Gender, youth, and growth: Unpacking the productivity–transformation nexus in Rwanda

The relationship between labor productivity and economic transformation, and their combined impact on labor market dynamics, remains insufficiently understood and highly country specific. This study applies an economywide analytical framework, using Rwanda as a case study, to examine how youth and women’s productivity influence economic growth and structural transformation, and how this transformation process, in turn, affects these groups. The results indicate that labor productivity gains—whether economywide or concentrated among youth—shift growth toward the industrial and service sectors, while growth in the agricultural sector is minimal. Increases in productivity of women’ labor generate more balanced growth across sectors and substantially enhance women’s industrial participation. Productivity gains of youth labor induce stronger structural shifts, as young workers move from agriculture to expanding industrial and service sectors, though this transition partially displaces adult workers. In general, labor income in these simulations rises broadly in line with GDP, with youth and women benefiting most under targeted scenarios. Sector-specific growth strategies yield distinct distributional effects, however: industry-led growth benefits women and adults, while service-led growth favors the versatile youth. Overall, productivity-driven structural transformation in Rwanda fosters welfare gains, although potential trade-offs between inclusiveness across gender and age groups and aggregate economic performance warrant further investigation. In conclusion, policy design in Rwanda should ensure that gains in aggregate economic growth are balanced with inclusive outcomes for women, youth, and adults.