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Macroeconomic Impacts of Gender Inequality and Informality in India

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  • Purva Khera

Abstract

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.

Suggested Citation

  • Purva Khera, 2016. "Macroeconomic Impacts of Gender Inequality and Informality in India," IMF Working Papers 16/16, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:16/16
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    Cited by:

    1. Ghani,Syed Ejaz & Grover,Arti & Kerr,Sari & Kerr,William Robert, 2016. "Will market competition trump gender discrimination in India ?," Policy Research Working Paper Series 7814, The World Bank.
    2. Janet G Stotsky & Asad Zaman, 2017. "The Influence of Gender Budgeting in Indian States on Gender Inequality and Fiscal Spending," Working Papers id:11587, eSocialSciences.

    More about this item

    Keywords

    Discrimination; Asia and Pacific; India; gender inequality; informality; DSGE model; Indian economy; Bayesian estimation; labor market; labor; workers; unemployment; labor force; Economics of Gender;

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