Effects of Reducing Gender Gaps in Education and Labour Force Participation on Economic Growth in the OECD

This paper assesses the extent to which the increase in women’s human capital, as measured by educational attainment, has contributed to economic growth in OECD countries over the past five decades. Using cross-country/time series data covering 30 countries from 1960 to 2008 on education (the Barro-Lee dataset) and growth (update of OECD data), our results point out a positive and significant impact of the increase in women’s educational attainment relative to men on output per capita growth – as measured by GDP per capita. This increase in female educational attainment implies that the comparative advantage of men relative to women regarding educational attainment has weakened over time, and has even reversed in many countries. We find that the increase in the years of education of the total population has a positive influence on output per capita growth (around 10% of GDP per capita increase per additional year of education on average), and that a more equal ratio of education by gender boosts economic growth. Our results are robust to the use of estimation procedures that do not impose homogeneity restrictions on the speed of adjustment and short-run parameters, to control for endogenetiy due to possible reverse causality and to several other robustness tests. Last, but not least, we look at the potential effect of increased female labour force participation on economic growth. The size of the effect is dependent on the rate at which male and female labour force participation will converge, with a potential gain of 12% to the size of the total economy by 2030, on average across OECD countries, if complete convergence occurs in the next 20 years.