Gender equity and the escape from poverty

We set up a unified growth model with gender-specific differences in tastes for consumption, fertility, education of daughters and sons, and consider the intra-household bargaining power of spouses. In line with the empirical regularity for less developed countries, we assume that mothers desire to have no more children than fathers and to invest no less in education per child. We then show that female empowerment has the potential to promote the transition from a state of high fertility, low education, and sluggish economic growth towards a state of low fertility, high education, and fast economic growth if the child quantity-quality preferences of spouses differ substantially. In this case targeted policies to empower women have the potential to constitute a successful development strategy. We demonstrate the robustness of this finding with respect to endogenously evolving bargaining power and division of child-rearing time within the household.