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Edited by Mark Setterfield
Chapter 18: Gender Equality and the Sustainability of Steady State Growth Paths
Stephanie Seguino and Mark Setterfield 1 Introduction The basic concern that motivates this chapter is the potential trade-off between gender wage equality and economic growth in developing countries. While some evidence suggests that gender equality may enhance long-run growth prospects (e.g. Hill and King, 1995; Tzannatos, 1999; Klasen, 2002; Knowles et al., 2002), in the short run, higher female wages can be contractionary (Blecker and Seguino, 2002; Seguino, 2000a, 2000b). And yet ideally, we would like to observe both more equality and more growth in developing economies. But if more of the former in fact causes less of the latter, then clearly this can become an obstacle to advocating for increased gender wage equality on the grounds of other criteria, such as equity (see Seguino, 2010 for further discussion). This chapter draws attention to a possible solution to this dilemma. It shows that, if we begin with a sufficiently high rate of growth (relative to potential),1 then even if increasing gender wage equality does reduce growth, this can be an unequivocally good thing if the growth rate is thus made more sustainable in the long run, in the sense that potential and real output grow at the same rate. In other words, we can find ourselves in a “win–win” situation where increasing gender wage equality results in increased sustainability of the growth rate, making it easier to advocate for increased equality as an end in itself. The remainder of the chapter is organized as follows. The next two...
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