Gender and the Demographic Dividend Karen Oppenheim Mason East-West Center.

Gender and the Gender and the Demographic Demographic

DividendDividendKaren Oppenheim MasonKaren Oppenheim Mason

East-West CenterEast-West Center

National Transfer Accounts2

OutlineOutline

1.1. What is the demographic dividend?What is the demographic dividend?

2.2. What role might gender play in the What role might gender play in the demographic dividend?demographic dividend?

3.3. What is the evidence about gender What is the evidence about gender and the demographic dividend?and the demographic dividend?

4.4. Report on ICRW StudyReport on ICRW Study

1. What is the 1. What is the demographic demographic dividend?dividend?


The demographic dividendThe demographic dividend

► Refers to the economic growth that Refers to the economic growth that results when fertility declinesresults when fertility declines

► Fertility decline temporarily reduces Fertility decline temporarily reduces the dependency ratio the dependency ratio

► If the “extra” income is invested If the “extra” income is invested wisely, per capita income will growwisely, per capita income will grow

National Transfer Accounts570,000 60,000 50,000 40,000 30,000 20,000 10,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

FemaleMale

India 2005

Source: United Nations Population Division 2006.


2,500 2,000 1,500 1,000 500 500 1,000 1,500 2,000 2,500

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

Thousands

S. Korea 2005FemaleMale

Source: United Nations Population Division 2006.


The Most Important Graph in the World:An Asian Economic Lifecycle

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What are wise investments?What are wise investments?

►Physical capital: savings accounts, Physical capital: savings accounts, equity markets, etc.equity markets, etc.

►““Human capital:” education, health Human capital:” education, health care, nutrition care, nutrition

►Both government & household invest-Both government & household invest-ments will workments will work

►But whether investment occurs But whether investment occurs depends on policiesdepends on policies


Policies that encourage Policies that encourage investmentinvestment

►Economic and political stabilityEconomic and political stability►Reliable banking and investment Reliable banking and investment

systemssystems►Openness to tradeOpenness to trade► Incentives to invest in human capital Incentives to invest in human capital

(health, education)(health, education)►Type of pension system (asset-based Type of pension system (asset-based

versus pay-as-you-go)versus pay-as-you-go)

2. What role might 2. What role might gender play in the gender play in the demographic dividend?demographic dividend?


Gender systemsGender systems

► Refers to the socially prescribed roles Refers to the socially prescribed roles & rights of women and men& rights of women and men

► Culturally agreed on and enforced, so Culturally agreed on and enforced, so it’s a feature of groupsit’s a feature of groups

► Important for the DD are restrictions Important for the DD are restrictions on women’s freedom of movement, on women’s freedom of movement, ability to operate in public venues ability to operate in public venues (e.g., schools, factories), and ability (e.g., schools, factories), and ability to make decisions within the to make decisions within the household & familyhousehold & family


Five possible effects of non-Five possible effects of non-restrictive gender systemsrestrictive gender systems1.1. Increased investment in female Increased investment in female

educationeducation

2.2. Rising female labor force participation Rising female labor force participation rates rates

3.3. Increased investments in children’s Increased investments in children’s human capitalhuman capital

4.4. Increased household savings or Increased household savings or investmentinvestment

5.5. Declining familial support of the aged (an Declining familial support of the aged (an incentive to save for old age)incentive to save for old age)


1. Investment in female 1. Investment in female educationeducation

► Fertility decline reduces the value of girls’ domestic Fertility decline reduces the value of girls’ domestic labor (fewer siblings to care for)labor (fewer siblings to care for)

► Rising income & smaller family size also reduce Rising income & smaller family size also reduce parents’ need to ration their investments in parents’ need to ration their investments in children (a well-established finding)children (a well-established finding)

► So parents are more willing to invest in girls’ So parents are more willing to invest in girls’ schooling (unless gender norms seclude girls)schooling (unless gender norms seclude girls)

► Rising educational levels of both sexes encourage Rising educational levels of both sexes encourage later ages at marriagelater ages at marriage

► Later age at marriage allows parents to reap the Later age at marriage allows parents to reap the monetary rewards of investing in girls’ schoolingmonetary rewards of investing in girls’ schooling

► So where girls’ freedom of movement is not So where girls’ freedom of movement is not severely restricted, “extra” income may be used to severely restricted, “extra” income may be used to invest in female education invest in female education


2. Rising female labor force 2. Rising female labor force participation ratesparticipation rates

► Low fertility & increased life expectancy reduce Low fertility & increased life expectancy reduce the length of the child-rearing yearsthe length of the child-rearing years

so the number of years women are available for labor so the number of years women are available for labor force participation increasesforce participation increases

► Better educated workers can command higher Better educated workers can command higher wages, so rise in female schooling makes their wages, so rise in female schooling makes their employment more attractiveemployment more attractive

► Once low fertility cohorts reach working age, Once low fertility cohorts reach working age, the growth of the labor force slows, wages rise, the growth of the labor force slows, wages rise, and more women are attracted into the work and more women are attracted into the work forceforce

► All these effects, however, depend on a gender All these effects, however, depend on a gender system that does not severely restrict women’s system that does not severely restrict women’s freedom of movementfreedom of movement


3. Investment in children’s 3. Investment in children’s human capitalhuman capital

► Studies from a variety of settings show that Studies from a variety of settings show that women are more likely than men to invest in women are more likely than men to invest in children’s health, nutrition and schoolingchildren’s health, nutrition and schooling

Studies include Bangladesh, Brazil, Canada, Cote Studies include Bangladesh, Brazil, Canada, Cote d’Ivoire, Ethiopia, Indonesia, South Africa, Taiwan, and d’Ivoire, Ethiopia, Indonesia, South Africa, Taiwan, and the U.S. the U.S.

► So rise in women’s employment may encourage So rise in women’s employment may encourage greater investments in children’s human capital greater investments in children’s human capital (daughters’ (daughters’ andand sons) sons)

► But this effect depends on whether women are But this effect depends on whether women are able to determine how money is spent, i.e., on a able to determine how money is spent, i.e., on a gender system that gives wives some degree of gender system that gives wives some degree of economic autonomy or powereconomic autonomy or power


4. Increased household 4. Increased household savings?savings?► Women face greater economic insecurity in Women face greater economic insecurity in

old age than men doold age than men do► Gender bias in the ownership of land and Gender bias in the ownership of land and

other real estate undermines women’s other real estate undermines women’s ability to fund old age support from ability to fund old age support from accumulated wealthaccumulated wealth

► So with rise in women’s employment, So with rise in women’s employment, women may save for their old age more women may save for their old age more than men dothan men do

► Households may also see women’s earnings Households may also see women’s earnings as “extra” income and may be more as “extra” income and may be more inclined to save or invest such income than inclined to save or invest such income than an equal amount earned by the husbandan equal amount earned by the husband


5. Declining familial support of the 5. Declining familial support of the agedaged► Upward intergenerational transfers from Upward intergenerational transfers from

family members or the state are thought to family members or the state are thought to reduce the propensity to save for old agereduce the propensity to save for old age

► Studies find less intergenerational co-Studies find less intergenerational co-residence with rising female education and residence with rising female education and employmentemployment

► Daughters-in-law are less available to care Daughters-in-law are less available to care for elderly parents when they are workingfor elderly parents when they are working

► So rising female employment may undermine So rising female employment may undermine upward transfers from family members upward transfers from family members (although increased income may help to fund (although increased income may help to fund such transfers)such transfers)

3. What is the evidence 3. What is the evidence about gender and the about gender and the demographic dividend?demographic dividend?


General pictureGeneral picture

► Much evidence that gender equality Much evidence that gender equality contributes to economic growth (see contributes to economic growth (see World Bank, World Bank, Engendering Development)Engendering Development)

► But little evidence on the extent to which But little evidence on the extent to which gender is important in creating a gender is important in creating a demographic dividenddemographic dividend

► Will review some of the general evidenceWill review some of the general evidence


Closing the gender gap in schooling promotes economic growth

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East Asia vs. the Middle EastEast Asia vs. the Middle East

►East Asia has enjoyed a very large East Asia has enjoyed a very large demographic dividenddemographic dividend

►The Middle East/North Africa region has The Middle East/North Africa region has not thus far, despite declining fertilitynot thus far, despite declining fertility

►Why?Why?►One reason may be the restrictive One reason may be the restrictive

gender systems found in MENA vs. the gender systems found in MENA vs. the less restrictive ones found in East Asialess restrictive ones found in East Asia


Female Labor Force Participation Rate (ages 15 and over)

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Percentage of Working Women Employed in Manufacturing

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“ “It is difficult to imagine East Asia’s It is difficult to imagine East Asia’s labor-intensive, export-led labor-intensive, export-led industrialization occurring without the industrialization occurring without the efforts of female workers, whose labor efforts of female workers, whose labor fueled the growth in manufacturing fueled the growth in manufacturing and helped to moderate wage and helped to moderate wage growth.”growth.”

John Bauer 2001, pp. 366-7John Bauer 2001, pp. 366-7


Needed researchNeeded research

►How do changes in age structure How do changes in age structure affect female education and affect female education and employment?employment?

►How does female employment affect How does female employment affect household saving rates?household saving rates?

►How do changes in female education How do changes in female education and employment affect familial and employment affect familial support for the elderly?support for the elderly?

4. Report on an ICRW 4. Report on an ICRW StudyStudy


ReferenceReference

Based on a paper by Jeffrey Based on a paper by Jeffrey Edmeades, Janna McDougall, Anju Edmeades, Janna McDougall, Anju Malhotra & Margaret Greene, “Gender Malhotra & Margaret Greene, “Gender Equality and the Demographic Equality and the Demographic Dividend,” presented at the PAA Dividend,” presented at the PAA Meeting, New Orleans, April 17-19, Meeting, New Orleans, April 17-19, 20082008


Research DesignResearch Design

► Country-level growth regressions that build Country-level growth regressions that build on the Bloom-Canning-Malaney (2000) on the Bloom-Canning-Malaney (2000) modelmodel

► Hypothesis is that gender inequality in Hypothesis is that gender inequality in education (a) slows economic growth, and education (a) slows economic growth, and (b) reduces the positive effects of a (b) reduces the positive effects of a favorable age structure on growthfavorable age structure on growth

► Reasoning is that inequality represents lost Reasoning is that inequality represents lost human capital and productivityhuman capital and productivity


DataData

► Data for 82 countries covering six five-Data for 82 countries covering six five-year periods,1965-1999 (N = 470) – year periods,1965-1999 (N = 470) – Ghana & S. Africa removed as “outliers”Ghana & S. Africa removed as “outliers”

► All data time-varying with independent All data time-varying with independent variables measured in the base year for variables measured in the base year for each periodeach period

► Dependent variable is the logged Dependent variable is the logged annual average percentage growth of annual average percentage growth of real GDP per capita measured in PPPsreal GDP per capita measured in PPPs


Data, continuedData, continued

► Gender inequality is measured as the ratio of Gender inequality is measured as the ratio of female to male years of completed secondary female to male years of completed secondary schooling in the population 15+ years of age schooling in the population 15+ years of age (model also includes “total schooling” as stock (model also includes “total schooling” as stock measure)measure)

► Inequality is treated as a dummy variable Inequality is treated as a dummy variable classification:classification:

1.1. Female/male > 1.0Female/male > 1.02.2. .75 = or < Female/male = or <1.0.75 = or < Female/male = or <1.03.3. Female/male < .75Female/male < .75

► Reason for this choice is not discussed in the Reason for this choice is not discussed in the paperpaper


ModelsModels► Basic model predicts growth from age structure (log Basic model predicts growth from age structure (log

[15-64/N]), base-year GDP, tropics dummy, landlocked [15-64/N]), base-year GDP, tropics dummy, landlocked dummy, quality of institutions, openness of economy, dummy, quality of institutions, openness of economy, total schooling, growth in total population, % of GDP total schooling, growth in total population, % of GDP from agriculture, and period dummiesfrom agriculture, and period dummies

► Second model adds the educational inequality dummiesSecond model adds the educational inequality dummies► Third model adds the interaction between base-year Third model adds the interaction between base-year

GDP and age structure (I’ll ignore this model)GDP and age structure (I’ll ignore this model)► Final model adds interaction terms for (a) gender Final model adds interaction terms for (a) gender

inequality & age structure, (b) gender inequality & base-inequality & age structure, (b) gender inequality & base-year GDP, and (c) gender inequality & pop growthyear GDP, and (c) gender inequality & pop growth

► They also run separate models within each of the three They also run separate models within each of the three gender inequality groupsgender inequality groups


Selected Results 1Selected Results 1

Variable Model 1 Model 2 Model 4 Age structure

6.8**

6.7**

2.3

F ed > m ed

--

0.5

0.7

F ed = m ed

--

0.6*

0.9***

F>m * age str -- -- 26.5*** F=m * age str -- -- 10.6***


Selected Results 2Selected Results 2

Variable F<M F=M F>M Age structure

1.9

13.2***

14.1***

Initial GDP -2.4*** -2.9*** -3.6*** Age * Int GDP -7.7*** -2.9 -3.0


QuestionsQuestions

►What would results look like if there What would results look like if there were fewer interactions in the models?were fewer interactions in the models?

►How did the “outliers” affect the How did the “outliers” affect the results – and why did removing only 12 results – and why did removing only 12 observations out of 482 change the observations out of 482 change the results substantially?results substantially?

► Is gender inequality in education what Is gender inequality in education what is driving these results or is it some is driving these results or is it some other correlated variable?other correlated variable?


AcknowledgementAcknowledgement

Support for this project has been provided by the Support for this project has been provided by the following institutions:following institutions:

► the John D. and Catherine T. MacArthur Foundation; the John D. and Catherine T. MacArthur Foundation; ► the National Institute on Aging: NIA, R37-AG025488 the National Institute on Aging: NIA, R37-AG025488

and NIA, R01-AG025247; and NIA, R01-AG025247; ► the International Development Research Centre the International Development Research Centre

(IDRC);(IDRC);► the United Nations Population Fund (UNFPA); the United Nations Population Fund (UNFPA); ► the Academic Frontier Project for Private Universities: the Academic Frontier Project for Private Universities:

matching fund subsidy from MEXT (Ministry of matching fund subsidy from MEXT (Ministry of Education, Culture, Sports, Science and Technology), Education, Culture, Sports, Science and Technology), 2006-10, granted to the Nihon University Population 2006-10, granted to the Nihon University Population Research Institute.Research Institute.

The EndThe End

Gender and the Demographic Dividend Karen Oppenheim Mason East-West Center.

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Transcript of Gender and the Demographic Dividend Karen Oppenheim Mason East-West Center.