The Consequences of Gender Inequality on Latin America’s Economic Growth: Macroeconomic Evidence

Abstract

This research analysed the effect of gender inequality on the economic growth of seventeen countries in the Latin America and Caribbean (LAC) region from 1990 to 2016 using an ordinary least squares (OLS) regression model with fixed effects and a quantiles via moments model. Electricity consumption from new renewable energy sources, general government capital stock, private capital stock, trade openness, and urban population were used as control variables, and a battery of preliminary and post-estimation tests were conducted to guarantee the adequacy and suitability of both methodologies. The OLS model with fixed effects supports that gender inequality negatively affects gross domestic product (GDP) per capita. The quantiles via moments (QvM) model confirms the results of the OLS model with fixed effects and reveals that with increasing quantiles (25th, 50th, and 75th), gender inequality leads to decreases in LAC countries’ growth. LAC countries’ policymakers and institutions should improve gender equality to reach a higher development level and a more prosperous society. Developing policies that contribute to increasing women’s participation in the labour market, reducing the gender pay gap, supporting women’s education and training, constructing a more women-friendly and less patriarchal society, and developing measures to limit violence against women and early pregnancy and maternal mortality rates and increase women’s decision-making positions, particularly in public policy decision making, must be implemented.