A study quantifies income loss due to gender gaps in the labour market
If women do not have to face barriers to labour market and entrepreneurship, income in member countries of the Organisation for Economic Co-operation and Development (OECD) will increase by 15.5%. The figure turns into 17.5% in developing countries. This one of the main conclusions of a study developed by Marc Teignier, researcher at the University of Barcelona, and David Cuberes, economist at Clark University (United States). It is one of the first studies that quantify the effect of gender inequality on economics.
If women do not have to face barriers to labour market and entrepreneurship, income in member countries of the Organisation for Economic Co-operation and Development (OECD) will increase by 15.5%. The figure turns into 17.5% in developing countries. This one of the main conclusions of a study developed by Marc Teignier, researcher at the University of Barcelona, and David Cuberes, economist at Clark University (United States). It is one of the first studies that quantify the effect of gender inequality on economics.
The study emphasizes the role that women play in employership and self-employment. In this sense, authors estimate that, in OCDE countries, the expected income loss from excluding 5% of women is 2.5%, while the loss is 10% if they are all employers.
Considering regions, the study points out that Middle East, North Africa and South Asia are the areas with the highest income loss. If barriers were eliminated, citizensʼ income will increase by 37.83% in Middle East and North Africa, and by 24.91% in South Asia. In the case of Spain, researchers estimate that income loss due to occupational gender gaps is 15.2%. If we only take into account income losses in entrepreneurship, they reach 4.8%. If gender gaps were eliminated in Spain, income per capita would increase from 22,780 euros to 26,869.5. If only gender gaps in entrepreneurship were removed, income per capita would increase up to 23,926.06 euros.
The study, which is going to be published in the Journal of Human Capital, is based on an extension of the span-of-control model of Lucas (1978). Authors establish three different types of gender gaps: the difficulties that women face to become entrepreneurs (with employees); the problems they face to become self-employed, and labour market discrimination. It is important to highlight that the study does not consider the potential production taking place inside the household when women do not participate in the labour market.
Authors stress that although there is an extensive literature on the economic effects of excluding women from the labour market, there are not many studies that quantify this question. In fact, the International Monetary Fund has commissioned the development of some studies that will continue this research line.