The Effect of Global Gender Inequality and Female Employment on The Economic Growth: Panel ARDL

Abstract

Purpose of study: This study aims to analyze whether global gender inequality and female employment have any short-term and long-term effects on economic growth in OECD countries and to explore the existence and direction of causality between global gender inequality, women’s employment, and economic growth in OECD countries during the study period.

Design/Methodology/Approach: In the study, the dependent variable is the person Per Capita Growth, and the dependent variables are the Global Gender Gap Index (GGGI) and Female Labor Force Participation Rate (KIKO). The data set of the variables consists of the period 2006-2023. The relationship between the variables was tested with the Pooled Mean Group (PMG) Panel ARDL test. In addition, the Pairwise Dumitrescu Hurlin (PDH) Panel Causality test was used to measure homogeneous or heterogeneous causality between the variables.

Findings: According to the results of the PMG Panel ARDL test; while it was determined that only the KIKO data affected Economic Growth in the short term, it was concluded that both independent variables affected the dependent variable in the long term. According to the PDH Panel Causality Test, it was determined that there is a bidirectional heterogeneous causality relationship between gender inequality and economic growth. While women's employment is the heterogeneous cause of economic growth, economic growth is the homogeneous cause of women's employment. Finally, there is also a bidirectional homogeneous causality between women's employment and gender inequality.

Research Implications: According to the results of the Pooled Mean Group Panel ARDL test; a 1% increase in the GGGI independent variable causes a decrease of approximately 2.83% in the dependent variable PERGDP in the long term. On the other hand, a 1% increase in the KIKO independent variable causes an increase of approximately 0.05% in PERGDP in long term. the short-term coefficients are examined as a group average, the KIKO independent variable affects PERGDP in the short term, while the GGGI independent variable does not affect PERGDP in the short term

Social Implications: When the analysis results obtained in this report are evaluated, they provide extremely strategic results for policymakers in the decisions they will make. The effect of gender inequality on economic growth allows the evaluation of gender differences in economic, educational, health, and political outcomes between women and men based on existing data. On the other hand, this study can contribute to both the contribution to national income and social and gender equality, considering the contribution that the increase in women's employment rate will provide to the country's economy in both the short and long term.

Originality/Novelty: In line with its purpose, this study is thought to fill the gap in the literature in terms of the period it covers, the countries, the variables used and the method chosen.

Keywords: Gender Inequality, Women’s Employment, Economic Growth, Panel ARDL, Global Gender Gap Index.