The Effect of Increased Gender Equality on Economic Growth in Developing Countries

The purpose of this thesis is to investigate whether an increase in the level of human capital and reduction of gender inequality in the labor market affect developing nation’s growth rate and welfare. The data used in this thesis cover 74 emerging and developing countries for the years of 2001 and 2007. Solow’s augmented growth model has been used to estimate how increased rates of females and males completing primary school effects economic growth in order to see what effect the Millennium Development Goal’s (MDG) target of universal primary education has on the economy. The rates of female and male participation rates in the labor force are also tested for to see if one can determine how reduced gender inequality affects economic growth. The main findings are that increased female and male completion rates in primary school do affect economic growth positively as expected. However, what was not expected was that an increased participation rate of female and male in the labor force affect economic growth negatively. The conclusion is that increased levels of primary education among males and females will increase economic growth. Hence the MDGs of achieving universal primary education and homogenous education between females and males in 2015 are important for economic growth and increase of welfare.