Growth : Are Good Times Good

The relative status of women is poor in the developing world, compared to developed countries. Increases in per capita income lead to improvements in different measures of gender equality, suggesting that there may be market failures hindering investment in girls in developing countries, and that these are typically overcome as development proceeds. Gender inequality in education and health can also be explained to a considerable extent by religious preference, regional factors, and civil freedom. These systematic patterns in gender differentials suggest that low investment in women is not an efficient economic choice, and we can show that gender inequality in education is bad for economic growth. Thus, societies that have a preference for not investing in girls pay a price for it in terms of slower growth and reduced income. Views expressed are those of the authors and do not necessarily reflect those of the World Bank or its member countries. We would like to thank Bill Easterly, Beth King, Aart Kraay, Andrew Mason, and participants in a seminar at the World Bank for helpful comments, and Charles Chang for excellent research assistance.