Essays on Gender and the Macroeconomy

The discourse on gender equality is one that has become increasingly popular in economic research and policy considerations. A large strand of this discourse appeals to the ideals of human dignity, societal welfare, fairness and justice. A second strand deals with the discussion of the evidence-based rationale for the case of gender equality, as to whether or not it promotes economic growth and development. This thesis focuses on this second set of arguments with particular interest in empirically investigating the channels through which gender equality can influence macroeconomic performance and vice-versa. This thesis contains three essays on the relationship between gender, distribution, public policy and the macroeconomy. These three essays form the main empirical component of the thesis (Chapters 4, 5 and 6) while the first three chapters lay the ground work for the research. Chapter 1 introduces the thesis, Chapter 2 explores the literature on gender and the macroeconomy, Chapter 3 provides a broad overview of the empirical methodologies employed throughout the rest of the thesis, and Chapter 7 concludes. The three [independent but related] empirical chapters employ multivariate econometric time-series analyses to examine long-run and short-run relationships between gender [in]equality and the components of aggregate demand and the role of public expenditure in promoting women’s economic empowerment. Chapter 3 employs a macroeconomic modelling strategy of demand-led growth to analyse the impact of gender inequality on aggregate consumption, using a disaggregated consumption function dependent on income from female wages, male wages and profits for four developed countries: Australia, Canada, the UK and the US. We base the choice of these countries on their demand-led characteristics as observed from previous studies. We find evidence to suggest that higher female wages and more bargaining power for women are associated with a larger positive effect on aggregate consumption in the short run and long run. This conclusion is especially true for the wage-led countries examined in this study (the UK and the US) and Australia which is a profit-led country. In Chapter 4, the empirical analysis investigates the potential impact of gender equality on a sustainable growth strategy. This investigation follows a traditional neo-Kaleckian macroeconomic demand-led growth model, which highlights an under-consumptionist view of growth, to examine the effect of a gender-equal income distribution on aggregate demand and its components in a group of high-, middle- and low-income countries. The empirical findings suggest that, overall, growth is profit-led in the short-run and wage-led in the longrun. Furthermore, conditions under which gender wage equality among workers can make the growth path of a country more wage-led or less profit-led are presented following the empirical results. In addition, we are able to show that global economic growth is gender equality-led and wage-led in the long-run. Having found that gender inequality may have substantial consequences on macroeconomic outcomes, Chapter 6 of this thesis examines the impact of public expenditure in the promotion of gender equality and well-being. To do this, a macroeconometric time-series analysis is employed to explore the effect of public expenditure components on various categories of the gender distribution of well-being (capabilities, livelihoods and empowerment) in Brazil, Russia, India, China and South Africa. The first conclusion is that public expenditure on social and physical infrastructure may have distinct gender effects. The second is that public expenditure is needed to improve women’s economic outcomes