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July 2024
It is quite stunning to reflect on how just under 80 years ago – and on the eve of independence from British colonial rule in India – the status of women in my home country was remarkably different. Only six percent of women were literate, the average woman was married at age 15, and 2,000 women died for every 100,000 live births. A lot has changed since then.
To start with, women and men obtained equal voting rights as India started democratic self-governance in 1947. There have been hard-won legal rights, and measurable changes in the economic and social well-being of women since then, in India and the rest of the world. And yet, certain fundamental legal reforms towards gender equality remain politically out of reach. The burgeoning literature on the “mutual interaction of economic and legal changes” (Doepke et al, 2012; Tertilt et al, 2024) showcases the ways in which economic development and legal gender equality interact and evolve. In this issue of our newsletter, we highlight a number of emerging insights on this theme for research and policy consideration.
Aishwarya Lakshmi Ratan
EGC Deputy Director
Research Highlight
Gendered Laws and Women in the Workforce
Hyland, Djankov & Goldberg [Journal Article]
This paper by EGC Affiliate Professor Penny Goldberg with co-authors Marie Hyland and Simeon Djankov sheds light on legal inequality between women and men with respect to economic opportunity, and how these inequalities have evolved over the past half century. The authors use the World Bank's Women, Business and the Law database to illustrate inequalities between genders on pay, treatment of parenthood, and a range of other variables. In the paper, the authors establish the following stylized facts.
Stylized Fact 1: A woman in the average country has three-quarters the rights of a man
In 2019 the global average Women, Business and the Law (WBL) population-weighted score was 74.4 out of 100 points (75.2 out of 100 using population-unweighted country scores), indicating that women are accorded about three quarters the number of rights as men. There is also significant variation by region in legal gender equality, as illustrated by Figure 1.
Figure 1: Regional average of aggregate WBL index
Source: Hyland, Marie, Simeon Djankov, and Pinelopi Koujianou Goldberg. 2020. "Gendered Laws and Women in the Workforce." American Economic Review: Insights, 2 (4): 482. Copyright American Economic Association; reproduced with permission of the American Economic Review: Insights
Stylized Fact 2: Women are most severely penalized when it comes to laws related to having children and getting paid
There are significant differences in the WBL score between the eight indicators covered. Figure 2 shows that for population-weighted WBL scores, women are most disadvantaged on equal pay laws. Conversely, mobility laws show the lowest level of gender inequality.
Figure 2: Global average of the eight WBL indicators
Source: Hyland, Marie, Simeon Djankov, and Pinelopi Koujianou Goldberg. 2020. "Gendered Laws and Women in the Workforce." American Economic Review: Insights, 2 (4): 482 Copyright American Economic Association; reproduced with permission of the American Economic Review: Insights
Stylized Fact 3: The last five decades have seen tremendous progress, but the pace of reform has differed across regions
As Figure 3 shows, whilst unweighted global WBL score has increased almost 30 percentage points from 46.4 to 75.2 in the five decades leading up to 2019, different regions have progressed at different paces.
Figure 3: Charting the progress of legal gender equality over time
Source: Hyland, Marie, Simeon Djankov, and Pinelopi Koujianou Goldberg. 2020. "Gendered Laws and Women in the Workforce." American Economic Review: Insights, 2 (4): 483 Copyright American Economic Association; reproduced with permission of the American Economic Review: Insights
Stylized Fact 4: The pace of reform varies not only across countries but also across individual indicators
Figure 4 illustrates progress on each of the indicators both when reforms are unweighted (panel A) and weighted by population (panel B). The Workplace indicator improved the most, yet the pay indicator still lags behind, despite starting from a relatively low base.
Figure 4: Charting the progress of individual indicators over time
Source: Hyland, Marie, Simeon Djankov, and Pinelopi Koujianou Goldberg. 2020. "Gendered Laws and Women in the Workforce." American Economic Review: Insights, 2 (4): 486 Copyright American Economic Association; reproduced with permission of the American Economic Review: Insights
Stylized Fact 5: Legal gender equality is positively correlated with women’s outcomes in the labor market
Results from OLS regressions show that the WBL index correlates with real economic outcomes. An increase of one point in the WBL index correlates with a 4.1 percent rise in female labor force participation and a 6.7 percent decrease in the gender wage gap.
