Towards Gender Equality Newsletter Issue #9: Talent and Its Allocation
The magic sauce of economic transformation, from the first static macro models developed to the complex big-data dynamic models used today, combines natural, financial, and human resources with innovation. The key ingredient here is productivity. If I can thread a needle in half the time it takes you, then I should do it. If you can complete endoscopic brain surgery with fewer errors than I can, then perhaps you should perform that task.
In this issue, we discuss fresh insights from our Gender and Growth Gaps project, under which we have conducted research for the past two years investigating what could go wrong in this allocative and matching process along gendered lines, with a focus on low- and middle-income countries.
We also highlight the work of peer researchers exploring this issue using robust micro-data and innovative models. If you think of applications for the gender distortions model presented below, we invite you to access the replication package posted and explore using this tool yourself!
Aishwarya Lakshmi Ratan
EGC Deputy Director
Research Highlight
The Global Gender Distortions Index (GGDI)
Goldberg, Gottlieb, Lall, Mehta, Peters, Lakshmi Ratan [Working Paper; EGC Article]
Despite important progress in recent decades, large and persistent gender gaps in labor market outcomes remain. Globally, women have lower labor force participation rates and earnings, are more often engaged in unpaid or informal work, and spend more time on family care and household production. While neoclassical approaches might view these disparities as efficient labor allocations stemming from men and women’s different comparative advantages, a more empirically grounded view is that they reflect distortions. These include demand-side factors (such as employer discrimination) and supply-side factors (such as safety and norms) that limit women’s full participation, leading to underutilization of skills and misallocation of labor.
This new EGC Discussion Paper by Goldberg, Gottlieb, Lakshmi Ratan, Lall, Mehta & Peters, shows how labor income and job type data can be used to infer these distortions and quantify their combined impact on aggregate productivity. The authors propose a single metric to estimate the macroeconomic productivity losses of gender distortions in the labor market, the “Global Gender Distortions Index (GGDI).”
Building on similar work by Hsieh et al. (2019) for the US, the GGDI is a model-based, scalar measure of gender-based misallocation, which the authors estimate for 51 countries. A GGDI value of 5 means that if gender distortions did not exist, overall output would be 5% higher. The GGDI goes beyond traditional indicators like GDP by incorporating both market and non-market work, including home production. The index is easy to implement; co-author Professor Penny Goldberg has provided a replication package on her page.
Insight 1: Global gender gaps persist in economic participation, types of work, and pay
Men consistently participate in wage work and self-employment at higher rates than women. In low-income countries, 37% of men but only 16% of women work for a wage, while 42% of men but only 28% of women are self-employed. These gaps narrow in high-income countries, suggesting greater labor opportunities for women. Women are more likely to do unpaid work – 15% in low-income countries compared to 5% of men. Wage gaps also remain large. Women earn 35 percentage points less in low-income countries, 20 percentage points less in middle-income countries, and 30 percentage points less in high-income countries.
Insight 2: Gender gaps in labor markets remain in many countries despite gains in education
The authors find that increased gender parity in education does not fully translate to parity in labor market outcomes. In low-income countries, self-employed women have 20% less schooling than men and women engaged in unpaid work have 43% less. In middle-income countries, the schooling gap among self-employed women disappears but is 37% among women in unpaid work. In high-income countries, on average women are more educated but still work less than men – suggesting persistent barriers to female labor force participation (FLFP).
Insight 3: GGDI tends to reduce with economic development but this is not guaranteed; there is wide cross-country variation
Across 51 countries, gender distortions are negatively correlated with economic development. However, large cross-country variation at similar income levels shows that growth and time do not automatically deliver gender equality – a result consistent with Agte et al. (2024). As Figure 1 shows, gender-based misallocation has fallen but at very different rates in Chile vs Brazil vs Mexico in recent decades. India saw little net change, despite rapid growth.
Figure 2 shows the GGDI’s negative correlation with GDP per capita as well as large cross-country variation. Eliminating distortions could raise GDP per capita by 24% in Egypt but just 5% in Peru, which is slightly richer. This highlights how country-specific factors shape gender-based misallocation and influence the potential gains from their reduction. Figure 2 also groups countries by region to underscore this heterogeneity.
Figure 1: The GGDI in different countries
Figure 2: The GGDI and economic development
Notes: The figure plots GGDI for all country observations near the year 2014 against their GDP per capita. The points are colored according to the continent they belong to. GGDI measure the increase in output from removal of labor demand and labor supply distortions.
Insight 4: Policies to reduce gender distortions in labor markets can increase FLFP and economic output
Removing gender barriers would raise female labor force participation and enhance productivity by enabling more efficient labor allocation. Figure 3 displays the change in FLFP in the absence of distortions, showing that these distortions significantly reduce it. Demand distortions are shown in blue and supply distortions are in pink. For most countries, demand distortions have a larger dampening effect on FLFP than supply distortions.
Moreover, demand distortions tend to be more responsive to policy change than entrenched supply-side barriers like social norms. Therefore, targeting only demand-side barriers can meaningfully increase women’s labor market participation, while delivering close to the same economic benefits.
Figure 3: Distortions and FLFP
Notes: The figure shows the change in female labor force participation (FLFP) by removing all demand and supply distortions, respectively, for all countries, plotted against their GDP per capita. The size of points are proportional to the country’s population. The sample for the plot is all country observations near the year 2014.
Insight 5: GDP gains from reducing gender distortions would likely exceed GGDI estimates
The authors then compare the effects of eliminating demand and supply distortions when measured by the GGDI versus GDP. Figure 4 shows that estimated GDP gains are uniformly higher – suggesting that our GGDI estimates understate the gains policymakers would see in official GDP statistics. Since the GGDI includes non-market activities such as home production, removing distortions allows women to shift into the types of market work that are measured by GDP.
Figure 4: The GGDI and the change in GDP
Notes: The figure plots GGDI and the change in measured GDP for all country x year observations in the sample against their GDP per capita. GGDI measure the increase in total economic activity (including home production) due to the removal of labor demand and labor supply gender distortions. Measured GDP is the increase in GDP following the removal of labor demand and labor supply gender distortions.
Featured Researcher: Lindsey Uniat
Lindsey Uniat is an Economist at the Federal Reserve Bank of San Francisco. She recently received her PhD in Economics from Yale University, where her research focused on macroeconomics and labor economics. She was awarded the NBER Gender in the Economy Dissertation Fellowship for the 2023–2024 academic year.
In a recent working paper, Uniat and co-authors examine how urban women in India allocate their time differently than rural women, and identify the structural factors underlying India’s rural–urban female labor force participation (FLFP) gap. They estimate a model of household labor supply and use it for counterfactual analysis, projecting how the gap may evolve in the coming decades under the status quo, as well as under more equal gender norms.
Her job market paper, “The Quiet Revolution and the Decline of Routine Jobs,” analyzes the movement of women out of routine clerical work and into non-routine professions in the U.S. The paper highlights the role of declining labor market distortions faced by women in shaping this transformation.
See Uniat's website for more information.
New Research
The Ms. Allocation of Talent
Lubczyk & Moser [Working Paper]
Despite improvements in the allocation of talent, women continue to be underrepresented in innovation. Linking 70,000 scientists with patents, the authors show that this underrepresentation continues a trend that was already in place for scientists born in the 1920s and that the low share of female scientists in patent-intensive STEM fields is the main driver of this persistent innovation gender gap. To estimate the causal effects of changes in the allocation of talent, the authors exploit an exogenous shock in participation due to WWII. As men enlisted in the war, the scarcity of male scientists pulled female scientists into STEM. Using variation in enlistment as an instrument for female entry, the authors find that one additional woman becomes an inventor for every five women entering STEM. Counterfactuals imply that if women were as likely to work in STEM fields as men, the innovation gender gap would close in 38, rather than 118 years.
Gender Gaps Across the Spectrum of Development: Local Talent and Firm Productivity
Ashraf, Bandiera, Minni, Quintas-Martínez [Working Paper]
The authors ask whether the gendered division of work affects firm productivity across the spectrum of economic development. Personnel records of over 100,000 individuals hired by a global firm that operates in 100 countries reveal that the performance of female employees is higher where women are underrepresented in the candidate pool. This implies productivity gains from hiring more women, but realizing them would require increasing women’s pay relative to men. The findings highlight how unequal gender norms in local labor markets create an equity-efficiency trade-off inside the firm, particularly in low-income countries with conservative gender norms.
The Gender Pay Gap: Micro Sources and Macro Consequences
Morchio & Moser [Working Paper]
Using linked employer-employee data from Brazil, the authors document a large gender pay gap due to women working at lower-paying employers with better non-pay attributes. To interpret these facts, the authors develop an equilibrium search model with endogenous firm pay, amenities, and hiring. The authors provide a constructive proof of identification of all model parameters. The estimated model suggests that amenities are important for both men and women, that compensating differentials explain half of the gender pay gap, and that there are significant output and welfare gains from eliminating gender differences. However, equal-treatment policies fail to achieve those gains.
Gender Barriers, Structural Transformation, and Economic Development
Chiplunkar & Kleineberg [Working Paper]
The representation and significance of women in the labor force have grown significantly over the past five decades around the globe. Using nationally representative data from over 90 countries, the authors document distinct gender patterns in employment transitions across both sectors and occupations during this period. Using a model of occupational and sectoral choice and focusing on six major economies, the authors find that declining gender barriers - defined as gender-specific distortions in employment and wages - have been a key driver of the observed rise in female labor force participation, the expansion of the service sector, and increases in real GDP per capita from 1970 to 2018, but with substantial variation across countries.
Policy Engagement & Events
Gender and Structural Transformation in South Asia
[Event Page; Conference Program & Speaker Bios]
On August 13, 2025, EGC, Inclusion Economics India Center (IEIC), and Yale Inclusion Economics held their third research-policy workshop on Gender and Growth Gaps in the South Asia region, partnering with the United Nations Development Program (UNDP) Asia-Pacific this year. The event convened researchers and policymakers to exchange insights on how structural transformation is shaping gender dynamics in labor markets across South Asia, and to identify actionable strategies for inclusive economic growth.
Harnessing Human Capital for Growth and Development in Kenya
[Event Page; Conference Program & Speaker Bios; Recap Article]
On June 30, 2025, the Yale Economic Growth Center and Yale Inclusion Economics convened a research and policy dialogue in Nairobi, Kenya, in which we discussed how macroeconomic transformation and growth strategies interact with gender gaps globally and in sub-Saharan Africa, how investing in early childhood development can boost human capital and women’s socioeconomic advancement in Kenya, how policies and programs can be effectively scaled, and how the digital economy can be boosted through equal participation.
Gender Gaps and Structural Transformation in a New Development Era
At an event organized by the Yale Economic Growth Center (EGC) and the Center for Global Development (CGD) and hosted by the Gates Foundation on the sidelines of the 2025 World Bank and IMF Spring Meetings, researchers shed light on how gender gaps interact with and are impacted by structural transformation, including processes of urbanization, industrialization, and digitalization. The recap article, written jointly between EGC and CGD, recounts how researchers at the event offered a rigorous challenge to those voices that have treated gender equality as peripheral to macroeconomics.
Kaveh Sardari
Speakers from the event organized by the Yale Economic Growth Center (EGC) and the Center for Global Development (CGD) and hosted by the Gates Foundation on the sidelines of the 2025 World Bank and IMF Spring Meetings.
Additional News and Resources
Pinelopi Koujianou Goldberg's Research Featured in The Times of India: “With <1% women being entrepreneurs, India far below global trendline”
In an article highlighting the low levels of female entrepreneurship in India, The Times of India cited recent research by EGC affiliate Pinelopi Goldberg and coauthor Gaurav Chiplunkar, a Yale PhD graduate.
In Conversation: Costas Meghir and Amer Hasan on Early Childhood Development
How can early childhood investments change the course of lives in lower-income countries? Meghir, a faculty affiliate of EGC and Inclusion Economics, and Hasan, a World Bank economist, share insights from interventions in Colombia, India, Indonesia, Kenya, and Pakistan.
Beyond participation: Why where women work matters
Yselle Flora Malah-Kuete [World Bank Blog]
For developing countries striving for stability, resilience, and sustained growth, simply getting more women into the workforce isn’t enough. New analysis across 125 developing countries shows a critical, often overlooked aspect: where women work profoundly shapes a country’s ability to diversify its exports and withstand shocks. Policy implications are evident—when more women work in industry, countries tend to diversify their export baskets more rapidly and become less vulnerable to volatility.