Macroeconomic Impacts of Gender Inequality and Informality in India

February 9, 2016

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Purva Khera. Macroeconomic Impacts of Gender Inequality and Informality in India, (USA: International Monetary Fund, 2016) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the macroeconomic interaction between informality and gender inequality in the labor market. A dynamic stochastic general equilibrium model is built to study the impact of gender-targeted policies on female labor force participation, female formal employment, gender wage gap, as well as on aggregate economic outcomes. The model is estimated using Bayesian techniques and Indian data. Although these policies are found to increase female labor force participation and output, lack of sufficient formal job creation due to labor market rigidities leads to an increase in unemployment and informality, and further widens gender gaps in formal employment and wages. Simultaneously implementing such policies with formal job creating policies helps remove these adverse impacts while also leading to significantly larger gains in output.

Subject: Gender, Gender diversity, Gender inequality, Labor, Labor markets, Labor supply, Women

Keywords: Bayesian estimation, DSGE model, Gender inequality, Gender wage gap, Global, Income effect, Indian economy, Informality, Labor market, Labor markets, Labor supply, Open economy, Production function, South Asia, Substitution effect, Wage income, Women, WP

Publication Details

Pages:

66
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/016
Stock No:

WPIEA2016016
ISBN:

9781475590784
ISSN:

1018-5941

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