DYNAMIC GENDER-SENSITIVE MACROECONOMIC GROWTH MODELS: LESSONS FROM THREE DEVELOPED ECONOMIES-USA, FINLAND AND SWEDEN

Abstract

The study estimated gender sensitive macroeconomic endogenous systems using TSLS for 10 endogenous variables including GDP, capital formation, openness, FDI, savings, wealth, female employment, male employment, and both female and male labor force participation rates for the USA, Finland and Sweden; and a pool of fiscal, monetary, social and commercial policy variables.   The study established that the relationship between economic growth and gender disaggregated LFPR can be studied using either single equations or simultaneous systems depending on the causal relationships between the two; that economic growth does not necessarily lead to an increase in female/male LFPRs; that female LFPR can enhance male LFPRs and vice versa; that increasing the female LFPRs can increase saving while increasing male LFPRs can increase capital formation; that openness can have a positive effect on male LFRPs but a negative effect on female LFPRs; and that the endogenous variables, including real GDP as well as the  policy variables investigated had gender disaggregated effects on the LFPRs that may vary across  countries.  It is recommended that policy makers in different countries attempting to increase LFPRs of both females and males should undertake rigorous macroeconomic dynamic analysis to identify the macroeconomic variables (including but not limited to economic growth variables) as well as the specific fiscal, monetary, social and commercial variables that have either positive or negative effects on the gender disaggregated LFPRs; and based on the findings, to design active labor market, fiscal, monetary, social and commercial policies that can increase gender equality as well as lead to economic growth.