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Inequality, Gender Gaps and Economic Growth : Comparative Evidence for Sub-Saharan Africa

Inequality, Gender Gaps and Economic Growth : Comparative Evidence for Sub-Saharan Africa
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Journal Issue
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Volume/Issue:
2016/111
Series:
IMF Working Papers
Author(s):
Dalia Hakura, Mumtaz Hussain, Monique Newiak, Vimal Thakoor, and Fan Yang
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
June 2016
DOI:
http://dx.doi.org/10.5089/9781484382349.001
ISBN:
9781484382349
ISSN:
1018-5941
Page:
29
A growing body of empirical evidence suggests that inequality-income or gender related-can impede economic growth. Using dynamic panel regressions and new time series data, this paper finds that both income and gender inequalities, including from legal gender-based restrictions, are jointly negatively associated with per capita GDP growth. Examining the relationship for countries at different stages of development, we find that this effect prevails mainly in lower income countries. In particular, per capita income growth in sub-Saharan Africa could be higher by as much as 0.9 percentage points on average if inequality was reduced to the levels observed in the fastgrowing emerging Asian countries. High levels of income inequality in sub-Saharan Africa appear partly driven by structural features. However, the paper's findings show that policies that influence the opportunities of low-income households and women to participate in economic activities also matter and, therefore, if well-designed and targeted, could play a role in alleviating inequalities.
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