Female Empowerment and Economic Growth

Abstract

We discuss how inclusive institutions enhance technological change, the main driver of long-term economic growth. Specifically, institutions that promote female political empowerment advance technological change through a) increasing the number and variability of new ideas introduced in the economy and b) improving the selection of more efficient ideas. We test different implications from our argument by measuring three aspects of empowerment - descriptive representation, civil liberties protection, and civil society participation - across 182 countries and 221 years. Empowerment is positively related to subsequent growth, even when accounting for initial differences in income, past growth rates, democracy, and country- and year-fixed effects. The three sub-components of empowerment are also, individually, related to growth, although not as strongly as the aggregated concept. The relationship is retained across different regimes, time periods, and geographic contexts, but is clearer for "Non-Western" countries. Finally, empowerment enhances TFP growth, a proxy for technological change.