Source: The Economic Times
Less than two centuries ago, women had no legal existence apart from their husbands even in the Western world. Less than one century ago, women had no political rights in most countries. Even half a century ago, even in the most developed countries of today women faced severe discrimination in many areas of life, including in the labour market.

In contrast, in today's world there is a high correlation between measures of women's rights and GDP per capita income. Contemporary cross-country data shows women's rights and development are highly correlated. But what about causality? Does faster economic growth lead to more rights for women? Or does empowering women lead to higher economic growth? In short, which comes first, the chicken or the egg?

Most important, does that mean women in less developed countries will automatically gain more rights as these economies develop?

Empirical studies into the consequences and origins of women's rights suggest causality between economic development and women's rights runs in both directions. More rights lead to a redistribution of resources towards women and higher investment in both physical and human capital. Also when women are involved in politics, both as voters and as policymakers, there is a distinct shift in the composition of government spending.

A recent NBER paper* says economic forces behind the expansion in women's rights can be grouped into two broad categories. On the one hand, general cultural changes may change male attitudes towards women's rights. On the other hand, technological change may alter men's economic incentives for extending rights to women.

It would be easy to conclude from this that it is only a matter of time before women in less developed countries like India catch up with their Western counterparts. Technological progress enhances return to schooling and increases men's incentives to support women's rights. Thus, it is quite possible that as poorer countries develop, extending rights to women may happen naturally as a consequence of technological change that raises the demand for human capital.

But as the paper points out, there are some caveats. There are important differences between today's poor countries and the historical situation in rich countries. In the United States and England, the historical expansion of women's rights unfolded through distinct stages: basic economic rights came first, political rights were next, and equal treatment in the labor market and greater control over their own body ultimately followed.

In contrast, in most Asian and African countries women gained formal political rights (as part of the end of colonialism) before obtaining economic rights. Moreover, there are many specific traditions (such as foot binding, child marriage, and witch killings) affecting the rights of women that are specific to certain cultures.

Having said that there is no reason why women in poor countries today should be any more content with their present second-class status than their Western counterparts were less than a century ago. As the authors admit though substantial progress has been made in understanding the causes and consequences of the expansion of women's rights, many questions remain. Most importantly, more empirical and theoretical research is needed to identify the precise mechanisms underlying the economics of women's rights.

We need a better understanding of the nature of the gender asymmetries that underlie observed differences in behavior between men and women. It is not enough to say 'Men are from Mars, women are from Venus' though a sizeable part of the existing literature is implicitly or explicitly based on the assumption of a preference gap between men and women.

However such explanations for gender differences in behavior are hard to establish conclusively. If marital resources, for instance, are not split evenly upon divorce, women might favour more social insurance than men do. Similarly, if women have little access to savings technologies, they may invest more in children to insure their old age consumption. Similarly, endogenous specialisation in household production may lead women to act as if they cared more about children, even when the true preferences of men and women are symmetric. For now, we are none the wiser!

 

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