are implemented to lift other binding constraint to growth. Therefore, we give this binding constraint a score of 4 in terms of its relevance to gender inclusion (see column (5) of Table 1).

Turkey’s attempt to address the binding constraint associated with low performance in technology absorption and innovation will produce limited results if the supply of skilled labor, including skilled female labor, is low. This is because skilled labor has been shown to complement new technologies (Acemoglu 1998) and the distortion associated with the undersupply of skilled female labor will give rise to a negative indirect welfare effect, d[μGs (τ) −μGp(τ)]/dτY < 0. According to Acemoglu (1998), a higher supply of skilled female labor initially means a decline in the skill premium, but the expansion of the market size for skill-complementary technologies encourages faster upgrading of the productivity of skilled workers and eventually strengthens the process of skill-biased technical change. In other words, Acemoglu’s theory – confirmed using data for the United States – suggests that new technologies are complementary to skills by design, not by nature. His approach suggests that countries that educate women but fail to provide conditions for their inclusion in the economy would grow more slowly because of two reasons: (1) a direct negative effect on potential growth due to lower supply of skills; and (2) an effect on productivity because of slower skill-biased technical change which manifests itself in lower technology absorption and innovation. Closing the gender employment gap of 35 percentage points among professional and technical workers, with women employed at 39% and men at 61%, would be hugely beneficial for growth, although this is not the largest participation gap. As a way of addressing Turkey’s low performance in technology absorption and innovation, public policy must deal specifically with the obstacles to economic participation of skilled female labor. We therefore rate the binding constraint associated with low performance in technology absorption and innovation as 4 from a gender inclusion perspective (see column (5) in Table 1).

What policy intervention might boost the labor force participation of women, particularly those with skills? Lack of affordable childcare is often noted as a reason for this constraint. It has been one of the crucial bottlenecks to solving low LFPR for women in other parts of the world, such as Japan and the Republic of Korea. This potentially “win-win intervention” would give a potential boost to Turkey’s medium-term growth performance through increases in potential growth and productivity, as suggested also by Guven and Rodrik (2016) and through faster technological absorption, as suggested by Acemoglu (1998). A public policy intervention to incentivize affordable quality childcare can be an immediate source of new job creation if less educated women are employed in childcare services and more educated women enter the workforce. The availability of affordable quality childcare will empower and motivate young mothers, especially those with skills, to seize opportunities in the labor market, producing positive national benefits in terms of increasing productivity and income generation.

Underdeveloped financial markets – the third most severe constraint to growth - is binding Turkey’s private-sector investment, especially female entrepreneurship. Only 24% of Turks are financially literate 14