# **1. Introduction**

This paper reviews empirical findings from economic analyses of the role of gender equality and women’s empowerment in reducing poverty and stimulating economic growth. Gender equality is not equality of outcomes for men and women, but rather equality in the determinants of these outcomes—that is, equality in opportunities or resources, rights and voice (World Bank, 2001).<sup>1</sup> Education is an important component of opportunities and empowerment. A number of empirical studies find that increases in women’s education boost their wages and that returns to education for women are frequently larger than the returns to education for men. Empirical evidence also shows that increases in female education improve human development outcomes such as child survival, health and schooling; the impacts on these outcomes are larger for a given increase in women’s education than for an equal increase in men’s education (World Bank 2001, Schultz 2002, Strauss and Thomas 1995, King and Hill, 1993).

Education, however, is just one element of opportunities and empowerment. This paper goes beyond education and presents evidence on the impact of two other types of opportunities and empowerment — women’s access to markets (labor, land, and credit) and women’s decisionmaking power within households—on poverty reduction and productivity at the individual and household level. The paper also presents results from studies examining the relationship between gender equality and poverty reduction and growth at the macro level. While micro level effects of gender equality on individual productivity and human development outcomes have been well documented and have important ramifications for aggregate economic performance, establishing an empirical relationship between gender equality and poverty reduction and growth at the macro level has proven to be more challenging.

What is the policy implication of the evidence reviewed here? Gender equality is a legitimate policy goal in and of itself, as evidenced by the existence of third Millennium Development Goal on gender equality and the empowerment of women. The evidence presented in this paper, however, suggests gender equality is also desirable from an efficiency perspective: increases in opportunities for women lead to improvements in human development outcomes, poverty reduction, and—although evidence on this last point is relatively weak—potentially accelerated rates of economic growth.

The remainder of the paper is organized as follows **.** Section 2 develops a conceptual framework that specifies the potential links between increases in gender equality and current and future poverty reduction and growth, highlighting the key roles of increases in women’s labor force participation, productivity and earnings, as well as improvements in children’s well-being. Section 3 presents and analyzes the evidence linking increases in gender equality with children’s well-being. Sections 4, 5, 6 and 7 examine barriers to women’s participation in key markets--

> 1 Gender inequalities exist in almost all societies.  Relative to men, women tend to have less access to resources, rights and voice.  This disadvantage for women may exist even in cases where male outcomes are relatively poorer (e.g., school enrollment rates in much of Latin America and the Caribbean).  Women’s empowerment is closely linked with gender equality, because having the agency to choose among options is critically tied to having the options in the first place (World Development Report 2006).

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