Does Female Empowerment Promote Economic Development?

85 Pages Posted: 11 Feb 2014 Last revised: 6 May 2023

See all articles by Matthias Doepke

Matthias Doepke

Northwestern University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Michèle Tertilt

University of Mannheim - Department of Economics

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Date Written: February 2014

Abstract

Empirical evidence suggests that money in the hands of mothers (as opposed to fathers) increases expenditures on children. Does this imply that targeting transfers to women promotes economic development? Not necessarily. We consider a noncooperative model of the household where a gender wage gap leads to endogenous household specialization. As a result, women indeed spend more on children and invest more in human capital. Yet, depending on the nature of the production function, targeting transfers to womenmay be beneficial or harmful to growth. Transfers to women are more likely to be beneficial when human capital, rather than physical capital or land, is the most important factor of production. We provide empirical evidence supportive of our mechanism: In Mexican PROGRESA data, transfers to women lead to an increase in spending on children, but a decline in the savings rate.

Suggested Citation

Doepke, Matthias and Tertilt, Michèle, Does Female Empowerment Promote Economic Development? (February 2014). NBER Working Paper No. w19888, Available at SSRN: https://ssrn.com/abstract=2393600

Matthias Doepke (Contact Author)

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Michèle Tertilt

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

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