Last week’s Lunch with the FT column featured an interview with Esther Duflo, MIT economist and co-author of Poor Economics. Duflo and her co-author Abhijit Banerjee run MIT’s Poverty Action Lab, where they use randomized control experiments – a model borrowed from drug testing – to evaluate the effectiveness of development projects. The book is a combination of lessons from these experiments about what approaches work, and an attempt to understand and explain why the poor sometimes make choices that seem ‘irrational’ to outside observers. It’s a great read, and I highly recommend it.
But I’m troubled by Duflo’s response to a question from the FT’s John Gapper about the role that women’s empowerment plays in eradicating poverty.
“Giving more to women will to some extent come at the expense of men. People sometimes try to sweep that under the rug by saying you will create so much additional resources that everyone will be better off.” She smiles wryly but firmly. “I don’t think that’s true.”
Duflo’s greatest contribution to development economics has been her emphasis on local data and her wariness of sweeping generalizations, so it is a surprise to find her making a generalization – without data – about the cost to men of women’s empowerment. It’s doubly surprising given that there is a wealth of research showing just the opposite:
1. A 2007 Goldman Sachs report concluded that closing the gap between male and female employment would add 9% to US GDP, 13% to European GDPs and 16% to Japan’s GDP. Moreover, policies to facilitate female employment – like child care and parental leave rules that make it easier to work and have children – boost low fertility rates in the developed world. That means more women in the work force would actually alleviate one of the heaviest burdens on developed economies: an aging population’s expensive entitlements.
2. The World Bank reports that if women in the Middle East and North Africa were fully integrated into the workforce, average household earnings in the region would increase by 25%.
3. The Economist reports that rising numbers of women in the workforce in the developed world over the past decade have added more to global growth than China has. In the U.S., the State Department says the productivity gains attributable to the increase in female employment account for 25% of current U.S. GDP.
In other words, female economic empowerment does create additional resources, lots of them, that make everyone better off. It is sweeping data under the rug to say otherwise.