Modelling the gender inequality in Pakistan: A macroeconomic perspective

Abstract

The paper takes up the case of gender build inequality and its potential repercussions on economic growth of Pakistan. Using cointegration and causality analysis, we explore the relationship between gender inequality and its macroeconomic determinants i.e. economic growth, financial development, trade openness and foreign direct investment. For the this purpose, we have applied the Bayer-Hanck combined cointegration approach to test the long-run relationship and Granger causality for causal links amid the variables on the most recent and extended time period data (1972-2013). The cointegration test results validate the long-run association among the underlying variables. We found economic growth and financial development ignite gender driven disparity. Whereas, trade openness and foreign direct investment found to reduce gender gap. The positive bidirectional causal link between economic growth and gender inequality portrays unhealthy socio-economic environment to reduce gender inequality in the country. The feedback effect exists between financial development and gender inequality