Skip to main content

Advertisement

SpringerLink
Log in

Impact of Gender Discrimination Laws on Inflation: Evidence from Panel Data

  • Published:
International Advances in Economic Research Aims and scope Submit manuscript

Abstract

In recent years, there has been a burgeoning literature exploring the effects of gender discrimination on macroeconomic outcomes ranging from productivity and gross domestic product per capita to economic growth. A separate literature in recent decades on the time-inconsistency of monetary policymaking has examined the role of labor market distortions in explaining differences in cross-country inflation rates. This paper brings these two disparate streams of research together and explores the impact of gender discrimination laws on inflation. Using the World Bank’s index of gender discrimination laws from the Women, Business and Law database, the results from the system generalized method of moments estimator applied to 117 countries over the period 1970–2019 indicate that gender discrimination laws have a positive causal impact on inflation. This effect is robust to different specifications and estimation methodologies. From a policy perspective, the findings suggest that labor market reforms aimed at reducing gender discrimination laws can be an effective mechanism in promoting low inflation.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. A closely related study is Neyer and Stempel (2021) which analyzed theoretically the effects of taste-based and statistical gender discrimination against women in the labor market on the business cycle and inflation dynamics.

  2. See World Bank (2021a) for a detailed description of the eight sub-indicators of the WBL index.

References

  • Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error components models. Journal of Econometrics, 68(1), 29–51.

    Article  Google Scholar 

  • Barro, R., & Gordon, D. (1983). A positive theory of monetary policy in a natural mate model. Journal of Political Economy, 91(4), 589–610.

    Article  Google Scholar 

  • Beck, N. L., Katz, J. N., & Mignozzetti, U. G. (2014). Of Nickell bias and its cures: Comment on Gaibulloev, Sandler, and Sul. Political Analysis, 22(2), 274–278.

    Article  Google Scholar 

  • Bleaney, M. (1999). The disappearing openness-inflation relationship: A cross-country analysis of inflation rates. IMF/WP/99/161, https://www.imf.org/external/pubs/ft/wp/1999/wp99161.pdf. Accessed 10 Jan 2022.

  • Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143.

    Article  Google Scholar 

  • Campillo, M., & Miron, J. (1997). Why does inflation differ across countries? In C. D. Romer & D. H. Romer (Eds.), Reducing inflation: Motivation and strategy (pp. 335–357). University of Chicago Press.

    Google Scholar 

  • Cavalcanti, T., & Tavares, J. (2016). The output cost of gender discrimination: A model-based macroeconomic estimate. Economic Journal, 126(590), 109–134.

    Article  Google Scholar 

  • Cavelaars, P. (2003). Does competition enhancement have permanent inflation effects? Kyklos, 56(1), 69–94.

    Article  Google Scholar 

  • Correa-Lopez, M., Garcia-Serrador, A., & Mingorance-Arnaiz, C. (2014). Product market competition, monetary policy regimes and inflation dynamics: Evidence from a panel of OECD countries. Oxford Bulletin of Economics and Statistics, 76(4), 484–509.

    Article  Google Scholar 

  • Coricelli, F., Cukierman, A., & Dalmazzo, A. (2006). Monetary institutions, monopolistic competition, unionized labor markets and economic performance. Scandinavian Journal of Economics, 108(1), 39–63.

    Article  Google Scholar 

  • Cuberes, D., & Teignier, M. (2016). Aggregate effects of gender gaps in the labor market: A quantitative estimate. Journal of Human Capital, 10(1), 1–32.

    Article  Google Scholar 

  • Cukierman, A., Webb, S., & Neyapti, B. (1992). Measuring the independence of central banks and its effect on policy outcomes. The World Bank Economic Review, 6(3), 353–398.

    Article  Google Scholar 

  • Cukierman, A., & Lippi, F. (1999). Central bank independence, centralization of wage bargaining, inflation and unemployment: Theory and some evidence. European Economic Review, 43(7), 1395–1434.

    Article  Google Scholar 

  • European Central Bank. (2022). Economic Bulletin - Update on Economic, Financial and Monetary Developments Summary, Issue 1/2022, https://www.ecb.europa.eu/pub/pdf/ecbu/eb202201.en.pdf, Accessed 3 June 2022.

  • Elbahnasawy, N., & Ellis, M. (2022). Inflation and the structure of economic and political systems. Structural Change and Economic Dynamics, 60(March), 59–74.

    Article  Google Scholar 

  • Feenstra, R. C., Inklaar, R., & Timmer, M. P. (2015). The next generation of the Penn world table. American Economic Review, 105(10), 3150–3182, https://www.rug.nl/ggdc/productivity/pwt/?lang=en. Accessed 20 Oct 2021.

  • Friedman, M. (1956). The quantity theory of money - A restatement. In M. Friedman (Ed.), Studies in the quantity theory of money (pp. 1–21). University of Chicago Press.

    Google Scholar 

  • Garriga, A.C. (2016). Central bank independence in the world: A new data set. International Interactions, 42(5), 849–868, https://sites.google.com/site/carogarriga/cbi-data-1. Accessed 20 June 2021.

  • Garriga, A. C., & Rodriguez, C. M. (2020). More effective than we thought: Central bank independence and inflation in developing countries. Economic Modelling, 85(February), 87–105.

    Article  Google Scholar 

  • Giavazzi, F., & Pagano, M. (1988). The advantage of tying one’s hands: EMS discipline and central bank credibility. European Economic Review, 32(5), 1055–1075.

    Article  Google Scholar 

  • Hsieh, C.-T., Hurst, E., Jones, C. I., & Klenow, P. J. (2019). The allocation of talent and US economic growth. Econometrica, 87(5), 1439–1474.

    Article  Google Scholar 

  • Hyland, M., Djankov, S., & Goldberg, P. K. (2020.) Gendered laws and women in the workforce. AER: Insights, 2(4), 475–490.

  • Ilzetzki, E., Reinhart, C., & Rogoff, K. (2019). Exchange arrangements entering the 21st century: Which anchor will hold? Quarterly Journal of Economics, 134(2), 599–646, https://www.ilzetzki.com/irr-data. Accessed 13 March 2022.

  • Jaumotte, F., & Morsy, H. (2012). Determinants of Inflation in the Euro Area: the Role of Labor and Product Market Institutions, IMF Working Paper 12/37, https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Determinants-of-Inflation-in-the-Euro-Area-The-Role-of-Labor-and-Product-Market-Institutions-25690. Accessed 20 July 2022.

  • Kolovich, L., Malta, V., Newiak, M., & Robinson, D. (2020). Gender equality and macroeconomic outcomes: Evidence and policy implications. Oxford Review of Economic Policy, 36(4), 743–759.

    Article  Google Scholar 

  • Kydland, F., & Prescott, E. (1977). Rules rather than discretion: The inconsistency of optimal plans. Journal of Political Economy, 85(3), 473–492.

    Article  Google Scholar 

  • Marshall, M. G., & Gurr, T. R. (2020). Polity V project, political regime characteristics and transitions, 1800–2018, http://www.systemicpeace.org/inscrdata.html. Accessed 7 Feb 2021.

  • Mankiw, G. (1987). The optimal collection of seigniorage. Journal of Monetary Economics, 20(2), 327–341.

    Article  Google Scholar 

  • Neiss, K. (2001). The markup and inflation: Evidence in OECD countries. Canadian Journal of Economics, 34(2), 570–587.

    Article  Google Scholar 

  • Neyer, U., & Stempel, D. (2021). Gender discrimination, inflation, and the business cycle. Journal of Macroeconomics, 70(December), 103352.

    Article  Google Scholar 

  • Nickell, S. (1981). Biases in dynamic models with fixed effects. Econometrica, 49(6), 1417–1426.

    Article  Google Scholar 

  • Nurbayev, D. (2018). The rule of law, central bank independence and price stability. Journal of Institutional Economics, 14(4), 659–687.

    Article  Google Scholar 

  • Rogoff, K. (1985). The optimal degree of commitment to an intermediate monetary target. The Quarterly Journal of Economics, 100(4), 1169–1189.

    Article  Google Scholar 

  • Romer, D. (1993). Openness and inflation: Theory and evidence. The Quarterly Journal of Economics, 108(4), 869–903.

    Article  Google Scholar 

  • Windmeijer, F. (2005). A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics, 126(1), 25–51.

    Article  Google Scholar 

  • World Bank. (2021a). Women, Business and the Law 2021a. Washington, DC: International Bank for Reconstruction and Development and the World Bank. Retrieved September 13, 2021, https://wbl.worldbank.org/en/past-reports. Accessed 25 Nov 2021.

  • World Bank (2021b). World Development Indicators, https://databank.worldbank.org/source/world-development-indicators. Accessed 29 Nov 2021.

Download references

Author information

Authors and Affiliations

  1. Department of Economics and Finance, College of Economics and Political Science, Sultan Qaboos University, Al Khodh, PC 123, P.O. Box. 20, Muscat, Sultanate of Oman

    Fahim Al Marhubi

Authors
  1. Fahim Al Marhubi
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Fahim Al Marhubi.

Ethics declarations

Declarations

All data and econometric coding is available from the author upon request.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary Information

Below is the link to the electronic supplementary material.

Supplementary file1 (DOCX 14 KB)

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Al Marhubi, F. Impact of Gender Discrimination Laws on Inflation: Evidence from Panel Data. Int Adv Econ Res 29, 99–109 (2023). https://doi.org/10.1007/s11294-023-09877-8

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11294-023-09877-8

Keywords

JEL Classifications

Search

Navigation