Impact of Gender Empowerment on Gender-based Wage Inequality and Unemployment: A Theoretical Analysis

Abstract

The article develops a three-sector competitive general equilibrium model with an agricultural sector, a manufacturing sector and a non-traded service sector and three factors: male unskilled labour, female unskilled labour and skilled labour. The article shows how sociocultural barriers impact female labour force participation and male–female wage disparity in the presence of male unemployment in the labour market in a developing economy. The analysis finds a rise in gender wage inequality and a decrease in male unskilled labour unemployment when the female labour force rises due to a fall in sociocultural barriers. Finally, we show that the Gini coefficient of income inequality of unskilled labour and gender-based wage inequality move in opposite directions due to the rise in female labour participation in the workforce and the fall in the male unemployment rate. JEL: D50, J31, J61