To Equality: Gendered Outcomes, Economic Freedom & Gender Laws

Abstract

While prior literature has found that greater economic freedom improves economic growth, development, and productive entrepreneurship, the literature is mixed on economic freedom's impact on gender outcomes. We add to this literature by exploring several measures of gender outcome gaps in employment, financial inclusion, and education utilizing the women, business, and law index from the World Bank to proxy for the strength of legal institutions for women. Employing the Fraser Institute's economic freedom of the world index as our measure of economic institutions, our results show that greater economic freedom only results in improved (relative) gender outcomes when strong legal institutions are available to women. Thus, while improving economic freedom as a path to development and growth is important, the benefits for gender outcomes clearly depend upon the extent to which a country's underlying laws and legal institutions provide equal treatment to women and men. In areas where legal institutions are most discriminatory against women, higher economic freedom actually seems to have a negative impact on (relative) gender outcomes. We test the robustness of our results and examine the findings for (relative) gender equality in non-market areas such as political representation and health outcomes.