Pakistan Institute of International Affairs

Gender Inequality in Education and Economic Growth: Case Study of Pakistan

Author(s): Imran Sharif Chaudhry
Source: Pakistan Horizon, Vol. 60, No. 4, Women's Concerns in International Relations
(October 2007), pp. 81-91
Published by: Pakistan Institute of International Affairs
Stable URL: http://www.jstor.org/stable/41500094 .
Accessed: 24/09/2013 09:47

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.

Pakistan Institute of International Affairs is collaborating with JSTOR to digitize, preserve and extend access
to Pakistan Horizon.

http://www.jstor.org

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
Gender Inequality in Education and Economic Growth:
Case Study of Pakistan

Imran Sharif Chaudhry

The status of women and their role are important determinants of

progress, not only because women constitute almost half of the human
resources, but also because they have to bear the brunt of the daily
struggle forsurvival, particularly in the developing countries. The role of
women in development is closely related to the goal of comprehensive
socio-economicprogress, and is a strategic question for the development
of all societies. Any development strategy which neglects the need for
enhancing the role of women cannot acquire comprehensive socio-
economic development. Moreover, the role of women in development has
been conceived as an integral process of economic growth and social
progress in the contemporaryworld.
The status of women in Pakistan is sharply differentfrom that in
Western countries. Women have oftenbeen considered as the weaker and
vulnerable section of Pakistani society in terms of education, health,
employmentand business opportunities,livelihood conditions,legislation,
decision making, media and communication. However, in the past few
decades much attention has been drawn towards women's problems all
over the world. The equality of status of women with men has become an
importantand burning issue at the political and social levels. One may be
concerned about gender equity as a developmentgoal in its own right- as
recognized by the Convention on the Elimination of all Forms of
Discrimination against Women, which has been signed and ratified by
165 countries.1 According to UNDP's Human Development Report, the
Gender Equality Measure (GEM) for South Asia shows the lowest value
(0.235) among all the regions of the world. Furthermore,as per Gender
Development Index (GDI), Pakistan has been rated among the poorest
(0.179) South Asian countries where the average index is 0.226. 2

ImranSharifChaudhry is AssociateProfessorof Economicsat BahauddinZakariya

Multan,currently
University, working as a post-doctoral
researchfellowat theLondon
SchoolofEconomics Science.
andPolitical

1 UnitedNationsDevelopmentProgramme(UNDP), Human Development

Report
(NewYork:OxfordUniversityPress,2000).
2 MahbubulHaq Human DevelopmentCentre(MHDC), Human Developmentin
SouthAsia (Islamabad:MHDC, 1999).

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
82 PAKISTAN
HORIZON

Education plays an important role in human capital formationand it

has become one of the defining enterprises of the 21stcentury with the
emergence of globalization and increasing global competition. It raises
the productivityand efficiencyof individuals and thus produces skilled
manpower that is capable of leading the economy towards the path of
sustainable economic development. The conventional theory of human
capital developed by Becker (1962) and Mincer (1974)3 views education
and training as the major sources of human capital accumulation that, in
turn, have a direct and positive effect on the individual's lifetime
earnings. In the Mincerian earning function, the coefficientof school
years indicates the returns to education: how much addition in earnings
takes place with an additional school year. There exists a wide range of
literature that estimates the rates of returns to education for different
countries.4

Many developing countries exhibit considerable gender inequality in

education, employment and health outcomes. For example, girls and
women in South Asia and China sufferfromelevated mortalityrates that
have been referredto as the missing women by Amartya Sen and others.5
Employment opportunities and remunerations also differ greatly by
gender in most developing regions. Finally, there are large gender
discrepancies in education, particularlyin South Asia.

Gender inequality may have an adverse impact on a number of

valuable development goals. First, gender inequality in education and
access to resources may prevent a reduction in child mortality,fertility,
and an expansion of education for the next generation. Various studies
have proved these linkages. Secondly, it may be the case that gender
inequality reduces economic growth. This is an issue important to the
extent that economic growth improves well-being (as measured by such

3 GaryS. Becker,'Investmentin humancapital:A theoreticalanalysis',Journal

ofPoliticalEconomy(Chicago),vol. 70, 1962 (Supplement);and JacobMincer,
'Schooling,experienceand earnings',National Bureau of EconomicResearch,
NewYork, 1974.
4 G. Paacharopoulos and Ying Chu Ng., 'Earnings and education in Latin
America,,World Bank WorkingPaper, series no. 1056, 1992, World Bank,
Washington D. C.
5 AmartyaSen, Women's survivalas a developmentproblem',Bulletinof the
AmericanAcademyofArtsand Sciences(Cambridge),vol. 43, no. 2, 1989, pp.
14-29; Stephen Klasen, 'Missing women re-considered', WorldDevelopment
(Montreal),vol. 122, 1994,pp. 1061-1071;and StephenKlasen, 'Low schooling
forgirls,slowergrowthforall?',WorldBank EconomicReview(Oxford),vol. 16,
2002,pp. 345-373.

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
GENDERINEQUALITYIN PAKISTAN 83

indicators as longevity, literacy and poverty), though not all types of

growthdo so to the same extent.6

The major objective of this study is to analyze the impact of gender

inequality in education on economic growth in Pakistan. It assesses the
impact of gender inequality in education on economic growth during the
period 1970-2005, using econometric analysis. It is suggested by many
writers that gender inequality in education directly and significantly
affectseconomic growthby lowering the average level of human capital.
Any development strategywhich neglects the need forenhancing the role
of educated women, cannot lead to comprehensive socio-economic
development.

Gender inequality in education in Pakistan

Pakistan is not free fromgender disparity in education because of social,

cultural, demographic and economic problems in the country. Society in
Pakistan is patriarchal where women generally sufferdiscrimination in
everyfield of life. There are several ways to measure gender inequality in
education. Gross and net enrolmentrates oftenreveal gender differences,
especially when reported by income quartiles. Similarly, completion and
dropout rates are another way to identifygender disparities in education.
Accordingto the current figures of Pakistan Economic Survey, males are
better than their female counterpartsin terms of literacy and enrolment
rates at the primaryand secondary levels. Pakistan has made insufficient
progressto narrow down the gender gap in education.

According to the education census 2005, there are currently2,27,791

educational institutions in the countryout of which 25 per cent are for

6 Dollar D. and A. Kraay,Growthis GoodforthePoor (WashingtonD.C.: World

Bank, 2000); Dreze Jean and AmartyaSen, Hungerand Public Action (New
York:OxfordUniversityPress, 1989); L. Pritchettand L. Summers,'Wealthier
is healthier',JournalofHuman Resources(Madison),vol. 31, no. 4, 1996, pp.
841-68; M. Ravallion, 'Growth,inequality and poverty:Looking beyond
averages', WorldDevelopment , vol. 29, no. 11, 2001, pp. 1803-16; UNDP,
Women's Indicatorsand Statistics(WISTAT)', version3.0, New York, 1996;
and WorldBank, WorldDevelopment Report2000/01: AttackingPoverty(New
York:OxfordUniversity Press,2000).

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
84 HORIZON
PAKISTAN

boys and 21 per cent forgirls and 53 per cent fall in the category of the
co-education system. Data show that the overall participation is highest
in Punjab followedby Sindh and NWFP, while it is lowest in Balochistan.
Remote areas like the Northern Areas and AJK have almost attained
equal participation in enrolment,while the lowest participation by girls
in overall enrolment is in the FATA region. The above data show that
the development level and education attainment has a very strong
linkage. Gender disparity in education is strongly associated with
economicgrowthbecause of educated female labour forceparticipation.

There are 7.6 million girls enrolled in the rural areas as compared to
11.5 million boys. However, the gap in enrolment has been narrowed
down in the case of urban areas as 6.7 million girls are enrolled as
compared to 7.5 million boys. Out of the total of 6,69,189 teachers
working in urban areas, 62 per cent are females while 38 per cent are
males. Whereas in the rural areas (68 per cent of the total population),
out of 6,87,613 teachers, only 40 per cent are females as compared to 60
per cent males. There are several constraints on women's participation
in the rural areas. This, consequently, is affecting the economic
development of the country. So, investing in girls' education is the most
effectiveway to pursue a broad range of critical development objectives.
Educated women have fewerchildren,provide better nutritionand health
fortheir families, experience significantlylower child mortality,generate
more income and are far more likely to educate their children than
women with little or no schooling, as such creating a virtuous cycle for
the communityand the country.

Gender inequality and economic growth

There are a large number of studies on gender inequality, its causes,

effectsand consequences. Many economists have shown their interest in
the theoretical and empirical determinants of economic growth. On the
theoretical front,Roemer (1986), Lucas (1988), and Barro and Sala-i-
Martin (1995) have emphasized the possibility of endogenous growth
where economic growth is not constrained by diminishing returns to
capital.7 These models stand in contrast to Solow (1956) which is based
on a neo-classical production function and exogenous savings and

7 P. Roemer,Increasing returnsand long-rungrowth',Journal of Political

Economy y vol. 94, 1986, pp. 1002-1037; R. Lucas, 'On the mechanics of
developmentplanning/ Journalof MonetaryEconomicsy vol. 22, no. 1, 1988,
EconomicGrowth(New York:
pp. 3-42;and R. Barro,and XavierSala-i-Martin,
McGraw-Hill, 1995).

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
GENDERINEQUALITYIN PAKISTAN 85

population growth-suggestedconvergence of per capita income.8 Many

growth models also emphasize the importance of human capital
accumulation. Human capital can be included in the traditional Solow
model and still yield conditional convergence. It can also be incorporated
into endogenous growthmodels. 9

Various studies on the subject explicitly establish a link between

gender inequality in education and its impact on economic growth. A
number of theoretical contributionshave found a negative link between
gender inequality and economic growth. This literature suggests that,
due to the impact of female education on fertilityand the creation of
human capital of the next generation, a lower gender gap will spur
economic development. In parallel, empirical studies have also examined
these effects. While some earlier studies had suggested that gender
inequality in education might actually increase economic growth,10more
recent work has shown that the opposite appears to be the case.11 These
studies not only differedfromprevious analyses in their findingson the
impact of gender inequality in economic growth,but also were able to
explain why earlier studies had found the opposite effectand why more
careful econometric techniques yielded the new finding that gender
inequality in education reduces economicgrowth.12

These macro studies are consistent with findings using micro data
that show that girls have a higher marginal return to education, and
even more so, if the impact of female education on fertilityand education
of the next generation is included (World Bank, 2001). Nevertheless, in
the past, a growing concern was evident to study various aspects of
women's life and a number of researchers have offeredsignificant and

8 R. Solow,'A contribution to the theoryofeconomicgrowth,'QuarterlyJournal

ofEconomics(Cambridge),vol.70, no. 1, 1956,pp. 65-94.
9 The mainargumentsare discussedin detailin Klasen (1999,2002),op. cit.
10Barro,(1991),Barroand Sala-i-Martin(1995) and Barroand Lee (1994), op. cit.
11S. Knowles,P. K. Lorgellyand P. D. Owen, 'Are educationalgendergaps a
brake on economicdevelopment? Some cross-country empiricalevidence,'
OxfordEconomicPapers 54(1), pp. 118-49;K. J. Forbes,'A reassessmentofthe
relationshipbetween inequalityand growth/ AmericanEconomic Review
(Pittsburgh),vol. 90, no. 4, 2000, pp. 869-87; A. Hill and E. King, Women's
Education in DevelopmentCountries (Baltimore, Md.: Johns Hopkins
UniversityPress, 1995); and R. Gatti,A Cross-Country Analysis of Fertility
Determinants, (WashingtonD.C.: The WorldBank, 1999).
12P. K. Lorgellyand P. D. Owen, 'The effectof femaleand male schoolingon
economicgrowthin the Barro-LeeModel/EmpiricalEconomics , vol. 24, no. 3,
1999,pp. 537-57,http://link.springer.de

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
86 PAKISTAN
HORIZON

valuable knowledge about the role of Pakistani women at the national as

well as international levels.

There are many studies on gender and education in Pakistan but

there are fewer empirical studies on the impact of gender gaps in
education on economic growth. The following are the major studies:
Hamdani (1997), Haque (1977), Guisinger et al. (1984), Khan and Irfan
(1985), Chaudhry and Khan (1987), Chishti and Lodhi (1988), Kazi and
Raza (1989, 1991, 1992), Bilquees and Hamid (1989), Hamid (1991),
Mukhtar and Mukhtar (1991), Mohiuddin (1991), Ahmad et al. (1991),
Shabir and Khan (1991), Mukhtar and Hassan (1992), Ashraf and Ashraf
(1993a, 1993b and 1996), Shabir (1994), Sultana et al. (1994), ДЫегтап
et al. (1996a and 1996b), Mahmood and Nayab (1998), Hakim and Aziz
(1998), Nasir and Mahmood (1998), Siddiqui and Siddiqui (1998) and
Ahmad (1998).

Data and methodology

A serious measurement problem arises when measuring the impact on

economic growth of gender inequality in education. Some estimates
suggest that two-thirdsof female economic activities go unrecorded in
developing economies compared with just one-quarter of male activities.
Similarly, increases in the quantity and productivityof these activities
are often recorded insufficientlyor not at all.13 Thus, any exercise that
will try to link gender inequality with economic growth will sufferfrom
this shortcoming.Consequently, any findingabout the impact of gender
inequality on economic growth may understate this relationship,
particularlyif female education and female activities are not included in
systems ofnational accounts.

Keeping in view these weaknesses, the secondary source of time series

data is used to assess the impact of gender inequality on economic
growth. The data on differentvariables between the time period 1970-
2005 is drawn from differentissues of Pakistan Economic Survey,
Government of Pakistan, Finance Division, Islamabad and Pakistan
Statistical Year Book , Government of Pakistan, Federal Bureau of
Statistics. The descriptionofthe variables is given in Table 1.

13M. Waring,If WomenCounted(NewYork:Harperand Row,1988).

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
GENDERINEQUALITYIN PAKISTAN 87

Table 1

List of Selected Variables forEmpirical Analysis

Variables DescriptionofVariables
GRTH Growth rate(Percentageofgrossdomesticproduct)
LITR rate
Overallliteracy
RLFM females
Ratioofliterate tomalesof10yearsageandabove
RERP Ratioofenrolmentratesoffemales level
tomalesat primary
PEED Publicexpenditure on education (percentage grossdomestic
of
product)
GLBF Growth rateoflabourforce(15-64)
RFMP Ratiooffemale-male rates
participation
TINV Totalinvestment as percentageofgrossdomesticproduct
POPG Populationgrowthrate

Keeping in view these variables, we plan the methodologyof the findings.

We estimate a set of equations to capture the direct effectof gender
inequality in education on economic growth.Following Klasen (2002), we
will estimate a set of regressions. Thus, in the basic specification,the
followingequations are estimated:
GRTH = ß0 + pi LITR + ß2 RLFM + ß3 RERP + ß4 PEED + ß5
GLBF + ß6 RFMP + ß7 TINV + ß8 POPG + e (1)

GRTH = ßO + ß9 LITR + ßlO RLFM + ßll RERP + ßl2 PEED +

ßl3 RFMP + 8 (2)

GRTH = ßO+ ßl4 LITR + ßl5 PEED + ßl6 GLBF + ßl7 RFMP +
ßl8 TINV + ßl9 POPG + 8 (3)

It is importantto brieflydiscuss the way we model human capital and

gender bias in human capital. Instead of including a male and female
human capital achievement variable, we choose a differentroute to avoid
the multi-colinearityproblem. We include a variable that measures the
overall state of human capital and then include a second one that just
measures the female-male ratio ofhuman capital.

Empirical results
In this section, we present the results of multivariate regression
equations based on the time series data. The results of regression are
shown in Table 2. All regressions have a moderate explanatory power and
performwell on specificationtests. A more interestingfindingis that the
overall literacy rate (LITR) ratio of literate females to males of age ten
years and above (RLFM) and the ratio of enrolment rates of females to
males at the primarylevel (RERP) have a significantpositive impact on

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
88 PAKISTAN
HORIZON

economic growth.There is no auto-correlationin all three equations. Our

results are also consistentwith the findingsof Klasen (2002).

Table 2
OLS Regression Results of Gender Inequality
in Education and Economic Growth in Pakistan
Dependent Variable: Economic Growth
Explanatory Equation(1) Equation Equation
Variable (2) (3)
Constant 6.38 9.84 7.82
(SA) (4J) (4.7)
LITR 2.35* 2.89** 2.57**
09) (2.30) (2.20)
RLFM 0.89*** 1.24
(3.81) (4.12)
RERP 0.73** 0.87**
(2Л) (2Л)
PEED 0.19* 0.26* 0.21*
(1.85) (1.98) (1.90)
GLBF 0.23* 0.31*
(1.87) (1.95)
RFMP 0.98*** 0.99*** 0.96***
(3.80) (4.01) (3.92)
TINV 1.42*** 1.69***
(3.72) (4.15)
POPG -0.55 -0.62
(0.40) (0.73)
R2 0/74 (Ш> 0.82
Adjusted R2 0.71 082 0.78
F teststatistic 6.98*** 10.13*** 8.39***
DurbanWatson 1.97 2.01 1.98
statistic
N 1 35 1 35 35
bytheauthor
Source:Estimation usingMinitab Statistical
Software.
* denotes at 90percent
significance level
**denotes level
at 95 percent
significance
***denotes level
at 99 percent
significance
inparenthesis
Figures areratios.

Accordingto the results of regression equation 1, the literacy rate, public

expenditureon education as a percentage of GDP and labour forcegrowth
rate have a positive and significantimpact on economic growthat 90 per
cent level of confidence,while the ratio of literate females to males, ratio
of female to male participation rates, and total investment as a
percentage of GDP have a positive impact on economic growth at 99 per
cent level of significance.Moreover,improved results have been found in
equations 2 and 3 when some of them are excluded fromthe equations in
orderto reduce multi-colinearity.

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
GENDERINEQUALITYIN PAKISTAN 89

Regression 1 shows that three differentproxy variables for gender

inequality: overall literacy rate, the ratio of literate females to males of
10 years and above, and the ratio of enrolmentrates of females to males
at the primary level, have a constructiveeffecton economic growth. As
the ratio of female to male enrolment rates rises, gender inequality in
education will fall and consequently, more educated women will have a
significantand better impact on socio-economicconditionsin Pakistan. It
will also generate more personal, familyand national income. As majority
of the population in Pakistan lives in the rural areas, gender equality in
education will also contribute to agricultural productivityand growth.
Nevertheless, this indicates that the returns from educating girls are
greater than the returns from educating boys. Government should
concentrate particularly on girls' education in the rural areas as the
agriculturesector contributesroughlyone quarter ofPakistan's GDP.

Another variable, public expenditure on education, has a positive

impact on economic growthin Pakistan. Unfortunately,public spending
on education has remained roughlyone per cent of GDP forthe last many
years. There is a dire need to accelerate spending on education. This rise
in public spending on education, particularly girls' education, will, in
turn, increase employment opportunities,improve the family structure,
and familyhealth and will reduce inequality in all walks of the life.

According to empirical results, the ratio of female-male participation

also has a positive and significantimpact on economic growth. Pakistan
has a very low level of female workforce participation, and female
employmentincreases a nation's output and is an important contributor
to household income. Moreover, some recent studies indicate that
women's and men's relative control of resources has significant and
differentimpacts on household consumption patterns. When women
controlresources, more of these are devoted to familywelfare, especially
nutrition,education and health, than when men controlthe resources. At
the margins, female control of resources results in a greater positive
impact on child survival and school enrolments than male control of
resources. In other words, women tend to invest more in the human
capital of their children than do men. Consequently, this process
consequently will have a significant positive impact on economic
developmentin the long term in Pakistan.

Similarly, another variable, total investment as a percentage of GDP

has a positive and significant impact on economic growth in Pakistan.
Any type of investment plays an important role in accelerating
employment opportunities, well-being of the people and, consequently,
economic growthin the country.In terms of regression equations 1 and 2,

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
90 HORIZON
PAKISTAN

the results are more or less similar to equation 1 but are now in an
improved formas the coefficientof determinationrises from74 per cent
to 82 per cent.

Conclusions and policy implications

A high priorityhas been accorded to achieving economic development in

Pakistan. Most of the development programmes and projects stress upon
an increase in national production.They squarely deal with fundamental
issues of human equality, social justice, and human resource
development. The development of human potential by creating a better
quality of human being has not been substantially emphasized. Gender
developmenthas remained all the more neglected. Women have not been
given an equal status in terms of education, health and employment.
They are subjected to ill-treatment,socio-economicinjustice, exploitation
and physical and mental torture. Nevertheless, gender equality in
education is largely recognized as a major factor in economic develop-
ment.

Many studies recognize the relationship between gender inequality

and economic development. However, this type of analysis has not been
undertaken previously in Pakistan. Keeping in view the importance of
development,an attempt has been made to analyze the impact of gender
inequality in education on economicgrowthin Pakistan, using time series
secondary data and regression analysis.

This study has found that gender inequality in initial education levels
and in the expansion of education significantlyreduces economic growth.
Since this paper has examined the extent to which gender inequality in
education reduces economic growth, several findings are important,
including the correlation among literacy rate, ratio of literate females to
males, ratio of enrolmentrates of females to males at the primarylevel,
public expenditure on education as a percentage of GDP, growth rate of
labour force,ratio of female-male participation and total investment as a
percentage of GDP. Finally, it is concluded that gender inequality in
education has a strong and significant impact on economic growth in
Pakistan. Education is the significant determinant of human resource
development and a necessary ingredient for sustainable socio-economic
growth when, particularly, it is concerned with the issue of gender
equality. From an empirical analysis of gender inequality in education
and economic growth, the following observations, which would be of
concernto policymakers forsustainable development,can be drawn:

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions
GENDERINEQUALITYIN PAKISTAN 91

• Female education should be increased with the help of the

private sector in Pakistan.
• Public expenditure on education should be raised to a
significantlevel.
• Education/trainingaimed at improvingemployabilityseems to
have a positive impact on labour force participation and,
consequently, it will become the source of increase in gross
domestic product.
• Effortsto promote self-employmentamong women should be
made at the regional level.
• Population policy should be redesigned in order to control the
population growthrate in Pakistan.
• Sustainable strategies should be adopted for improving the
economic status of educated women in Pakistan.

At the end, it is concluded that women will have to be provided with

better educational opportunities,better health care and better nutrition
in order to improve their economic capacity and participation.
Consequently, the economic growth rate will rise and it will alleviate
povertyat all levels in the country.

Thisstudyis basedon a paperpresented

at theinternational on 'TheRoleof
conference
Women inNationBuilding'at Bahauddin
Zakariya Multan,
University, on 10-12
Pakistan,
November2005.

This content downloaded from 136.159.235.223 on Tue, 24 Sep 2013 09:47:29 AM

All use subject to JSTOR Terms and Conditions