Gender inequality in labour markets: Why growth and education are not enough

Editor's note: This episode of VoxDevTalks is available on Spotify and Apple Podcasts.

In this episode of VoxDevTalks, Barbara Petrongolo and Ashwini Deshpande explore one of the most persistent challenges in development economics: gender inequality in labour markets. Despite decades of economic growth, educational expansion and legal reform, women across the world continue to earn less, work under more constrained conditions, and carry a disproportionate burden of unpaid care work.

The discussion ranges across high-, middle- and low-income countries, examining legal reforms, social norms, unpaid care work, measurement challenges, and the political economy of gender-focused policies.

Has any country solved gender inequality at work?

A central question posed early in the episode is whether any country has successfully eliminated gender inequality in labour market outcomes. Petrongolo’s answer is unequivocal.

“I’m afraid the short answer is that the problem remains in virtually all countries around the world.” Petrongolo

Even in high-income economies, the gaps remain substantial. Petrongolo points out that in wealthy countries, “the gender gap in total earnings goes from about 25% in Finland, all the way up to 75% in Japan”. Nordic countries, frequently cited as models, have not fully closed these gaps either.

In low-income countries, the shape of inequality is different but often more severe. It extends beyond wages and hours into unequal access to education, health, legal rights, and, in extreme cases, exposure to gender-based violence. As Petrongolo emphasises, gender inequality in labour markets cannot be understood in isolation from these broader structural disadvantages.

Why growth and education are not enough

A long-standing assumption in development policy is that economic growth and rising education levels will naturally lead to greater gender equality. While both speakers acknowledge the importance of these factors, they stress that they are not sufficient on their own.

“Equal rights have not closed gaps in labour market opportunities and outcomes. There is a wide disparity in the wages and economic power of men and women in nearly all countries, including countries at the very top of the income per head distribution. Therefore, education and growth are important to arrive to gender equality, but they’re not sufficient.” Petrongolo

Deshpande reinforces this point with examples from both high- and middle-income countries. Gender equality, she argues, is not a single outcome but “a composite concept consisting of many different elements”, including economic, legal, political, and personal rights.

India provides a striking illustration. Despite dramatic improvements in women’s education and sustained economic growth, female labour force participation has stagnated or declined.

“Higher education of women is not translating into greater labour force participation rates.” Deshpande

The efficiency case for gender equality

Beyond arguments rooted in justice and rights, the episode explores whether gender equality can be defended on efficiency grounds – a framing often favoured by policymakers.

Deshpande argues that the case is strong, particularly in low- and middle-income countries.

“Greater participation of women in paid economic activity will definitely increase the country’s GDP.” Deshpande

Excluding women from economic roles also wastes talent, reducing productivity and allocative efficiency.

However, she cautions that efficiency arguments alone may not persuade those who hold deeply conservative views about women’s roles.

“If you think that women should be bearing children and take care of the household, if that's the primary role of women, then no matter how many efficiency arguments you make, I don’t know if that’s going to get reflected in policy.” Deshpande

Petrongolo adds that recent economic research has become more explicit about the efficiency losses created by constraints on women’s opportunities. Importantly, she challenges the idea that gender equality is a zero-sum game. “In many cases, there isn’t so much of a trade-off”, she explains, noting that reducing barriers benefits both women and men, even in female-dominated professions.

Laws, norms, and the limits of legal equality

While most countries have formally equalised women’s legal rights, the episode makes clear that legislation alone cannot deliver equality in practice.

“For the vast majority of countries, the legal rights have been largely equalised. But very importantly, the behaviour of individuals and groups in society is not simply shaped by legal constraints.” Petrongolo

Instead, social norms – about appropriate roles for women and men at home and at work – continue to shape decisions. These norms are often more restrictive in lower-income settings, though Deshpande warns against treating them as static or culturally fixed.

“I don't believe that norms are static”, she states, pointing out that Europe’s current norms differ greatly from those of the early twentieth century. Drawing on Claudia Goldin’s work, she shows how expanding labour market opportunities can themselves drive changes in norms, rather than norms needing to change first.

Recognising, reducing, and redistributing unpaid care work

Across countries, unpaid care work remains heavily feminised and often invisible in policy discussions. In India, for example, governments may exhort women to join the workforce while failing to address childcare, transport and eldercare – the very constraints that prevent women from accessing paid work.

“If you just talk about ‘oh, women should just go out and work’, that’s not going to happen.” Deshpande

Without public or publicly supported care services, women cannot offload the unpaid labour that dominates their time.

Measuring work, recognition, and power

The episode also interrogates how labour force participation is measured and what these metrics capture, or miss. Petrongolo explains that in low-income economies, the boundary between paid and unpaid work is often blurred, especially in agriculture and family enterprises.

“Measurement is important, not just to measure quantities in the right way, but also to recognise that... they all involve very different kinds of working conditions, work satisfaction, prestige, and economic power.” Petrongolo

Deshpande goes further, warning that counting women’s work does not automatically improve their status. Recognition, remuneration, and decision-making power matter just as much.

“Counting is kind of a statistical fix… and it doesn’t really change the woman’s position in the household.” Deshpande

The result is that women often work more than men across all forms of labour, yet enjoy less leisure and economic autonomy. As Petrongolo puts it plainly, “this means that they enjoy less leisure so, in economic terms, they have less utility”.

Mainstreaming gender across all policy areas

In concluding, both speakers argue that gender should not be treated as a niche policy concern. Deshpande stresses that infrastructure, trade, health, and macroeconomic policies all have gendered effects, whether policymakers acknowledge them or not.

“I don’t think we should think of policies related to gender as a kind of a separate basket of policy.” Deshpande

Instead, a gender lens should be applied across all areas of development strategy.

While progress is uneven and backlash remains a risk, the long-term trajectory is positive.

“Progress towards women’s equal rights has not been linear… but if you just plot the trajectory over the last 150 years, it is in the upward direction.” Deshpande