The purpose of this review is to assess the relevance of gender differences to macroeconomic policy. It covers several topics where differences between men and women in economic markets are potentially relevant to macroeconomic modeling, examining both insights from theoretical models and results from empirical studies. Some of the empirical literature draws upon the experience of developing countries, but in some areas of research, the empirical research has hardly extended beyond developed countries and thus a comprehensive survey needs to rely upon studies from a range of countries. It concludes by suggesting the implications of the research surveyed here for the work of the International Monetary Fund (IMF).
While discussion of the impact of gender issues on macroeconomic issues is relatively recent, gender differences have long been incorporated into economic analysis at the microeconomic level.1 In this respect, economists have examined a wide range of issues to find out whether men’s and women’s economic behavior differs and, if so, what the effects of these differences are and how these differences might influence public policies. For example, in studying the economic behavior of the household, economists have found that a household’s spending patterns depend on the share of the household’s resources controlled by women or men. Women in control of their household’s resources spend more on basic necessities for the household and on the development of their children’s potential than men do in similar circumstances. In view of this empirical finding, in countries where women’s opportunities to earn a living are limited by cultural and economic factors, public policies could be geared to enhancing women’s employment possibilities, yielding benefits to their homes and their children, and ultimately their societies. In this context, taking account of gender differences in economic behavior and in the effects of public policies already enriches economic modeling and influences public policy decisions ranging from the structure of the tax system, spending programs, and social insurance programs as well as regulatory policies and structural reforms.
Against this backdrop, gender differences in behavior that are the outcome of private decisions or reflect the influence of public policies may also lead to different outcomes in the macroeconomy for major components of the economy, such as aggregate consumption or investment, and hence for broader economic aggregates such as national output. To date, however, fiscal and monetary policies have rarely been formulated with gender differences in mind.