Description

This paper examines the macroeconomic interaction between informality and gender
 inequality in the labor market. A dynamic stochastic general equilibrium model is built to
 study the impact of gender-targeted policies on female labor force participation, female
 formal employment, gender wage gap, as well as on aggregate economic outcomes. The
 model is estimated using Bayesian techniques and Indian data. Although these policies are
 found to increase female labor force participation and output, lack of sufficient formal job
 creation due to labor market rigidities leads to an increase in unemployment and informality,
 and further widens gender gaps in formal employment and wages. Simultaneously
 implementing such policies with formal job creating policies helps remove these adverse
 impacts while also leading to significantly larger gains in output.

More publications in this series: Working Papers

More publications by: Purva Khera