Info Box 3: Quantifying the impact of empowering women

The higher dependency ratio, coupled with lesser employment and earnings, means that female-headed households are poorer than those headed by men,36 despite women being the primary recipients of state social support. NIDS data (waves one-five) suggests that about 15% of household entries into poverty are associated with the household head shifting from male to female.57 Children inherit the effects of this gender inequity, reproducing cycles of intergenerational poverty, in which their own prospects are limited by those of their caregivers. Even with expanded access to health and social services post-democracy, health and economic outcomes of children remain strongly tied to the conditions of previous generations.58

Women are more likely than men to invest a higher share of their household income on educating their children,1 meaning that realising demographic dividends, both now and in the future, is critically dependent on elevating women.60

Info Box 3: Quantifying the impact of empowering women

In a report published by the IMF, Christian Gonzales and his co-authors (2015) empirically illustrate the impact of gender inequality on income inequality.59 Using a composite measure of gender inequality developed by the United Nations Development Programme (UNDP) called the Gender Inequality Index (GII), the study quantifies the magnitude of the impact of gender inequality on the per capita GDP growth rate, the Gini index, the share of income held by the top 10% and 60% of income earners, and the bottom 40% and 20% of income earners.

The GII ranges from 0 (perfect gender equality) to 1 (perfect gender inequality). This index measures inequalities in three aspects of human development61: • Reproductive health: quantified by the maternal mortality ratio and adolescent birth rates; • Empowerment: measured by the proportion of seats in parliament held by women and the share of adult women and men over the age of 25 with some secondary education; • Economic status: estimated by labour force participation rate of the female and male populations aged 15 years and older.

Using the same framework as the Inequality-Adjusted Human Development Index (IHDI), the GII highlights the differences in health, empowerment, and economic achievement between men and women.61 According to the GII, the most gender equal country in the world is Switzerland with a score of 0.037, and the most unequal country is Yemen, with a GII score of 0.834.62

Figure 13 shows the results of a fixed effects regression model which estimates the effect of gender inequality (GII) on income inequality (Gini) after controlling for other factors which have been empirically shown to impact inequality, such as trade and financial openness, technology, the depth of the financial sector, and the share of the population over the age of 65, among others.

Given that South Africa has a Gini index of 631 and a GII of 0.422,62 using the estimates provided by Gonzales et al., if, holding all other factors constant, South Africa's GII improved to that of Switzerland (the highest ranked country on the GII) to 0.037, this could translate to a 3.8% decline in its Gini index. It could also result in a 6.5% and 3.9% decline in the income share of the top 10% and top 60% of income earners, respectively, and a 3.6% and 2.3% increase in the income share of the bottom 40%- and 20%-income earners, respectively.