Women's Human Capital and Economic Growth in the Middle East and North Africa

By Torabi, Fatemeh; Abbasi-Shavazi, Mohammad Jalal | Journal of International Women's Studies, July 2015 | Go to article overview

Women's Human Capital and Economic Growth in the Middle East and North Africa


Torabi, Fatemeh, Abbasi-Shavazi, Mohammad Jalal, Journal of International Women's Studies


Introduction

The world has been amazed by the social and political movements taking place in the Middle East and North Africa (MENA) since 2010, particularly a large presence of young men and women in street demonstrations. MENA includes 19 Muslim countries, 14 countries in Middles East (Iran, Turkey, Syria, Iraq, Jordan, Lebanon, Palestine, Kuwait, Bahrain, Qatar, Oman, United Arab Emirates (UAE), Yemen and Saudi Arabia) and 5 countries in North Africa (Egypt, Libya, Tunisia, Algeria and Morocco). The population of the region was 460,998,000 (48.8% women and 51.2% men) in 2012 (United Nations, Department of Economic and Social 1 2 affairs, Population Division 2013). Despite considerable social, economic and political diversities among countries in the region (Jones and Karim 2005), the recent movements have in part been attributed to high unemployment rates and poverty among young people (United Nations Population Fund 2011).

The process of demographic transition (i.e. changes from high to low rates of mortality and fertility) in MENA has increased the share of working-age population and created a favorable age structure for economic growth, which is often called the demographic dividend (Bloom, Canning and Sevilla 2003). In populations consisting of a large proportion of children (when fertility is at high levels) or of elderly people (when cohorts born before the fertility decline reach old ages), a considerable amount of resources are devoted to the needs of less productive segments of the population. This can hinder the pace of economic growth. Between these stages and when the population consists of a large proportion of individuals at working ages, a window of opportunity for economic growth is opened. This opportunity does not operate automatically and depends on the characteristics of individuals and the broad context in which they act. As Bloom, Canning and Sevilla (2003: xi) put it, "the combined effect of this large working-age population and health, family, labor, financial, and human capital policies can effect various cycles of wealth creation".

An extensive literature exists on how changes in the population's age structure (or the distribution of different age groups in the population) can influence its economic growth (see, e.g. Bloom and Williamson 1998, Bloom, Canning and Sevilla 2003, Mason 2003, Mason and Lee 2004). In a global comparison, Bloom, Canning and Sevilla (2003) show that not all countries have benefited from demographic dividend to boost their economic growth. East Asian countries have made the most of this opportunity and experienced an unprecedented economic development, called an economic miracle. In fact, the demographic dividend has been accounted for between one-fourth and two-fifth of East Asia's economic miracle. Latin America has not been as successful as East Asia in making the best use of its demographic dividend; between 1975 and 1999, the GDP per capital annual growth rate of the region has only been 0.7 percent of that in East Asia. They attribute the success of East Asia to implementation of policies (particularly trade policies) that facilitate absorbing labor force to productive employments and the Latin America's failure to take a full advantage from its demographic dividend to the lack of such policies.

In order to take a full advantage of MENA's demographic dividend, it is important to identify different factors contributing to economic growth in this region. Human capital is an important determinant of long-run economic growth (Hartog and Maassen van den Brink 2007). It has been mentioned that women comprise nearly half of the MENA's population. Thus, investment in their human capital is expected to have important implications for the region's long-run economic growth and for maximizing the benefits created by the demographic dividend.

This paper aims to determine the extent to which women's human capital contributes to the economic growth in MENA. …

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