Modelling the asymmetric impact of economic growth and poverty on gender inequality: Evidence from India using nonlinear ARDL analysis

• Published date: 01 August 2024
• Author: Inayat Ullah Wani,Shaukat Haseen,Ishfaq Nazir Khanday
• Date: 01 August 2024
• DOI: http://doi.org/10.1002/pa.2931

RESEARCH ARTICLE

Modelling the asymmetric impact of economic growth and

poverty on gender inequality: Evidence from India using

nonlinear ARDL analysis

Inayat Ullah Wani | Shaukat Haseen | Ishfaq Nazir Khanday

Department of Economics, Aligarh Muslim

University Aligarh (AMU), Aligarh, Uttar

Pradesh, India

Correspondence

Ishfaq Nazir Khanday, Department of

Economics, Aligarh Muslim University Aligarh

(AMU), Aligarh-202002, Uttar Pradesh, India.

Email: ishfaqnazirkhanday@gmail.com

The study is based on the premise that economic growth (henceforth EG) and pov-

erty impact men and women differently. As a result, shocks to these variables cannot

be expected to have a symmetric impact on gender inequality (henceforth GI). Rather,

positive and negative shocks in poverty and EG impact men and women asymmetri-

cally which necessitates the study of their relationship using an asymmetric rather

than a symmetric approach. This study is the first to utilise nonlinear autoregressive

distributed lag (NARDL) analysis and asymmetric cumulative dynamic multipliers to

investigate the asymmetric impact of EG and poverty on GI in India using annual data

over the period 1995–2021. Additionally, we construct a comprehensive index of GI,

using principle component analysis (PCA), which is a maiden attempt to account

reported crime against women, in addition to gender disparities in health, education,

labour market and parliamentary representation. The results report that positive

shocks in EG reduce GI and negative shocks increase it. However, negative shocks

increase GI more than positive shocks decrease it justifying the asymmetry. With

respect to the asymmetric impact of poverty on GI, the study finds that both positive

and negative shocks in poverty increase GI, however, the positive shock in poverty

has a larger impact than the negative one. This is in consonance with the literature

on intrahousehold gender disparities in consumption. The study finds new evidence

that EG and poverty reduction favours men more than women and recommends its

inclusion in policy formulation.

KEYWORDS

economic growth, gender inequality, NARDL, PCA, poverty

1|INTRODUCTION

Economic growth and poverty reduction are highly coveted indicators

of economic development and usually the policy makers must walk a

tightrope to strike a balance between the two. While EG

1

measures

the scale of production in an economy, poverty reduction signifies

whether the benefits of EG ‘trickle down’to the bottom of the eco-

nomic pyramid. Gender inequality/equality has an intimate connection

with EG as well as poverty. Studies have found that EG can correct GI

overtime (Kabeer & Natali, 2013; Klasen & Lamanna, 2009; Santos

Silva & Klasen, 2021). Conversely, gender equal society means that

women can equally participate in and contribute to paid economic

activities, stimulating growth through higher consumption expendi-

ture and savings (Lagerlöf, 2003; Matthew et al., 2020; McGee

et al., 2020; Morrison & Morrison, 2007). Similarly, poverty breeds GI

as women/girls become the first victims of consumption/welfare

rationing in times of household income distress. The relationship also

runs backwards as higher GI make women more susceptible to

1

Economic growth and growth have been used synonymously throughout the paper.

Received: 17 November 2023 Revised: 11 March 2024 Accepted: 4 June 2024

DOI: 10.1002/pa.2931

J Public Affairs. 2024;24:e2931. wileyonlinelibrary.com/journal/pa © 2024 John Wiley & Sons Ltd. 1of17

https://doi.org/10.1002/pa.2931

hunger, food insecurity and hence vulnerable to poverty (Botreau &

Cohen, 2020).

India is the world's most populous nation and its fifth largest

economy. It boasts a bourgeoning young population and is home to a

growing hub of innovation and technology. Since 2000, the Indian

economy has grown by 6%–7% annually, while poverty and GI have

not declined commensurately. Using the income metric of poverty,

OPHI and UNDP (2021) report that 22.5% of India's population still

lives below the poverty line of US $1.90 a day in purchasing power

parity. Additionally, 25.01% population experiences multidimensional

poverty in health, education, and standard of living (NITI Aayog,

2021). Speaking of GI, out of 146 countries globally, India ranks

107 on educational attainment of women, 143 on gender gaps in eco-

nomic participation and opportunity and 146 on health and survival of

women according to the Global Gender Gap Report 2022 published

by the World Economic Forum (WEF). Despite being the world's larg-

est democracy, the proportion of women parliamentarians in India is

less than 14%.

2

India lost three places on gender gap index, slipping

from 132 to 135th place globally according to the Global Gender Gap

Report 2022. The NCRB's ‘crime in India’reported that India has

recently seen a surge in every sort of crime against women with an

average of 49 cases lodged every hour, most of them committed

within the household under the legal term of ‘cruelty by husband or

his relatives’.

3

Outside the household women face kidnapping and

abduction, molestation, rape and acid-attacks with 208 cases of kid-

napping and abduction and 87 cases of rape reported daily in India.

4

This anomalous occurrence of higher growth and deteriorating condi-

tion of women induces research on the linkages between GI, EG and

poverty in India overtime.

A rich profusion of literature has already discussed the impact of

EG and poverty on various dimensions of GI. Regarding the gender

and poverty nexus, the literature is quite vocal about the strong con-

nection between poverty and GI especially in developing countries

(Lastrapes & Rajaram, 2016; Warchold et al., 2021). Sharma (2023)

found that the female-headed households, with or without children,

who are part of the active labour force in United States, have the

highest risk of being poor than the male-headed ones. Workneh

(2020) also found strong positive association between GI and extreme

poverty in sub-Saharan African countries. Similar results were also

seen by Ramos et al. (2020) in case of Mexico. Leal Filho et al. (2023)

in their assessment of Sustainable Development Goals (SDGs) from a

gender perspective found that the GI impact of SDG 1 (no poverty) is

around 85.7% according to their estimates. Klasen and Lahoti (2016)

revealed that based on household data, women have a higher chance

of being misclassified as non-deprived than men, while using individ-

ual data, multidimensional poverty is higher among women than in

men. Similar results of household-level data bias against women have

also been seen by Vijaya et al. (2014).

Similarly, the literature on the impact of EG on GI has delineated

several channels through which higher EG could help in establishing a

gender equal society (Agénor & Canuto, 2015; Baliamoune, 2007;

Bertay et al., 2020; Santos Silva & Klasen, 2021). Becker and Lewis

(1973), Becker and Tomes (1976) and many others espoused the fer-

tility channel whereby higher EG is associated with lower fertility and

enhanced human capital of children. Doepke and Tertilt (2009) found

that higher levels of growth overtime lead to a reduction in the biases

against women both within and outside the household and expand

the spectrum of rights enjoyed by the women. Additionally, Green-

wood et al. (2005) and Wani et al., (2023) propose that technological

growth, which accompanies EG leads to the introduction of time-

saving home appliances which free women from the shackles of

household chores and allows them to participate in economic activi-

ties. In the recent literature Xu et al. (2023) found a significant nega-

tive relationship between multiple dimensions of GI and EG in a

sample of 41 African countries. Similar results were reported by Juhá-

sová et al. (2023) in case of European Union (EU) countries. Similarly,

Wani and Khanday (2024) found a positive relationship between gen-

der equality and EG in a panel study of 46 developing countries.

Although a large bodyof literature has highlighted the relationship

between poverty andGI on the one hand and EG and GI on the other,

a fundamental assumption which runs through all these studies is that

the impact of a positive shock in poverty or EG on GI is a mirror image

of a negative shock. That is, a unit increase in poverty has the same

impact on GI asa unit decrease,and same in case of EG. However, such

an assumption is too restrictive to be real. In fact, Shin et al. (2014)

remark that ‘non-linearity is endemic within the social sciencesand that

asymmetry is fundamental to human condition’. Numerous studies, dis-

cussed below, have indirectly proved in different contexts that shocks

in growth and povertyaffect men and women differently. Womentend

to bear the major brunt of poverty and negative income shocks than

men. Thus positive and negative shocks to growth and poverty cannot

be deemed same from theperspective of GI. Any conclusions basedon

this ‘symmetricimpact’assumption would hide the actualimpact on GI

in the presenceof shocks to growth and poverty.

Given this background, the current study is an attempt to expli-

cate this asymmetric impact of growth and poverty on GI in the Indian

context using nonlinear autoregressive distributed lag model (NARDL)

developed by Shin et al. (2014). The study aims to confirm the empiri-

cal relevance of the following hypothesis:

H01. The positive and negative shocks in economic

growth have no significantly different impact on gender

inequality.

H02. The positive and negative shocks in poverty have

no significantly different impact on gender inequality.

The study contributes to the extant literature in at least two

major ways. First, we use a PCA generated index of GI which is based

2

Seventy-seven women out of 523 total seats in the lower house and 32 women out of

239 total seats in the upper house. Sourced from https://sansad.in/poi.

3

National Crime Records Bureau, Crime in India report 2021, volume 1, page XII (crime in

India snapshots).

4

National Crime Records Bureau, Crime in India report 2021, volume 1, pages 214 and

218, respectively. The source reports total of 76,263 and 31,878 cases under the respective

crimes which when distribute over 365 days approximately gives the mentioned figures.

2of17 WANI ET AL.