Impact of Gender Discrimination Laws on Inflation: Evidence from Panel Data

In recent years, there has been a burgeoning literature exploring the effects of gender discrimination on macroeconomic outcomes ranging from productivity and gross domestic product per capita to economic growth. A separate literature in recent decades on the time-inconsistency of monetary policymaking has examined the role of labor market distortions in explaining differences in cross-country inflation rates. This paper brings these two disparate streams of research together and explores the impact of gender discrimination laws on inflation. Using the World Bank’s index of gender discrimination laws from the Women, Business and Law database, the results from the system generalized method of moments estimator applied to 117 countries over the period 1970–2019 indicate that gender discrimination laws have a positive causal impact on inflation. This effect is robust to different specifications and estimation methodologies. From a policy perspective, the findings suggest that labor market reforms aimed at reducing gender discrimination laws can be an effective mechanism in promoting low inflation.