Gender Equity and the Escape from Poverty

We set up a unified growth model with intra-household bargaining of spouses. In line with the data for less developed countries, we assume that women desire to have no more children than men and to invest no less in education per child. We show analytically that women’s empowerment promotes the transition from a state of high fertility, low education, and sluggish economic growth towards a state of low fertility, high education, and fast economic growth if the child quantity–quality preferences of spouses differ substantially. In this case, targeted policies to empower women represent a promising development strategy.