Gender Norms Limit Growth

Gender equality plays a pivotal role in fostering human prosperity, shaping labor markets, fertility decisions, and the sustainability of social institutions. This study investigates how the prevailing gender norms in a country influence the fertility rate and long-term economic growth. To this end, we develop an overlapping generations model featuring endogenous fertility and labor supply in which both gender norms and research and development activities are explicitly incorporated. We show that conservative gender norms reduce both the fertility rate and the rate of income growth in the steady state. We further explore the impact of a policy intervention that relaxes gender norms and analyze the ensuing transition dynamics, deriving implications for policy design and welfare. Finally, we extend the model to examine how a gradual evolution in gender norms affects the long-run development of the economy.