Sovereign Debt Defaults and Gender Inequality in Developing Countries

This article investigates the impact of sovereign debt defaults on gender inequality. The study applies dynamic panel econometric techniques to data for 130 developing countries from 1971 to 2022, finding that sovereign debt defaults increase gender inequality in developing countries in numerous dimensions, including education, employment, political representation, and legal rights. Through heterogeneity analysis, the study finds consistent adverse effects of sovereign debt defaults on gender inequality across regions. The effects tend to be more pronounced in high-income developing countries and those with high levels of defaulted sovereign debt. The article further examines the influence of two global sovereign debt crises stemming from the 2007–08 financial crisis and COVID-19 pandemic on gender inequality. Results from the Synthetic Control Method show that, compared to the 2007–08 crisis, the COVID-19 crisis significantly contributed to widening gender inequality. These findings underscore the need for proactive policies to address gender inequality and promote diversity, equity, and inclusion initiatives.HIGHLIGHTSSovereign debt defaults widen gender inequality in developing countries.Adverse effects span women’s education, employment, and political representation.Gender inequality rises most in high-debt, higher-income developing countries.COVID-19 debt crisis amplified gender inequality more than the 2007–08 debt crisis.Results support gender-responsive debt policy and crisis management.