Friday, June 22, 2018
Business

First lady is on the right track about GDP and educating girls

The statement

"Research even shows that sending more girls to school can boost an entire country's GDP."

Michelle Obama, March 21 on Medium

The ruling

Research does show that a higher percentage of girls in school correlates with a higher gross domestic product. But those findings are much more limited than many people understand.

Behind all the research, there's uncertainty about whether a stronger economy leads to more girls in school, or if more girls in school leads to a stronger economy.

The White House press office backed up the first lady's claim by citing policy reports which declared that educating girls and young women would boost a country's economy. One from the World Bank said, "By effectively educating more women — that is, providing more women with a high-quality education — more will enter the labor market, and the economy will show the favorable results."

Those reports didn't actually give the underlying research, so we'll cover the highlights.

• A 2009 article in the journal Feminist Economics compared regions of the world and measured gender gaps in both education and employment. That's worth noting because, while the two generally go hand-in-hand, they are separate. You can educate girls, but if companies won't hire them, a lot of the economic benefit is lost.

This study's bottom line was that between 1960 and 2000, East Asia's growth rate was .9 percent higher than the region of the Middle East-North Africa. The difference was due to the higher fraction of girls in school in East Asia.

• A 2011 World Bank study took 14 countries and teased out what would happen if every girl finished whatever level of school she was in — either primary or secondary. Not surprisingly, the economic impact depended hugely on a country's starting point. India and China, for example, had very low rates of girls not completing school, while on the opposite end, places like Burundi and Senegal had dropout rates over 80 percent.

So the study found that getting girls and young women to complete a given level of schooling added a "barely noticeable" amount in India and China, while in the other countries, researchers predicted a hefty rise.

One important contribution of this research is it factored in the diminishing returns of educating more women. When more people hit the job market, it tends to drive wages down. There's still a net gain, but in this study, earnings could be about 20 percent less than you might expect.

• In a 1999 World Bank paper Gender inequality, income and growth: Are good times good for women?, economists David Dollar and Roberta Gatti worked with data on 100 nations. The finding that gained the most traction was that "in the countries with higher initial education, an increase of 1 percentage point in the share of adult women with secondary school education implies an increase in per capita income growth of 0.3 percentage points."

That might seem like a simple equation, but it actually makes two points that are often overlooked.

The economic growth took place only in middle-income countries that already had a higher rate of educating women. "For the poorer half of the observations, there is no relationship between female attainment and income," the authors wrote.

The other generally ignored element is that the 1 percent increase in educated women applies to completing secondary education. Simply putting more girls in classrooms at any grade level wouldn't necessarily deliver the same results. You have to get the girls all the way through high school.

Obama's statement is accurate but it needs additional information. We rate this claim Mostly True.

Edited for print. Read the full version at PolitiFact.com.

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