Gender differential in economic participation, foreign aid and productivity: Pathway to broad-based growth

Abiola John Asaleye and Kariena Strydom

Socio-Economic Planning Sciences, 2025, vol. 101, issue C

Abstract: Gender inequality and poverty reduction are critical challenges in developing economies, particularly in the Southern African Development Community (SADC). This paper investigates the effect of gender differential in economic participation and foreign aid on productivity, specifically addressing three objectives: the efficacy of the medicine model of aid on productivity, the long-run effects, and the impact of aid shocks. Using panel Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Augmented Mean Group (AMG) estimators, the study examines the long-run impact. The Panel Vector Error Correction Model (PVECM) is employed to analyse the effect of aid shocks. For robustness checks, employment indicators are substituted for economic participation metrics. Empirical findings from the baseline model affirm the medicine model's proposition regarding the implications of aid on the SADC but reveal that aid has a negative coefficient in its ordinary form. The extended model demonstrates a significant and long-run negative impact of foreign aid on productivity. However, when considering the interactive effects, aid combined with economic participation positively influences productivity. Notably, the interaction of foreign aid and female economic participation significantly enhances productivity more than aggregate or male economic participation alone. Additionally, aid shocks negatively affect male economic participation more than the aggregate, with female economic participation being the least impacted. The study underlines the importance of prioritising female economic participation in aid programs to promote broad-based growth in the SADC region. The study recommends that aid agencies focus resources on projects that enhance female economic participation and meticulously evaluate project outcomes upon completion.

Keywords: Productivity; Economic participation; Foreign aid; Gender; Panel estimation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0038012125000990
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:101:y:2025:i:c:s0038012125000990

DOI: 10.1016/j.seps.2025.102250

Access Statistics for this article

Socio-Economic Planning Sciences is currently edited by Barnett R. Parker

More articles in Socio-Economic Planning Sciences from Elsevier
Bibliographic data for series maintained by Catherine Liu ().