Macroeconomic Instability and Gender Inequality in Labor Markets in the Developing Countries

Abstract This study examines the relationship between macroeconomic volatility and gender inequality in labor markets in developing countries. Although gender equality is widely recognized as a key driver of inclusive and sustainable economic development, women continue to face persistent disparities in employment opportunities, wages, and access to productive resources. These inequalities are often exacerbated by unstable macroeconomic environments characterized by fluctuations in economic growth, inflation, exchange rates, and fiscal imbalances. Using a panel dataset covering 148 developing countries over the period 2000–2023, this paper investigates how macroeconomic instability influences gender disparities in labor market participation and wage outcomes. The empirical analysis relies on a dynamic panel estimation using the Generalized Method of Moments (GMM) to address potential endogeneity issues and unobserved heterogeneity across countries. The results indicate that macroeconomic volatility significantly increases gender inequalities in economic participation, as women are disproportionately concentrated in vulnerable and informal sectors that are highly sensitive to economic shocks. Furthermore, the findings reveal a nonlinear relationship between macroeconomic instability and gender wage inequality, suggesting that economic shocks initially widen gender wage gaps before institutional responses and labor market adjustments partially mitigate these disparities. These results highlight the importance of implementing gender-sensitive macroeconomic policies, strengthening social protection systems, and promoting inclusive labor market institutions in order to reduce women’s vulnerability to economic shocks and foster equitable and sustainable development in developing countries. JEL Classification : E32 ; J16 ; J21 ; O11 ; O15 .