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When Growth Is Not Enough: Gender Inequality, Poverty, and Economic Performance in Eastern Europe

Review of Development Economics

Published online on

Abstract

["Review of Development Economics, EarlyView. ", "\nABSTRACT\nEconomic growth is often assumed to be sufficient for reducing poverty; however, persistent gender inequalities in labor markets may limit the extent to which growth translates into inclusive outcomes. This paper investigates the relationship between poverty and economic growth, emphasizing gender inequality as a structural determinant. The analysis covers 10 Eastern European EU member states over 2009–2023, a region with distinct post‐transition dynamics and limited coverage in the poverty–growth literature. Using a system of simultaneous equations estimated with three‐stage least squares (3SLS) and Seemingly Unrelated Regressions (SURs), complemented by dynamic panel estimators, the study addresses endogeneity often ignored in earlier work. With persistent gender disparities, GDP growth is not consistently associated with lower poverty risk. By contrast, poverty reduction is associated with higher economic growth, highlighting the importance of social inclusion for sustainable development. Gender employment and wage gaps are associated with both poverty and growth, while higher female labor force participation lowers poverty risk but does not systematically enhance growth, possibly reflecting labor market inefficiencies. This study contributes to the literature by identifying gender‐based labor market inequalities as key structural mechanisms associated with the poverty–growth relationship and by providing new empirical evidence from Eastern European EU countries.\n"]