This working paper provides evidence that policies to reduce gender inequality do not necessarily reduce overall inequality, but in fact might even have a dis-equalizing impact. The authors examine the relationship between female labor force participation and inequality. They find out that an increase of female labour force participation has an inegalitarian impact in many developing countries - particularly those with relatively low initial levels of participation. This is because women in the top quintile have a higher rate of return than women in the bottom quintile. These findings show that fostering FLFP without considering its distributional impact can have potentially negative consequences in terms of inequality. Policies should be targeted towards women in the lower deciles of the income distribution in order to also reduce overall inequality.
