What’s good for girls is good for global finance

Everybody say...aaah!

Horrific new data released by the latest census in India and analysed on the Guardian’s development blog shows that things are getting worse for girls.  The ratio of girls to boys at birth has fallen from 927 girls per 1000 boys in 2001, to 914 girls per 1000 boys today.  In the worst district, the ratio is 774 girls to 1000 boys.  Usually you’d expect about 950 girls per 1000 boys. That adds up to 15 million girls not born in India in the last 10 years.

Wealth and urbanisation aren’t changing this – Mumbai’s figures are worse than the national average.  They might even be making it worse, since medical progress, through the easy availabilty of ultrasound, makes it easier to identify girls and safer abortions reduce the risk of getting rid of them.

This is a tragedy, an abuse of just about all the rights I can think of, and a pretty horrific illustration of how new technology can sometimes serve outmoded and repressive ideologies rather than contribute to their overthrow, as the technological optimists would have it. 

But it’s also, possibly, storing up big economic problems for the future – for all of us.  Research in China, where the ratio is even worse, at about 819 girls per 1000 boys, finds an interesting link between the one-child policy, the preference for boys, and high savings rates.  It goes like this: there are more boys than girls.  When the boys grow up, they are competing over the limited number of girls in the marriage market, and so their parents give them a helping hand by saving up for a nice flat, a nice car (yep, this stuff really does work, like it or not). The authors show that Chinese savings rates shot up in around 2002, when the generation where boys really outnumbered girls reached the age when they started to think about marriage, and that savings rates are higher in areas where the gender ratio is most skewed.  They argue that this effect explains about half of China’s high savings rate.

Now, as I’m sure all the well-informed readers of this blog will know, the high rate of savings in China was one of the factors causing the global imbalances which were one of the contributors to the financial crisis. 

So there you have it.  Women’s rights are good for financial stability.  Perhaps a cause that the likely first woman head of the IMF, Christine Lagarde, would like to take up?