The Central Bank of Colombia has released a Borradores de Economía working paper assessing the macroeconomic effects of reducing Colombia’s gender wage gap attributable to discrimination, using a calibrated general equilibrium model. It estimates that halving the discriminatory wage gap could raise Colombia’s long-run gross domestic product (GDP) by around 8%. The paper (by Oscar Iván Ávila-Montealegre, Anderson Grajales-Olarte, Juan José Ospina-Tejeiro and Mario Andrés Ramos-Veloza) attributes the increase to higher female labour force participation, higher wages and greater capital accumulation, alongside a reallocation of household time with women devoting more hours to market work and men taking on a larger share of domestic production. The magnitude of the gains depends on the substitutability between male and female labour in market and domestic sectors, and the estimated benefits are smaller when the policy effort to reduce the gap is financed through taxes. The Central Bank of Colombia notes that Borradores de Economía papers are provisional and reflect the authors’ views rather than those of the institution or its Board, and the paper is available for download in English only.
Central Bank of Colombia 2026-02-12
Central Bank of Colombia publishes working paper linking a 50% cut in the discriminatory gender wage gap to an 8% long-run GDP gain
The Central Bank of Colombia's Borradores de Economía working paper estimates that halving the gender wage gap due to discrimination could boost Colombia's long-run GDP by approximately 8%, driven by increased female labor participation and capital accumulation. The paper highlights that these findings are provisional and reflect the authors' views, not the institution's.