Female employment and income inequality in Sub-Saharan Africa

Income inequality remains a persistent challenge in sub-Saharan Africa (SSA), hindering the region’s progress toward sustainable development. The World Inequality Database notes that the richest 10% in the region owned about 56% of the total income in 2023, reflecting the prevalence of income inequality. Moreover, this disparity is further compounded by gender-based economic vulnerability, as 79.6% of women were in vulnerable employment compared to 64.3% of men in 2023 (World Bank, 2025). In addition, female labour force participation in the region stood at 64% in 2022 compared to 76% for men (World Bank, 2022). There is no coincidence that these could deepen both gendered and national inequality in SSA countries. Against this backdrop, this study employs the panel Generalized Method of Moments (GMM) and Fixed Effects Instrumental Variable (FE-IV) estimators to examine the effect of female participation across different segments of the labour market on income inequality in SSA. The study finds that the concentration of female employment in the informal and agricultural sectors is associated with rising income inequality. However, female employment in the industry and services sector significantly reduces income inequality in the region. A rationale for this finding could be the relatively underdeveloped and low-paying nature of the agricultural and informal sectors of many SSA economies. The finding suggests enhancing female participation in formal sectors to reduce income inequality in the region. The segregation of effects across sectors provides deeper insights for policy interventions. This study contributes to the African inequality literature by linking gendered labour market dynamics to income inequality in SSA.