Is Macroeconomic Policy Blind to Gender - Essay Example

? Gender and Macroeconomics GENDER AND MACROECONOMICS Introduction The conventional statistics and conceptual framework that is utilized for the design of macro-economic policy are blind to gender. These fail to recognize that the contribution of women in the economy is grossly and systematically underestimated, as well as the existence of unpaid care economy where women perform most of the duties; maintenance of the labor force, maintaining order of the social fabric, maintenance of social cohesion, good neighborliness, and civic responsibility (Seguino, 2010: p1215). Considering macroeconomics via a gender lens indicates the importance of processes not attached to the market in the healthy function of economies, as well as to the ways that liberalization of finances places extra burdens on the people who provide unpaid care and undermine public provision as support of the work. Neither the individual nor gender has been a main concern of macroeconomic policy or macroeconomic theory. It is also clear that gender is ignored in the majority of the conventional means of macro-economic behavior that are representative of the manner in which individual women and men are affected by macroeconomics (Seguino, 2010: p1216). Individual economic indicators are rarely referred to with macroeconomic language being un-gendered and impersonal. In addition, the sex based labor division is rarely mentioned in macroeconomic policies. Although the policy impact on functional categories of actors in the economy like investors, savers, sellers, and buyers can be identified in debate on macroeconomic policy, absence of gender-specific references suggests that it is assumed to have an equal effect on men and women. Literature especially that covering women in developing nations shows that this is not so. Bringing a Gender Perspective into Macroeconomics Conventional policy frameworks on the economy are ignorant of non-market work like voluntary, community work and unpaid care work. These activities are normally taken for granted and rarely discussed in monetary or fiscal policy. Rather than being considered as economic activities, these are thought of as social roles. However, these are economic activities because they need the utilization of scarce resources, as well as because they give vital inputs to private and public economic sectors. Unpaid care work can be described as a tax in kind levied on domestic sectors so as to reproduce the economy with the tax paid mainly by women (Elson, 2011: p240). Unpaid work can be incorporated into macroeconomic policy making through viewing national output as being a product of the domestic sector, the public sector, the private sector, and equally important the voluntary sector. Wealth creation in a country is dependent on output from the four sectors. At times, policy makers tend to assume that the sector that creates wealth is the private sector with other sectors spending that is produced by the private sector. However, these four sectors depend on each other. The private sector cannot create wealth for use by families, the government, and the communities if these communities, families, and the government do not create wealth, in turn (Elson, 2011: p241). In particular, unpaid care by women, as well as voluntary work, proves vital for the creation of social and human capital. There are essential differences, of course, between looking after one’s own children and parents and being paid to care for children or old people as an employee for the private and public sector (Elson, 2011: p241). This difference is not personal in nature. The costs for the care given to children and old people in the public and private sector appears in the national accounts, being taken into consideration in decisions on policy. However, the costs regarding unpaid care for children and old people in domestic sectors are not reflected in the national accounts and are, therefore, not accounted for in decisions of policy. However, this care imposes energy and time costs on those who do it. When its costs increase, the caregivers are not able to absorb the costs sans strain. There always should be an essential role attached to unpaid care. However, if this unpaid for care is taken as a free good that is in limitless supply, negative feedbacks will result to the public and private sectors, which, in turn, will reduce their productivity, increasing costs (Elson, 2011: p242). The visible signs of this are loss of workdays, decreased productivity due to absenteeism, stress, ill health, and high turnover of labor. Underinvestment in social and human capital will also be a result. Conventional macroeconomic models, however, do not capture links of this nature. There is research that is underway, which pertains to the development of national economic statistics and gender-sensitive conceptual frameworks that would reveal feedbacks and linkages between macroeconomic outcomes and gender relations (Elson, 2011: p242). In the west of Europe, the public sector has provided, nevertheless, support for those in unpaid work, both the voluntary and unpaid sectors via income transfers and public services. The improvement of the lives of women, historically, has been hand in hand with the provision of support such as this. However, the support is weakened and distorted through three types of prevalent bias; privatization bias, deflationary bias, and breadwinner bias (Elson, 2011: p242). Male breadwinner bias This is a bias that occurs when support carried out by the public sector for unpaid care has its construct on the assumption; women who depend on a male breadwinner carry out care. In the presence of a male breadwinner bias, the access to social insurance for women, pensions, public services, and welfare benefits are made, usually, to the husbands (Elson, 2011: p243). Income for women who are married is even at times aggregated with the income for their husbands for the purpose of taxation. This counterpart’s assumption, by both the public and private sector employers, is the fact that typical workers possess no or little responsibility for the provision of unpaid care. This male breadwinner bias is conducive to labor market participation that is low for married women, with segregation for the majority of the women who actually participate in the secondary labor markets for earners in jobs that have few prospects and low incomes. In the 19590s, this sort of bias was very common at a time when majority of European welfare states were based on the worker, as well as his spouse and children (Elson, 2011: p243). By the late 20th century, this male breadwinner bias had been eroded considerably with increased market participation by a female labor force and a decline in the household ability, in the enjoyment of living standards expected on a one-wage basis. However, this bias is still prevalent in most countries in the eastern part of Europe where it is reinforced by the other two biases that were absent in the 1950s, gathering pace by the late 1980s and early 1990s (Elson, 2011: p243). This bias penalizes female workers for investment, which is not paid in the creation of social and human capital through the denial of social entitlements on a basis that is equal to men. Deflationary bias A deflationary bias is a bias that portends a higher priority to low public debt, low inflation, low budget deficits, low taxation, low public expenditure, low full employment priority, high investment in the public arena, and the realization of the entire potential for making improvements in the availability of services and goods (Elson, 2011: p244). This bias is now entrenched deeply in the institutional framework used to govern macroeconomic policy in a majority of countries. This is constituted in a number of ways. Balanced legislation of the budget that constrains the government to reduce expenditure of the public when there is a downturn in the economic cycle and central banks that possess asymmetrical targets aimed at keeping the inflation below, but not above a level that is targeted. It is also constituted through stability frameworks that seek to incorporate rigid rules concerning budget deficit ratios to GNP, as well as public debt ratios to GNP sans regard to the economic cycle stage, which constrains governments to decrease public sector expenditure during a downturn in the economic cycle (Elson, 2011: p244). Finally, it is also constituted by rules concerning borrowing by the government only for investment allowing investment in physical capital and not investments in social and human capital. These rules act to deepen the current economic recession instead of aiding in recovery. The rules act to undermine livelihoods of both women and men while throwing back the population into a non-market economy (Elson, 2011: p244). The male breadwinner bias is often made worse by the perception that jobs for men are more essential. Moreover, jobs belonging to women need to be discarded first. Female unemployment is, therefore, usually higher than that for men; at the same time, the women have reduced social benefits access. Women, in particular, are faced by specific demands in the provision of last resort safety nets for their families, clothing their children, managing their families on a budget that is dwindling, coping with depression, poor health, as well as having to deal with male destructive behavior informed by the loss of self-worth on losing their jobs. In addition, there are cutbacks in income transfers and public services that would assist women in the tasks (Elson, 2011: p244). However, the most significant cost of this bias has to do with a rise in unemployment while another, which is less visible but more essential in the long term, is the depletion of social and human capital. Women try to do their best but are hindered by the bias. They find it difficult to compensate fully for the market economy failures, coupled to the effects of inappropriate regulations for monetary and fiscal policy. Privatization bias This bias stems from assumptions that there is more efficiency in the private sector compared to other sectors. Privatization bias can operate through 3 privatization forms; complete privatization that involves the sale of public agencies to investors from the public sector, partial privatization that involves contracting of services to private entities from the public sector, and simulated privatization that involves compelling public services to operate as though they are operated privately (Elson, 2011: p245). Privatization bias arises at times when efficiency measures and value for money are utilized. These measures do not account for non-market benefits and costs and primarily focus on financial and physical capital. Therefore, for instance, measures are introduced for the improvement of public hospital efficiency that has the effect of moving the real costs to the households. This increases the amount care work that is unpaid that they have to provide. An example of this is the altering procedures to lessen the time patients spend in hospitals while lengthening the time that they coalescence at home (Elson, 2011: p245). While this leads to a cut back in the costs used for the employment of hospital staff, it also increases costs inherent in the households, which are run by women. Privatization bias has the tendency to make the male breadwinner bias more prevalent. For instance, it worsens the conditions and pay of women in low paid jobs, which increases their dependency on the male partner’s income. This increase in value for money that it is supposed to bring is normally as a result of an intensification in the workload and lower conditions and pay for female occupations like cleaning (Elson, 2011: p246). It also intensifies the male breadwinner bias by the privatization of pension provision and social insurance, which, in turn, reduces the pooling of resources and risks, vastly reducing the possibility of cross-subsidy socially. It makes the women depend more on their male partners for the access of benefits, in addition to also penalizing those, without male partners to share household costs. Provisions for private pension penalize women that have longer life expectancy and employment record breaks. Private insurers are legally enabled to discriminate women regarding the annuities market (Elson, 2011: p246). Factors that lead to poverty that is disproportionate in women, especially in old age is made worse. Engendered macro-economics, Inequality, and Poverty Structural changes in microeconomic policies make women increasingly vulnerable to policies at the macroeconomic level. Monetization leads to substitution of services and goods bought in the market and subject to effects of the macroeconomic policy for services and goods produced for personal consumption in the house (Chant, 2006: p205). However, in the early developmental stages, labor by women is not usually transferred to markets, making women reliant on money that males provide in the household. Resources that were utilized for the subsistence economy are moved into the market and are subjected more to macro policy effects. For instance, land that was formerly utilized for the production of family food in a subsistence economy can be converted to crop cultivation for market sale, which may, in turn, become subject to exchange rate effects and other policies of macroeconomics (Chant, 2006: p205). Therefore, women are increasingly becoming dependent on their male counterparts and more vulnerable to market effects and macroeconomic policy. Basic needs like education and health that, formerly, were met by households and, largely, by the women, have now moved into the public sector and are now increasingly being met by government. Particularly, children socialization has now become institutionalized in the education sector and, together with health care provision, has been moved to the public sector from the household (Elson, 2010: p351). The two services have now become monetized through, direct costs as fees, medicines, or books, or via indirect expenses such as transport costs that are required to access the service. As these become increasingly monetized, they also get increasingly sophisticated and need more resources from the household. Provision of public health care and education is normally given increased priority by governments in most countries, especially in developing countries, becoming a focus of policy of the national economy. In the process, capacity present, for communities and households, to meet education and health needs is weakened seriously with the threat of being totally destroyed (Elson, 2010: p351). No matter the benefits of the achievements and aims, the effects of this increased importance in these public services makes women more dependent on earnings by their male counterparts and make them more vulnerable to macroeconomic policy. In addition, since these services are regarded, conventionally as unproductive economically they are funded, often, as residual national budgets with national allocations being variable. This is especially so in the environment policy of structural adjustment, as well as external pressure. Governments, under economic pressure, could summarily withdraw the services on which women are now dependent and do not offer a viable alternative (Elson, 2010: p351). In most countries, especially developing countries that are under regimes with policies that are under structural stabilization and adjustment, which are externally imposed, macroeconomic policy tools tend to decrease access to basic services and goods by women (Elson, 2010: p352). This is caused by two factors. First, expenditure in most countries is gender differentiated with women spending the money that they control on health and food. Men, on the other hand, spend most of their money on consumer durables and non-food consumer goods. Policies that lead to the reduction of subsistence production and, in effect, cash income to women, even though the male income received is upped by an amount equivalent to it tends to reduce the expenditure in the household on education, health, and food. In a study, for instance, the nutritional status for young children was directly proportional to increases in cash income directly under women’s control, although it had no correlation to fluctuations in paternal income (Elson, 2010: p352). The second reason why access to basic commodities for women is reduced comes from the idea that women consume the majority of the social services (Elson, 2010: p353). Because of this, reduction in the provision of the social services has a significant effect on them, especially in education and health. Contrastingly, policies that seek to promote the production of commodities for trade, especially exported commodities, significantly favor male dominated sectors. The resulting redistribution, both inter-house and intra-house, of cash income and, in turn, purchasing power, seriously impairs household capacity for women to meet basic needs (Elson, 2010: p353). Macroeconomic policy and its impact have become increasingly exacerbated by an increased reliance on markets, which has been a fundamental characteristic of macroeconomic policies from the mid 1980s. The conditions that prevail in a significantly unequal developing world, coupled to the market’s unfettered operation, tend to intensify disadvantage and reward comparatively advantage. This, in turn, cause further erosion of the welfare of the most disadvantaged who, in this case, are the women. Alternative Approaches to Engender Economic Policy Making In the last decade or so, there has been increasing concern in most developing, as well as developed countries that fund them, to see the dimension of gender as an essential part of social equity goals in the social domain, as well as in economic and labor policies (Gutierrez, 2011: p103). Ministries of labor are increasingly adopting particular programs and policies that seek to promote equal opportunities between men and women. Various set ups have departments for women affairs inside the ministry, as well as establishing agreements of cooperation with national mechanisms for women advancement. Committees or departments for women have been put up in federations of labor unions as more business organizations and associations with these types of commissions adopting policies that further equal opportunities (Gutierrez, 2011: p103). In addition, academic institutions and social organizations have bee drawing attention to exclusion and discrimination that women are put through in the economic and labor domains while lobbying for the reversal of this situations and proposals made on concrete measures meant to reach this end. National mechanisms, against this backdrop, are established in most of these countries for the promotion of public policies, which are meant to generate equitable benefits and opportunities for women (Gutierrez, 2011: p104). There is also increasing attention paid to economic issues and the labor market. Various commitments can be made to this end. These include the redirection of public policies, placing of gender and social equity at the center of concerns by the government, and achievement of this is via systematic basing of policy on the assessment of their impact, differentially, on women and men, as well as monitoring of their implementation (Gutierrez, 2011: p105). There could also be promotion of socio-economic policies that seek to foster sustainable development and growth with equality and equity to combat intergenerational poverty transmission via the allocation, redistribution, as well as the increase, of resources. Governments could also take positive steps in seeking to overcome negative effects that result from trade liberalization and globalization, as well as ensuring fair and equal access to their opportunities and benefits. In addition, they can develop strategies for the creation of more and better working opportunities for women and equitable social protection systems (Gutierrez, 2011: p105). Finally, governments could seek to promote recognition of economic and social contribution of work that is unpaid performed by the women, especially in the home while urging the governments to provide women with social security coverage. This concern aimed at the institutionalization of a gender perspective in macroeconomic policymaking, appears to come at a time when there are widespread calls for; social organizations, public institutions, and productive systems to be made less bureaucratic, costly, and complex. Furthermore, it is becoming more effective and democratic in the fulfillment of their mandates during the pursuit of general wellbeing of both women and men (Jennings, 2009: p557). The arguments that are in favor of human rights respect and social justice in a comprehensive framework development are strengthened by productivity and efficiency arguments. Arguments on efficiency show that systems of production are increasingly dependent on the female labor force; some sectors are now reliant on employment that is female waged. There is also increasing awareness that the entire economic system of a country relies, ultimately, on the unpaid work done in care services that, although undervalued in an economic sense, possess high aggregate social value (Jennings, 2009: p557). Conclusion Mainstreaming of macroeconomic policy has its basis on the fundamental principle that individuals as beneficiaries and inputs are vital in the successful development. However, planners and policy makers need to recognize that individuals in an economy are not homogenous. These people are individuals with personal attributes like location, culture, language, ability, physical appearance, and, especially, gender. These individuals have differences that affect the way that they are affected by various macroeconomic policies and are able to participate in programs. The most significant and universal individual difference affecting impact of policy, as well as access to programs, is gender. Thus, planners and policy makers must ensure they account for the gender dimension if both men and women are equal participants in gaining an equal share of national development benefits. References Chant, S., 2006. Re-thinking the ‘‘Feminization of Poverty’’ in. Journal of Human Development, 201-220. Elson, D., 2011. Gender-aware analysis and development economics . Journal of International Development , 237–247. Elson, D., 2010. The Social Content of Macroeconomic Policies. World Development , 347-1364. Gutierrez, M., 2011. Macro-economics : making gender matter : concepts, policies and institutional change in developing countries. London : Zed Books. Jennings, A., 2009. Toward a Feminist Expansion of Macroeconomics: Money Matters. Journal of Economic Issues , 555-565. Seguino, S., 2010. Gender Inequality and Economic Growth: A Cross-Country Analysis. World Development , 1211–1230. Read More