Gendering Macroeconomics: The Challenge of Promoting Gender Equality - Term Paper Example

Gendering Macroeconomics: The Challenge of Promoting Gender Equality Term Paper Introduction From the latter part of the 1980s economic scholars engaged in a gender-specific critical point of view have generated large volumes of work that analytically examines macroeconomic theory and practice, its policy implications, and its gender-specific effects. A large part of the literature on gender equality and macroeconomics belongs to broader attempt to build “a more humane economics centered around the provisioning of human needs rather than around the notions of scarcity, efficiency and maximization of economic growth without a human purpose” (Gutierrez, 2003, 3). There is currently a massive number of empirical findings and theoretical explanations that show major connections between gender inequalities and too much time demands or pressure on women and opportunities for economic development. This paper analyzes gender inequality in macroeconomics, particularly in relation to the concept of ‘social reproduction’ and ‘gender budgeting’. This paper argues that a gender-sensitive macroeconomic policy is possible only if social reproduction and gender budgeting are taken into serious consideration. Overview Specifically, gender inequalities are viewed to be not just adverse for women, but also restraints to growth and progress. As stated by Elson and colleagues (1997), “Constraints can be seen as hampering the smooth interaction of the different dimensions of the economy, creating disabling rather than enabling environments, and preventing the outcome of the international and national policy and of individual decisions adding up to sustainable, well balanced development” (as cited in Gutierrez, 2003, 4). In 1993, the World Bank highlights women’s time-consuming and burdensome workload, “the significance of which is that women’s labor time is highly inelastic and that female labor availability (whether for economic activities or for community-based mobilization for self-help schemes) requires explicit assessment of the opportunity costs involved… This is especially the case in reference to agriculture” (as cited in Gutierrez, 2003, 4). The overuse of women’s labor is not the only problem; the rigid gender-based labor divisions imply that there is almost no elasticity as regards the interchangeability of female and male work. Besides the restrictions that emerge from the micro-level labor division, access to resources and allocation of time loads within farms, companies, or households, there is an institutional and social domain to such gendered limitations (Berik et al., 2012). This becomes obvious with the study of the economy’s meso domain, which intercedes between the macro and the micro. The meso is made up of social rules, including physical and social substructure and groups of micro entities in goods, labor markets, and trade unions (Berik et al., 2012). At the meso arena, gender discrimination and inequalities in goods, credit, and labor markets have been reported to have harmed the economy in general in the form of retarded economic development, unproductivity, and unequal distribution of resources. For example, studies in Latin America reported that gender-based imbalance in the labor market has disadvantaged female workers in terms of smaller salaries, but also of national productivity, which would be higher if gender disparities were decreased and the wage rates of female workers were higher (Nallari & Griffith, 2011). Gender at the macro domain is harder to theorize or explain. Macroeconomics is generally defined in relation to the gross national product (GNP). Because macroeconomics is interested in nonconcrete aggregates, not individuals, and definitely not gender, how can gender equality be promoted in the field? There are two major models of presenting gender at the macro domain, which represent two widely distinct perspectives. The first model supports a specific interpretation of the macro-economy as basically individualistic, derived from the neoclassical ideas of the ‘economic man’ or the model of the rational decision-maker. This model places emphasis on the argument that individuals exercise maximizing, rational decisions (Berik et al., 2012, 98). The second model argues that macroeconomic factors are most ideally recognized through an examination of the connections between aggregates (e.g. production, interest rates, savings, investment) and not by means of totaling the actions of all companies, households, and individuals. This model supports a structural point of view and demonstrates how macro-economic theory and practice can be gender-specific, without bringing up issues between women and men. This modelfocuses on economic systems and views macro-economics as gendered (Stotsky, 2006). It is the structural approaches, like this second model, that view gender as a social institution that provide the most useful systematic input to making macroeconomics gender-sensitive. Viewing gender as a social institution depends crucially on considering social reproduction in the study of macro-economy. Gender and Social Reproduction Picchio (1992) observed that “The significance of social reproduction as a foundation block of the classical analytical framework is almost completely lost today” (p. 14). He evaluates the contemporary macroeconomics against the classical political economy model. In the latter, the market economy and social reproduction were connected through the notion of living wage; hence wages were thought to be strongly associated with the outcomes of social reproduction. In contemporary economic models, wages are seen as price rates basically determined by demand and supply without consideration of social reproduction (Picchio, 1992). Separating the concept of wage from social reproduction has suggested that the process and outcomes of social mechanism, and especially its role in building and sustaining the labor force, were irrelevant to the field of economic analysis (Peck, 1996). Therefore, removing social reproduction from the field of economic analysis is adverse disadvantageous to the goal of making macroeconomics gender-sensitive. With the elimination of the domain of social reproduction from contemporary economic study, all the mechanisms related to the creation of the labor force are considered ‘exogenous’, as though labor emerged out of nowhere rather than through the effort and attention of, mostly, women (Gutierrez, 2003). Hence present attempts to make macroeconomic frameworks gender-sensitive view labor as ‘endogenous’, which implies that the creation of labor has to be interpreted within the framework and not merely believed to be real (Gutierrez, 2003). Contemporary macroeconomics has a lower responsiveness to gender analysis compared to its classical antecedents due to the nonexistence of social reproduction from their systematic approaches. This split between social reproduction and the economy brings about and strengthens gender discrimination and inequality in macroeconomics (Berik et al., 2012). The concept of social reproduction is used to define the effort and time needed to build the future workforce and to sustain the welfare and security of the individuals in households and communities. Social reproduction is dominated by women; males occupy a much smaller part in social reproduction than do females and this is a universal fact. In reality the exact nature of the processes of social reproductions is determined by the cultural and socioeconomic setting. It could involve, for example, the energy and time gathering the essentials for household use; the energy and time used in transportation; and the time used in biological reproduction. Traditional economics usually mistakes social reproduction with leisure became time used in free or voluntary work is considered nonworking time (Nallari & Griffith, 2011). Although the system of National Accounts does not classify it as ‘work’, it definitely has the features of work such as it consumers a huge amount of effort, energy, and time, particularly that of females (Nallari & Griffith, 2011, 25). It is a duty that has sacrifices and outcomes with regard to effort and time. Even though it is not salaried, it is crucial for the perpetuation or continued existence of the whole society. Nevertheless, it must be emphasized that the ‘incentives’ for social reproduction are obviously quite distinct from those that exist and function in the market economy. Even though the results of social reproduction could have economic value, the motivations for giving care cannot be interpreted merely as economic rational behavior (Gutierrez, 2003). The totality of these actions is mentioned in a variety of ways such as ‘unpaid domestic economy’ or ‘reproductive economy’ (Nallari & Griffith, 2011, 25). But it is more popularly known as social reproduction. Social reproduction activities are not usually taken into consideration in official figures or measurements. Creating a statistical file for social reproduction can help widen the range of the policy structure with regard to planning, implementation, and assessment. This needs certain skills sets, resources, time and especially assurance and dedication from major policymakers. It is an essential but feasible program for reinforcing the information basis for more gender-responsive macroeconomics. More challenging and complicate restrictions to making macroeconomic theory and practice gender-sensitive are situated in the analytical weaknesses of contemporary macroeconomics. The key to integrating the ideas of gender study into macroeconomics is to know and integrate into the policy and analytical structure the relationship between social reproduction and production. Traditionally, in almost all parts of the globe, gendered processes of social reproduction and production imply that social reproduction has turned out to be largely the obligation or domain of women. Even though women have constantly functioned or served in both social reproduction and production activities, in industrialized situations, salaried and unsalaried work are normally carried out in physically different locations and put considerable pressure on women engaged in both (Peck, 1996). Before women are capable of taking part in paid work, their unremunerated domestic duties should be performed, while men do not confront such limitations or demands. Hence, with the expansion and industrialization of the market, the issues of organizing reproduction and production do not cease to exist (Gutierrez, 2003). In fact, the split between reproduction and production is still bringing about major changes in the lives of women. Nevertheless, over all, what actually disappeared with such split was any regard for these issues in the field of macroeconomic research. This split creates two kinds of anxieties or uncertainties for women—they become more reliant on the income of their father, brother, or husband; and once they do participate in the labor market, their salaries are lower than the wages of their male counterparts (Stotsky, 2006). Hence since women replenish the labor force not merely do they toil more, they are compensated less as well. The historical research of Picchio (1992) explains how the division between social reproduction and production has transferred the duty of care from those who manage and own for-profit ventures and provide compensations to those who are tasked to nurture and care for the people in the household, mostly women. As stated by Adam Smith, “a well fed and well clothed, high waged worker costs his employer less than a badly fed, poorly clothed slave” (Gutierrez, 2003, 15). Yet the question is who nurtures and cares for the laborer? It is mostly women’s service in social reproduction that fulfills the needs of reproducing and sustaining the labor force. Hence, an important matter for gender study at the macro level is to identify the economic repercussions of such and to apply or integrate these ideas into the policy arena. Specifically, it implies formally establishing in economic study and policy structures what is already obvious—women’s social reproductive duties do not only furnish or provide for communities and households, but cultivates the productive economy. As argued by Picchio, “while wages are cost of production, housework as unpaid labor is a deduction from costs… the surplus is realized by capitalists not in selling labor but in buying it” (Peck, 1996, 37). The investigation of Elson of the relationship between the salaried and unsalaried works discovers that “unpaid labor plays an important role in processes of macroeconomic adjustment of the paid economy; and ought not to be neglected in decisions about macroeconomic strategy” (Gutierrez, 2003, 15). The emphasis is not only on enhancing or raising the value of unpaid work, but on examining the relationships between social reproduction and production. Elson and colleagues (1997) claims that the mechanisms of structural adjustment can be more accurately grasped by studying the interplay of paid and unpaid work in aggregate Unsalaried work can moderate the blows of economic changes, but this could further pressure and burden those giving unpaid work, usually females, and this greater demands are expected to have an unfavorable response with regard to the economy’s capability to adapt successfully and to redirect the economy toward a continuous, stable growth track. The major negative response outcomes are restraints on labor availability for the market economy, confining adjustment to emerging price incentives; insecurity or uncertainty harming the capacity of a society to sustain itself, and hence obtain new capabilities for economic development; and overworking the community and family systems, which results in social collapse (World Bank, 1993). Gender Budgeting In the 1980s, gender equality became a focus or aim of government budgeting. The new focus of the government on gender equality, widely referred to as ‘gender mainstreaming’, makes sure that the objective of gender equality remains at the core of all operations, resource distribution, policymaking, discourse, research, policy planning, implementation, and evaluation (Sarraf, 2003). As the description suggests, gender mainstreaming does not only focuses on distribution of resources to gendered activities or programs under a government agency devoted to women’s issues. It means a cluster of analytical instruments and policy rules that every government office can use to create workable gender-sensitive policies (Sarraf, 2003). As claimed by Stotsky (2006), “To be more useful, gender budgeting should be integrated into gender budget processes in a way that generates tangible improvements in policy outcomes” (Nallari & Griffith, 2011, 139). Worldwide gender mainstreaming was facilitated by the 1995 Fourth World Conference on Women in Beijing by demanding an incorporation of a gender framework in budgetary projects and policies (Nallari & Griffith, 2011). From then on, scholars and different NGOs and civil groups, particular women’s associations, have attempted to affect and gain advocacy for gender mainstreaming in government budgeting. Consequently, multilateral groups and national governments have started to endorse budgetary techniques called ‘gender-responsive government budgeting’ (GRGB) (Nallari & Griffith, 2011, 139). Gender mainstreaming facilitates inclusive gender budgeting that surpasses projects particularly developed to deal with women. Elson (2002) characterizes government budgets as gender biased, having varied impact on men and women. Elson believes that GRGB “does not aim to produce a separate budget for women. Instead it aims to analyze any form of public expenditure, identifying implications and impacts for women and girls as compared to men and boys. The key question is: what impact does this fiscal measure have on gender equality? Does it reduce gender equality; increase it; or leave it unchanged?” (as cited in Sarraf, 2003, 6). On the other hand, Sarraf (2003) defines GRGB as a “series of additional and analytical instruments [that help] one to understand and make a judgment on the impact of government budget programs in reducing the gender gap, thereby helping gender mainstreaming and ultimately gender equality” (p. 8). The value or necessity of GRGB is apparent, specifically, continuous gender disparity in the labor market; the impact on household expenditures; and the macroeconomic outcomes of gender inequality, like more fragile economic standing and poorer growth. Thurow (1971) demonstrates that the incentive to deal with externalities can include productivity and parity concerns. Public intervention could be acceptable or necessary if society progresses to a more equal income allocation or welfare (as cited in Nallari & Griffith, 2011, 140). If gender equality leads to a fairer society, even devoid of economic progress, public intervention could be defensible. However, selecting proper or correct interventions can be challenging. Choices involve higher spending, subsidies, law amendments, and new taxes, all of which have impact of fiscal policy. According to Stotsky (2006), “Governments can subsidize private activities that raise the status of women or reduce gender inequalities, or they can provide such services themselves, depending on the extent of the externality” (p. 14). Governments, for instance, can support women’s education and health care or financially support private subsistence. Stotsky gives two theoretical cases of gender analysis in a government budget that openly deal with the policy’s gender aspect, the performance measures, the resources required, and the techniques of implementation. Take into consideration the sample goal of ‘expand primary education’ (Nallari & Griffith, 2011, 142). The framework of GRGB questions the idea that an enlargement in primary education will be allocated similarly or fairly across population. A gender-sensitive financial plan thus acts in response to the imbalances in primary education for girls. Gender budgeting must be a component of the economy’s macrofiscal structure, and its microeconomic aspects must include revenues and expenditure. Gender budgeting’s macrofiscal feature must deal with the impact of gender disparity on economic security and its implications for the financial and labor markets. GRGB, at the microeconomic stage, includes revenues and expenditures (Sarraf, 2003). For instance, higher expenditure on health and education projects could encourage gender equality. Furthermore, Stotsky (2006) proposes that “gender budgeting might have advice to offer on the means of financing a deficit, the use of public assets, or the division of responsibilities among different levels of government” (p. 16). Policy Implications Even though there has been significant developments in making macroeconomics more responsive or sensitive to the issue of gender, this effort has started to influence economic policymaking only in recent years. The attempts of a large number of gender advocates in the field of social development and economics have encouraged and sped up the transformation of macroeconomics into a gender-sensitive field. This progress is clearly revealed in the fact that UN agencies and bilateral organizations have now paid attention of the effect of various factors on economic progress and development, such as education, health, and social welfare (Gutierrez, 2003). In spite of these encouraging advances in the policy arena, it remains seldom understood that the well-being, education, and health of communities and families are not only outcomes of health and education organizations in the private and public domains, but are also outcomes of women’s labor in social reproduction. Also, although numerous multilateral and governmental institutions now stress the value of human abilities as an integral element of social and economic change, there remains practically no recognition that “unpaid labor in the household and in the community is a vital ingredient in the transformation… and for the most part, people do not simply acquire inputs through the market and transform themselves into labor power, we all rely to some extent on the unpaid labor of others to cook, clear and care for us and create the social framework of daily life” (Gutierrez, 2003, 16). The theoretical basis for the new gender-sensitive models of macroeconomics can be summed up into three major ideas. First, even though social institutions may not be originally gender-sensitive, they still contribute to the perpetuation and strengthening of gender stereotypes. Free markets, which are largely influenced by social forces, are also largely characterized by gender inequalities. Second, the cost of sustaining and reproducing the labor force remains vital although the most economic activities do not involve unpaid ‘reproductive’ work. Unpaid labor thus has to be taken into account and the economic definition of labor or work should be adjusted to include important unpaid labor, such as those associated with social reproduction (Berik et al., 2012, 89). And third, gender plays an important role in the division of work and the allocation of resources, labor, and productive goods. This suggests as well that economic activities or behavior is gender biased. A fundamental principle of economic policymaking includes the premise that policies must approach problems at their roots, instead of tackling their symptoms. Different macroeconomic issues arise from gender inequalities at the meso and micro domains. Hence enduring and stable solutions can be attained only if such inequalities are removed at their roots (Nallari & Griffith, 2011). Building an environment of equality in allocating reproductive obligations and power in the household; granting women equal opportunity to career growth, education, and economic resources; abolishing cultural, institutional, and legal obstacles that discourage or degrade women’s involvement in economic processes and political activities are simply some of the examples of the goals long-term policies have to focus on at the micro and meso arenas. Nevertheless, this does not suggest that macroeconomic policies do not have to be or unable to be gender-sensitive. It should be acknowledged that the conventional macroeconomic policies that are believed to be gender-objective are actually gender-insensitive, for they have obviously distinguishable gender-unequal impact at the meso and micro domains (Stotsky, 2006). Fiscal policy, as shown in the discussion about gender budgeting, is a perfect case of how macroeconomic policies can and should be monitored in relation to their gender impact. In highly diverse countries like South Africa, Australia, the UK, and Canada, women’s financial plans or budgets have been formed as part of macroeconomic policymaking. They are implemented to assess and examine national spending and budgets to identify which groups or populations gain from fiscal policies and whether gender prejudices are incorporated into them (Gutierrez, 2003). In such attempts, the primary goal has been to transform macroeconomic policy into one that is sensitive to the needs and demands of the marginalized groups. Conclusions Gender differences, inequalities, and gendered practices in behavior and decision making are very important to the topic of macroeconomics. Hence, the challenge for decision makers is to strengthen efforts to include social reproduction and other unpaid ‘reproductive’ work to the policy and theoretical structures of macroeconomics. This paper supports the requirement for greater and improved gender-based information base, for enhanced systematic models and ideas that consider the economic value of gender relations and gendered systems for macroeconomic policymaking. However, this has to be supplemented or reinforced by the active involvement of women and the expression of women’s issues and the importance of social reproduction in macroeconomic policymaking so as to create a more people-oriented macroeconomic system. Moreover, it is essential for the government and the public to be engaged in the process of gender budgeting. The government can make efforts to apply gender analysis guidelines in budgeting whereas advocates from the larger community can persuade or pressure the government to take into consideration the advantages and value of gender equality. The public can also persuade the government to ensure that gendered information is accessible to them. Budgets affect all individuals and groups hence everybody must be given the opportunity to take part in their development. References Berik, G. et al. (2012). Social Justice and Gender Equality: Rethinking Development Strategies and Macroeconomic Policies. London: Routledge. Elson, D. et al. (1997). Gender Aware Country Economic Reports, Concepts and Sources; Uganda, Nicaragua and Pakistan, University of Manchester Graduate School of Social Sciences, Genecon Unit, Working Papers Nos. 1-4. Gutierrez, M. (2003). Macroeconomics: Making Gender Matter: Concepts, Policies, and Institutional Change in Developing Countries. New York: Zed Books. Nallari, R. & Griffith, B. (2011). Gender and Macroeconomic Policy. Washington, DC: World Bank Publications. Peck, J. (1996). Workplace: The Social Regulation of Labor Markets. New York: Guilford Press. Picchio, A. (1992). Social Reproduction: The Political Economy of the Labor Market. Cambridge, UK: Cambridge University Press. Sarraf, F. (2003). Gender-Responsive Government Budgeting. Washington, DC: International Monetary Fund. Stotsky, J. (2006). Gender and Its Relevance to Macroeconomic Policy: A Survey. IMF Working Paper. Washington, DC: International Monetary Fund. Thurow, L. (1971). The Income Distribution as a Pure Public Good. Quarterly Journal of Economics, 85(2), 327-36. World Bank (1993). Uganda: Growing Out of Poverty. Washington, DC: World Bank. Read More