Gender and Macroeconomic Policy
This volume, a compilation of lecture notes first published on the Poverty and Growth blog of the World Bank Institute in 2008–09, is an introduction to the subject of engendering macroeconomics. It aims to show how macroeconomic policies create differential opportunities for women and men. The discussion is deliberately nontechnical. Theoretical discussions and empirical evidence are brought together to give readers—policy analysts, representatives of donor agencies, and civil society organizations—a clear picture of the impact of gender relations on macroeconomic policy.
The volume comprises nine chapters covering four broad themes: gender as a category of analysis in macroeconomics; the implications of gender for macroeconomic aggregates, in particular consumption and economic growth; the role of gender in the labor market, globalization, and access to credit; and gender budgeting. Chapters 1 and 2 address the first theme. Chapter 1 focuses on the macroeconomic cost to growth and development that arises from rigid gender roles and associated gender asymmetries. Chapter 2 documents the progress made in gender mainstreaming by highlighting developments in data collection and monitoring that have moved beyond simply disaggregating data by male and female.
Chapters 3 and 4 cover the second theme. Chapter 3 considers the role of gender relations in the macroeconomic aggregates of consumption, Prefacesavings, investment, and government expenditure and the implications for macroeconomic policy in these areas. Chapter 4 examines gender relations and economic growth.
Chapters 5 through 7 focus on the third theme. Chapter 5 examines the labor market (the literature is less rich for the other factor markets but is referenced throughout the volume where applicable). It also examines progress toward Millennium Development Goal (MDG) 3 and schooling issues. Chapter 6 examines how globalization affects gender relations, particularly employment. Chapter 7 concentrates on women's access to finance and documents gender asymmetries in this market.
Chapter 8, on the fourth theme, highlights the impact fiscal policies have on gender relations. It documents how policy can be made more gender specific and reports on the progress made by countries that have adopted gender-responsive government budgeting. Chapter 9 summarizes what is known about gender and macroeconomic policy, noting areas in which the literature is well developed as well as areas that require further research and study.
The lecture notes benefited from input from Laurence Clark, Pierella Paci, and G. Swamy. The financial contribution from the government of the Republic of Korea in the preparation of these notes is greatly appreciated.
Introduction
Mainstream economic analysis has traditionally overlooked gender. The individual—the basic category of analysis—was regarded as genderless. Neither gender discrimination nor segmentation and segregation within the labor market or the household were present.
Contributions from development theory, new household economics (NHE), labor economics, and feminist analysis have done much to change this. Focusing on gender equality—by which we mean equality in opportunity, inputs, and outcome—has yielded important insights for the growth and development of an economy. But we are still at the cusp. Although there have been huge improvements in recognizing gender as an analytical category at the microeconomic level, the macroeconomic implications of gender equality remain undeveloped.
“Engendering” macroeconomics is an important and valid research and policy area. Over the past three decades, economic development has generally affected women and men differently in the developing world. At the same time, gender relations have affected macroeconomic outcomes. This volume examines the research and policy implications of engendering macroeconomic policy. Engendering macroeconomic policy requires a deep understanding of gender equality and what it means for economic analysis at the macro level.
Chapter 1 begins with an overview of how gender—specifically, gender equality of opportunity—came to occupy an analytical category in economics. Following this overview is evidence of the significant economic and social costs to economic growth and development that arise from rigid gender roles and associated gender asymmetries. Most of the studies are from a microeconomic perspective, but the chapter draws out the implications for macroeconomics. Gender inequalities in education, health, and political representation are addressed, as are the adverse welfare effects of structural adjustment policies, which are borne primarily by women in the developing world.
Chapter 2 discusses the importance of generating appropriate data, tools, statistics, and models to assess the impact of gender relations on macroeconomic policy and vice versa. In particular, key issues of gender mainstreaming are addressed. Gender mainstreaming refers to the process of assessing the implications for women and men of all planned actions, including legislation, policies, and programs, in all areas and at all levels. Databases measuring gender equity—a recent innovation—are described and explained, and a section on the macroeconomic modeling of gender relations identifies the key ways in which models are useful for organizing knowledge and giving direction to research. The chapter concludes by noting that the approach to measuring gender has moved beyond simply disaggregating socioeconomic data on men and women to the development of databases that examine key gender issues such as participation in decision making, gender attitudes, elections, entrepreneurship, domestic violence, poverty, informal employment, time use, and school attendance.
Chapter 3 considers how behavioral outcomes based on gender have implications for key macroeconomic aggregates such as consumption, savings, investment, and government expenditure. Analysis is constrained by the lack of studies, most of which have been in the area of consumption and in the microeconomic context of the household. Nonetheless, macroeconomic conclusions can be drawn from this evidence. Research points to strong differences in gender relations and macroeconomic outcomes in developing economies. In particular, the discussion indicates that policies that improve women's control of household spending in developing economies should strengthen growth and reduce poverty.
Chapter 4 examines gender relations and economic growth. Studies cited in the chapter attest to the strong correlation between measures of gender equality and economic growth. Equality of opportunity in education, health, economics, marriage, and representation in parliament are all positively linked to economic growth. Moving beyond simple correlations, 2 Gender and Macroeconomic Policythe chapter examines models of economic growth that incorporate these positive indicators for gender equality, noting that it is difficult to fully isolate the effect of gender equality on economic growth. The theoretical literature on growth and equality is reviewed from a range of perspectives, including the modernization/neoclassical approach, endogenous growth theory, the women in development approach (WID), and the gender and development approach (GAD, also known as critical feminism). The chapter concludes with a brief overview of the studies that examine the effects of economic growth and gender inequality, bringing together the conclusions of theoretical approaches from growth and feminist literature.
Chapter 5 examines gender inequality in the labor market. It looks at reasons for this inequality, including specialization, segmentation, women's reproductive roles, and wage gaps. Indicators of labor market performance by sex—labor force participation rates, unemployment rates, wage rates, and skills—are examined, as are data relating to employment by sector and status of employment. The evidence suggests a mixed story and needs to be interpreted with reference to other indicators of labor market performance, such as the increases of young women in education and older women in the labor force. The chapter finds that regional patterns are even less conclusive. It also examines the progress being made toward Millennium Development Goal 3 by considering school enrollment for boys and girls.
Chapter 6 examines some of the broad themes of globalization and its implications for women, particularly in the labor market. Trade liberalization introduces new, mostly positive prospects for women and the work they do, but gender asymmetries continue, especially with regard to wages. The impact of the recent financial crisis on employment prospects for women is also discussed.
Chapter 7 examines women's access to finance and the gender asymmetries that characterize the financial market at the level of small businesses. The literature in this area is sparse, but a number of studies at the level of the household have looked at the issue of women's access to finance and what it means for employment prospects and decision making within the household. The results from these studies may be extrapolated to inform macroeconomic policy. Microcredit, an area in which women have been targeted, is discussed.
Chapter 8 addresses gender budgeting. Making government budgeting more responsive to gender equality goals is a critical facet of gender mainstreaming. In this chapter gender budgeting initiatives are examined from Introduction 3the expenditure side and, to a lesser extent, the revenue side. The chapter ends with an analysis of countries' experiences with gender budgeting initiatives.
Chapter 9 brings together the four themes of engendering macroeconomics and macro policy developed in the text. Gaps in the literature and data prevent us from giving a full picture of the relationship between gender and macroeconomics—but they point the way forward for further research.