Gender policy and female employment: a CGE model for Italy

ABSTRACT

The gender integration in all areas of policy choices and at all stages of the decision-making process is strongly recommended by the European Union and represents an achievement that the Member States should accomplish when implementing policy measures. In a country like Italy, where the level of female labour participation is among the lowest in Europe, policy maker decisions should encourage and stimulate the demand for female labour without neglecting the global employment rate and income growth. The multisectoral analysis offers the possibility to bridge gender disaggregation within income formation and distribution from the production phase to the demand formation. In this perspective, this paper develops a gender-aware CGE model based on the gender-aware SAM for the Italian economy to evaluate the impact of different fiscal policies aimed to reduce female labour cost and trigger woman hiring in those sectors with high gender disparity.

KEYWORDS:

• Female employment
• gender inequalities
• social policies
• social accounting matrix
• CGE analysis

JEL CLASSIFICATIONS:

• C63
• C68
• D57
• D58
• E16
• E24
• J16

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 After inclusion of the new title ‘Employment’ in the Treaty on EU, the Heads of State and Government launched an EES at the Luxembourg Jobs Summit with a view to coordinate national employment policies.

2 The Lisbon strategy has not produced the desired results particularly after the international financial crisis in 2008 followed by the explosion of the economic crisis of 2009, still in progress, with its serious repercussions on the labour markets. The Lisbon strategy had defined quantitative targets in terms of female employment rate (60% by 2010) and childhood care services for children under the age of three (with a coverage rate of 33% by 2010), which have not been achieved in several countries. The pace of growth is hard to gather, unemployment has returned and exceeds 10%, while many countries have implemented strong restrictive measures to rebalance their public finances (European Commission, 2010).

3 SocialCohesion.Stat is a warehouse of statistics regarding social cohesion produced by the National Social Security Institute (Inps), the Italian National Institute of Statistics and the Ministry of Labor and Social Policy. It collects more than 700 indicators on crucial aspects of Italian society such as population dynamic, labour market, human capital, poverty, social security and income support, active labour market policies.

4 ‘Survey of Household Income and Wealth 2012’ that covers 8151 Households composed of 20,022 individuals, about which 48.3% are men and 51.6% are women.

5 In CGE modelling, several studies focused on analysing the labour market under different points of view. On one hand, from a direct point of view, by analysing the changes in the internal market rules (social security and labour taxation policies) (Dewatripont et al., 1991; Gelauff et al., 1991; Sorenson, 1997; Hutton and Ruocco, 1999; Bovenberg et al., 2000; Bohringer et al., 2005; Agenor et al., 2007), and on the other hand, by studying the indirect effects that economic measures (fiscal, trade liberalisation, energy and climate policies), albeit not directly related to the labour market, may have on it (De Melo and Tarr, 1992; Herault, 2007; Bourguignon and Savard, 2008; Bussolo et al., 2008; Ferreira et al., 2008; Robilliard et al., 2008; Ballard et al., 2009; Fraser and Waschik, 2010).

6 In particular, the use of CES functions in CGE models is mainly due to the mathematic characteristics of regularity that ensure an easier analytic treatment. Furthermore this kind of function is flexible enough to characterise a series of different economic behaviours (Bohringer et al., 2003), and it allows us to calibrate the model directly on benchmark deviations (Rutherford, 2002; Klump and Saam, 2008; Sancho, 2009).

7 Workers are supposed to be all represented by Unions that behave as monopolists in the labour market (Pissarides, 1998).

8 When we mention ‘Households’, we simultaneously refer to male- and female-headed Households.

9 Similar measures are included in the Labour Reform Law (Law n. 92/2012) and consider the reduction by 50% of the employers’ social contributions in relation to the recruitment with employment contract workers that belong to the categories with a higher risk of exclusion from the labour market.

10 (EU) n. 651/2012.