Feminist Economics of Inequality, Development, and Growth

Abstract

This study examines connections between intergroup inequality and macroeconomic outcomes, considering various channels through which gender, growth, and development interact. It upholds the salience not only of equality in opportunities but also equality in outcomes. The contribution argues that inequalities based on gender, race, ethnicity, and class undermine the ability to provision and expand capabilities, and it examines the macroeconomic policies that are likely to promote broadly shared development. It explores how the macroeconomy acts as a structure of constraint in achieving gender equality and in turn how gender relations in areas like education and wage gaps can have macro-level impacts. Further, it underscores that the interaction of the macroeconomy and gender relations depends on the structure of the economy, the nature of job segregation, the particular measure of gender inequality, and a country's international relations. Finally, it outlines policies for promoting gender equality as both an intrinsic goal and a step toward improving well-being.

Keywords:

• Development
• growth
• inequality
• gender
• macroeconomic policy
• feminist economics
• JEL CODES: 04, J3, E0, B54, D30

Notes

Authors are listed in alphabetical order. Each author contributed equally to this project.

Some scholars have reservations about the statistical significance of the results and argue that it is too early to confirm this trend (Sudhir Anand and Paul Segal 2008). The World Bank (2006), which distinguishes among three types of inequality, concurs that inter-country inequality has risen since 1980 but reports that global inequality (assessed for the 1993–2000 period only) has not changed much, and international inequality (taking country population size, and therefore the rise in average incomes in China and India, into account) has declined.

Thus, we share the methodological premises of the emerging social provisioning perspective in feminist economics (Power 2004). This perspective broadens the longstanding concern of feminist economists with gender inequality to include attention to multiple forms of inequality. It also emphasizes attention to unpaid domestic and caring work as integral parts of the economic system and insists on judging the success of economic policies by their ability to promote human well-being. As such, the focus of economic analysis changes from individual pursuit of financial gains and competition toward social provisioning through cooperation.

Using simulation exercises, Dağdeviren, van der Hoeven, and Weeks (2004) show that redistribution of current income rather than distribution-neutral economic growth is the most effective means for poverty reduction in all but the very low-income economies. Redistribution with growth is the second best alternative.

Our interest in the nature of growth includes both the composition of output and the technologies of production. We believe that in both low- and high-income countries environmental sustainability should be integral to the goal of expanding availabilities. We are concerned about the pursuit of growth at any cost through dismantling, or not putting in place, environmental regulations since this strategy undermines livelihoods and capabilities.

Elson (2009) points out that the WDR2006 downplays gender wage inequality as a problem, as it views the expansion of women's employment opportunities in export manufacturing as a solution to gender inequality.

While human capital theory integrates unpaid work into its analysis of labor market inequalities, it regards women's care responsibilities as a matter of choice. See Michael Levin (1984) for an argument that dismisses the feminist concern with unequal labor market outcomes on this basis and rules out any policy measures beyond creating the legal equal opportunity for employment.

Elson (2009) contends that while WDR2006 argues in favor of gender equity, its analysis of the persistence of inequality of opportunity and therefore its solution to gender inequality is flawed. Specifically, she argues that it fails to acknowledge women's unpaid work as a constraint on equality of opportunity and does not recognize that gender inequality often underpins economic growth. Moreover, she demonstrates that the WDR2006 is not an entirely coherent document. Even as it continues to advocate liberalization and privatization, it acknowledges that in many countries powerful groups have controlled the course and reaped the benefits of liberalization and privatization – the so-called “elite capture” gaining attention in the literature – which has become a source of inequality.

Anne Phillips (2004) argues that equality of outcome should be considered as a reasonable test for whether equality of opportunity is available.

This period of stagnation stands in contrast to the “golden age of capitalism” that extended from 1945 to 1973, an era of rapid growth, low unemployment, and rising real wages in the industrial economies of Europe and North America.

For example, the restrictive assumption of fixed prices in Wanjala and Were (2009) prevents them from incorporating relative price effects into the multiplier analysis of the stimulus package. And the closure rules in Siddiqui's (2009) CGE model prevent a complete representation of the various channels by which trade liberalization affects the economy.

Scholarship in this area has focused almost exclusively on economic growth as the macroeconomic variable of interest. The research has not yet systematically explored the developmental impact of gender wage inequality on capabilities (for example, on societal health outcomes and education).

The long run and the short run do not refer to specific lengths of time, but rather are distinguished by the flexibility decision makers have. In the short run, some inputs are fixed while at least one can be varied. The long run is a period of time in which the quantities of all inputs can be varied. With regard to gender variables, the productivity of the labor supply is a variable that can lead to change in the long run, via more education or increased investments in children, but is fixed in the short run.

A number of empirical analyses do include dummy variables to capture regional differences in relationships between gender and macro outcomes. However, the authors emphasize cultural differences between regions more than economic structure as a motivation for the inclusion of regional dummies (Dollar and Gatti 1999; Klasen 2002).

However, labor force participation is a poor proxy for employment. For example, we know that in a number of countries, in the Caribbean in particular, labor force participation may not correlate well with employment since women have higher unemployment rates than men.

These results are consistent with Esteve-Volart's (2004) study investigating the impact of the share of women among managers and workers across Indian states. She found that the average productivity of workers and talent of managers was smaller in cases of employment discrimination (manifested as occupational segregation), with negative implications for innovation, technology adoption, and growth.

In addition, see Elissa Braunstein (2000); Stephanie Seguino (2000a, 2000b); Matthias Busse and Christian Spielmann (2006); and Shaianne Osterreich (2007).

The stimulus to profits results from the discriminatory portion of the gender wage gap, that is, the portion unaccounted for by productivity differentials between men and women.

One proposed solution is to apply a growth diagnostics method that helps the researcher to identify binding constraints to growth at the country level such that when a constraint is relaxed, there is a payoff in terms of higher growth (Ricardo Hausmann and Dani Rodrik 2005).

Feminist economists' interest in examining how an outcome came about renders case studies invaluable. To convey insights about process, a single researcher may use complementary methodologies or draw upon case study evidence produced by others in interpreting cross-country regression results.

The concepts of “decent wages” and “decent work” are part of the ILO's decent work agenda, which calls for productive work that ensures fair pay, workplace security, support for families, opportunities for personal growth, freedom to associate and organize, and no discrimination along with employment generation, promotion of social protection, and social dialogue.

Koopman's argument is consistent with the literature that is critical of the disproportionate attention given to women's legal rights to land in the context of liberalization. For example, Shahra Razavi (2007) points out the contradictions in the stance of some advocates for women's land rights. She indicates that they do not pay as much attention to gender inequalities in access to complementary inputs and technology, and they tend to overlook the fact that the promotion of land titling and land markets has reduced women's access to land in the course of liberalization in Africa. Razavi also takes issue with the argument that rectifying gender inequality in land rights is a win-win scenario for promoting efficiency, gender equality, and poverty reduction. She argues that not only is the empirical basis of the efficiency argument weak, but also the efficiency of small farms is often achieved on the basis of distress and intensification of women's labor, either as unpaid family workers or own account workers.

Moreover, Ben Bernanke, Thomas Laubach, Frederic Mishkin, and Adam Posen (1999) find that inflation targeting is less successful in reducing the “sacrifice ratio” compared to other methods of controlling inflation. In the macroeconomics literature, sacrifice ratio refers to the output cost of reducing inflation.

Inflation targeting in Africa is pursued along with import liberalization, which together aim to solve the supply-side bottlenecks by making lower-priced food imports available. The policy mostly benefits urban consumers at the expense of local small farmers who, as Koopman (2009) argues, cannot compete with imported food produced by capital-intensive and often heavily subsidized agricultural systems. Agricultural trade liberalization also contributes to trade deficits and exacerbates the debt burden.

Labor force participation may not correlate well with employment if women have substantially higher unemployment rates than men. Further, employment data do not tell us about the quality of the job, wages, benefits, and gender differences in the volatility of earnings associated with the positions that women and men hold. The level of income is also dependent on hours of reproductive labor, leisure, and recuperation and on cash transfers from the state.

While Human Development Index (HDI) and Gender-related Development Index (GDI), which were developed by the Human Development project, emphasize the expansion of human capabilities as the goal of development, they incorporate GDP per capita (as proxy for the means for expanded capabilities) and thus do not address the question of nature of growth. Genuine Progress Indicator (GPI) is a more promising alternative that addresses several shortcomings of GDP per capita including feminist critiques (John Talberth, Clifford Cobb, and Noah Slattery 2007). While GPI estimates have been calculated recently for several industrial economies and several states within the US, it has not yet achieved the status of an internationally comparable measure.