Economic Crisis, Gender Equality, and Policy Responses in Spain and Canada

Abstract

Spain and Canada were pursuing divergent political agendas before the 2007–09 global economic crisis and subsequent recession: Canada's conservative government, elected in 2006, had begun reducing the size of government by slashing revenues, while Spain's social democratic government (2004–11) aimed to increase social inclusion and gender equality. Using women's shares of market (labor and capital) incomes and after-tax incomes as equality indicators, this study analyzes the probable gender impact of each country's policies during the global economic crisis. The authors find that, although both countries were signatories to the United Nations Convention on the Elimination of All Forms of Discrimination against Women (1979; CEDAW) and the Beijing Platform for Action (1995), neither lived up to these commitments to undertake gender-based analyses when developing crisis interventions; but if Spain's policies had been maintained, they would have had less damaging effects on women in the long term than those implemented in Canada.

Keywords:

• Gender equality
• fiscal policy
• economic crisis
• gender budgets
• international comparisons

Keywords:

• B54
• J16
• D63

Notes

Most highly developed countries provide nearly universal access to education, health, and other basic services that in other countries would be more gender differentiated. Thus, the inclusion of other variables, such as time use, takes on increased importance in discerning quality of life and well-being.

Considering the complexities of women's labor market status in both Spain and Canada, particularly with the huge proportion of women unemployed in Spain, we thought that using unemployment and employment rates instead of LFP would be more precise because LFP includes those who are not in paid employment but are actively searching for employment and thus does not reveal the extent to which such workers might be receiving unemployment benefits or other assistance. In a larger scale study, LFP should be included alongside employment and unemployment rates because they help reflect the degree of disturbance caused by labor market recessions for women compared to men.

These measures are also the ones the UN used when measuring gender inequality in all areas of social and economic life (UN 1980). Whenever possible, Canadian data have been calculated using Statistics Canada's microsimulation database and simulation model, which had been adjusted for growth projections post-2008 in time for use in this study (Statistics Canada 2009, 2013a). Microsimulation was not available for use for Spanish data, but national statistics were available on a timely basis (Instituto Nacional de Estadística [INE] 2010a).

The issue of care benefits remains contentious: on the one hand, there are serious concerns about the quality of home-based care work (Jane Lewis, Mary Campbell, and Carmen Huerta 2008; Annamaria Simonazzi 2009; Elin Kvist and Elin Petersen 2010); on the other hand, as of 2009, 60 percent of women in Spain with care responsibilities experienced inactivity or unemployment due to lack of care services for children and other dependent persons, which was the fourth highest level in the EU, where the average level was just under 30 percent (European Commission [EC] 2010). Despite women's recent increased LFP, since the 1980s Spanish women have consistently shorter working lives than men; the effect of care responsibilities has not yet been determined (José-Ignacio Antón, Francisco-Javier Braña, and Rafael Muñoz de Bustillo 2007).

The proportionate allocation of incomes and outcomes between women and men is more equal than most actual distributions. Should women's shares of incomes and other “goods” ever start moving in the direction of increased parity, it will be crucial to examine whether such changes are actually improving women's well-being, or are merely substituting new forms of disadvantage. Given the large scale of the anti-crisis policies, the parity approach can at least provide some insight into gendered benefits. This gender audit of emergency legislation shows that gender-indifferent emergency policies can actually exacerbate the effects of the recession on women.

The 2008 budget projected that the annual revenue cost of the 2 percent reduction in the national GST would be C$12 billion; the Parliamentary Budget Officer (PBO; 2010c) projected the cost of the two-point reduction to be C$10.8 billion for 2010 (based on the PBO's use of Statistics Canada [2009]). The estimated cost of C$11.6 billion for 2009 was chosen by the authors in light of income growth trends reflected in early sampling of 2009 income tax returns (Canada Revenue Agency 2010).

Women's 38 percent share of the benefits of GST rate cuts was calculated through microsimulation based on Statistics Canada (2013b). The assumptions and calculations underlying the simulation results were prepared by Kathleen A. Lahey and Andrew Mitchell, and the responsibility for the use and interpretation of these data is entirely that of the authors.

The revenue foregone as the result of the corporate income tax cuts is calculated from data on federal corporate income tax paid derived from the 2010 budget (Canada, Minister of Finance 2010b); the revenue cost of the dividend tax credit is derived from Canada Revenue Agency (2010). Dividend tax credits are paid as the final step in “integrating” shareholder-level taxes on corporate profits with corporate-level income taxes.

This infrastructure funding is also available for the new Public–Private Partnership Program (P3), although uptake is expected to be low due to the complexities of organizing and documenting P3 projects. P3 funding is increasingly controversial, as it overcompensates private partners at the expense of public revenues and services (John Loxley and Salim Loxley 2010; Robin Jane Roff 2010).

For further information, see Supplemental Table 1 online.