Engendering Economic Recovery: Modeling Alternatives to Austerity in Europe

ABSTRACT

This article explores a gendered expansionary macroeconomic scenario for Europe as an alternative to current austerity policies over the medium term. Using a non-equilibrium structuralist macroeconomic model, it demonstrates that the dual aim of economic growth and increases in men’s and women’s employment can be achieved by adopting gender-sensitive expansionary macroeconomic policies. Based on historical data series, three scenarios for Europe for the 2015–25 period are compared: continued austerity, a gender-neutral expansionary scenario, and a gendered expansionary scenario. Projections for the gendered expansionary scenario suggest that 7.4 million more jobs could be created for women in the Eurozone and United Kingdom by reversing austerity policies and gendering and increasing government expenditure and private investment. Further, higher growth rates under this scenario lead to significant reductions of debt-to-GDP ratios and lower budget deficits. The study recommends Europe should roll back austerity policies and embark on a new gender-aware economic trajectory.

KEYWORDS:

• Europe
• crisis
• austerity
• fiscal policies
• employment
• gender inequality

JEL Codes:

• N14
• E17
• H5

Acknowledgments

This work has been made possible by generous financial support from FEPS, Brussels. The authors received helpful comments from participants of the “Beyond Austerity, Towards Employment: A Gender Aware Framework” seminar, held in Brussels in February 2014. Thanks also to Lorena Lombardozzi for excellent research assistance and to Terry McKinley for comments on an earlier draft. Finally, thanks to the anonymous reviewers and the Feminist Economics editorial team for their comments and suggestions.

Notes

1 The databank holds series in US dollar values and other units disseminated by UN organizations. The CAM model comprises a databank of historical time series and a series of computer programs that organize the original data, estimate model parameters, and generate scenarios.

2 For a full explanation of behavioral specifications for core macroeconomic variables, see Cripps (2014).

3 Government expenditure excludes transfer payments such as social security and pensions. Thus, the ratios shown are considerably smaller than the gross figure usually quoted.

Additional information

Notes on contributors

Hannah Bargawi

Hannah Bargawi is Lecturer in Gender and Development Economics at the School of Oriental and African Studies (SOAS), University of London. Dr. Bargawi has over ten years of experience working in research, advocacy, and academic institutions. Before joining the Economics department at SOAS, she was a Researcher with the Centre for Development Policy and Research (CDPR) where she was involved, among other things, in the EU-funded AUGUR project looking at policy scenarios for Europe and the world in 2030. Dr. Bargawi has a PhD from the University of London.

Giovanni Cozzi

Giovanni Cozzi is Senior Lecturer at Greenwich University, UK. His current research focuses on progressive macroeconomic and financial policies for Europe. Prior to this post, Dr. Cozzi worked as a Research Officer at the Centre for Development Policy and Research (CDPR). At CDPR he was involved in research for the EU-funded AUGUR project, which utilized a global macroeconomic model to investigate scenarios for Europe and the world in 2030. Dr. Cozzi has a Master’s and PhD in economics from the University of London.