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Fridays Academy: Gender and Macro Economic Policy

Ignacio Hernandez's picture

We start a new course in our Fridays Academy series. Starting today, every Friday we will cover one topic related to Gender and Macroeconomic Policy. These postings are based on Raj Nallari and Breda Griffith's lecture notes.

 

 Introduction

Gender refers to the social meanings given to biological differences between the sexes and is therefore shaped by the mores and norms of each culture.  It is a social category similar to other social categories like race, ethnicity, class and age, although some aspects remain common such as child-bearing and rearing for women and military service for men. 

 Gender extends beyond the realms of ideology and culture to economics.  For example, the division of labor within most societies was based on gender.  Differentiating between productive activities – income generating activities normally linked to the market – and reproductive activities – non-income generating activities such as the care and development of people – traditionally followed a gender divide with females traditionally bearing the responsibility for reproductive activities as well as contributing to productive activities (Ça?atay, Engendering Macroeconomics and Macroeconomic Policies, 1998).

 Yet mainstream economic analysis has not allowed for gender – the individual as the basic category of analysis has no gender and expected to follow a utility-maximizing course in a rational manner.  Over the last few decades however, it has come to be accepted that using gender as a category of analysis yields informative and important insights to the growth and development of an economy.

 Contributions from development theory and feminist analysis have done much to transform economic analysis and help in the task of engendering macro-economic theory and policy. Engendering macro-economic theory and policy remains very much in its infancy despite progress in valuing reproductive activities in national income statistics since the late 1970s and in assimilating the lessons from development economics on gender inequalities. 

 During this and upcoming weeks we will examine the reasons for engendering macroeconomic theory and policy, beginning with a brief history of how gender came to occupy an analytical category in economics.

 

 Gender as a category of analysis

 Benería (1995) presents an overview of gender and economics that lays the basis for considering gender as a category of analysis in economics.  She notes that although economic analysis has included women’s issues from at least the 1930s, citing the example of the “equal pay controversy” in Britain that aimed to understand the reasons behind male/female wage differentials, it did so without due consideration of gender relations.  The answer as to why wage differentials existed was sought in the dynamics of the market rather than on gender relations within the market.  She notes that “the notion of the social construction of gender and its links with economic analysis had yet to be born”.

 A first step was the recognition of the household in economic analysis.  In the 1950s, Mincer examined the increasing labor force participation of women at a time of rising family income using the household as a category of analysis. Studies by Becker most notably and others in the 1960s paved the way for the New Household Economics that acknowledged the sexual division of labor and the market behavior of household members that resulted in differential labor market outcomes.  As noted by Benería (1995) “asymmetries in the division of labor and inequalities in the distribution of domestic work were explained through individual choices made under the assumptions of utility maximization and a harmonious household”. (p, 1840).  Although these assumptions were questioned in the emerging literature, e.g. ‘harmonious household with no conflicting interests and power relations’ (Bruce and Dwyer, 1988), the ‘aggregation of individual tastes and preferences within the household’ (Folbre, 1988), their analysis was hindered by the available analytical framework.  Most of the studies continued within the neoclassical framework, summarized by Harding (1987) as the “add women and stir” approach. Other studies that applied the theory of comparative advantage and human capital models to the analysis of specialization in home or market work were criticized as being inherently static “taking as given the initial allocation of resources among household members such as the gendered skills whose acquisition and distribution feminists were questioning” (Benería, 1995).

 The women’s movement that gained prominence in the 1970s posed very real questions and concerns about gender asymmetries. However, the analytical framework continued to ignore questions of gender inequality and concentrated instead on gender issues and how these were manifest in the labor market and with respect to choices in schooling. During the 1980s, various approaches by feminist economists began to address the restrictiveness of the available models and their assumptions that did not allow for gender inequalities and gender relations.  Of the approaches referenced in Benería (1995) – game theory, Marxian approach, institutional economics – Sen’s bargaining model that allowed for cooperative conflicts within the household using game theory was an important step beyond the rational choice models to date.

 According to Benería (1995), the different approaches followed by the feminist economists from the 1970s converged during the 1980s and 1990s for a number of reasons.  In particular, and in the US, the move toward the right politically threatened the gains made by the women’s movement and “provided a common cause for political struggle and intellectual work” (p. 1842).  She cites the gradual removal of political boundaries among the various approaches identified above and at the same time, within the feminist literature, a consideration of the effects of different social and cultural backgrounds on the experience of women.  Secondly, the enormous growth in feminist theory during the 1980s formed the roots of a postmodernism that challenged traditional analysis and the ways of doing research.  Gender emerged as a powerful category of analysis in postmodernism.  Moreover, postmodernism influenced the humanities and the social sciences, including economics where its influence helped form ‘new questions about the discourse of economics and its andocentric biases’ (p. 1842). 

 In summary then, mainstream economic analysis was gender-blind, assuming as it did that the household was an harmonious entity and the sum of gender-based specialization. This did not allow for gender discrimination, segmentation and segregation within the labor market or inequalities within the household (Ça?atay, 1998). The opening of Labor Economics and New Household Economics to feminist theory made way for gender as a category of analysis. As noted further by Ça?atay (1998) “in these new conceptions, the point of departure for analysis was the ‘real’ economy as it existed, rather than the abstract thought experiments of mainstream economic theorizing about optimal behavior for the ‘representative’ agent with its imputed market-oriented rationality (p. 5/6).

 Next Friday: Gender and Macroeconomics.