Engendering Macroeconomic Theory and Policy
Over the last 20 years, macroeconomists have increasingly given attention to the role of gender in the macroeconomy and the implications of macro-level policies for gender equality. This paper reviews the salient findings of that literature. Resear...
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| Language: | English |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/275461512048851974/Engendering-macroeconomic-theory-and-policy http://hdl.handle.net/10986/28951 |
| Summary: | Over the last 20 years, macroeconomists
have increasingly given attention to the role of gender in
the macroeconomy and the implications of macro-level
policies for gender equality. This paper reviews the salient
findings of that literature. Research shows that gender gaps
in education, health, unpaid labor, employment, and wages
affect the macroeconomy, influencing the rate of per capita
GDP growth. The effects are transmitted via both the supply
side of the economy, principally through labor productivity,
and the demand side, through business spending, exports,
saving, and the balance of payments. Theoretical
perspectives influence which gender gaps are incorporated
into models as well as how. For example, heterodox
economists emphasize the demand and supply side in the short
and long run, while neoclassical economists tend to focus on
long-run supply-side effects. There is widespread agreement
in the literature that greater gender equality in education
and employment (proxied by labor force participation rates)
stimulates long-run per capita growth. Improving women’s
relative productivity through educational investments and
facilitating their participation in paid labor serves
several purposes. For example, assuming talent is equally
distributed across men and women, a narrowing of gender gaps
in education and employment contributes to higher average
educational attainment and a more efficient allocation of
labor. As educational attainment rises and women gain
greater access to paid work, the opportunity cost of having
additional children also rises, leading to a decline in
fertility rates. Women’s bargaining power within the
household rises at the same time. This increases their
ability to allocate household spending in ways that benefit
children, and as a result, economy-wide labor productivity
growth. The weak link in this chain is that aggregate demand
may be insufficient to absorb an increase in women’s
relative labor supply. Demand-stimulating policies as well
as other policy measures may be necessary to ensure women’s
relative employment rate rises. Full employment policies can
help to narrow the employment gap and well-targeted physical
and social infrastructure investments have been found to
promote women’s access to paid work. Finally, traditional
monetary policy—that is, the use of interest rates to manage
demand and by extension, inflation, has gender-related
employment effects, and exchange rate policy also influences
the gender wage gap. This area of policymaking has received
much less attention than fiscal policy as a tool for
promoting gender equality. The paper concludes with a
discussion of areas for future research. |
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