Feminist economics

The author is professor at the American University in Washington, D.C

Over the last few decades, a new field called feminist economics has
emerged, raising the importance of gender as an analytical element.
Drawing from women’s lives and experiences, feminist economists have
shown how well-accepted economic thinking, accompanying models and
stylized facts have been based on stereotypical assumptions about
gender. The term “gender” as it is used here refers not so much to
biological differences but more the social construction that assigns
different roles, rights and opportunities to persons based on their sex.

Feminist economics has made major contributions towards broadening the
sphere of economic inquiry. It has criticized and challenged the
dominant paradigm (neo-liberal or neoclassical economics) with its
emphasis and preoccupation on the market economy rather than the full
range of human economic life. Many feminist economists believe that the
neoclassical framework poorly characterizes the lives of those whose
economic circumstances are more distinctly structured by factors beyond
their personal control, and hides the fact that many people have little
opportunity to self-determine their lives.

Disagreeing with the mainstream economic view that cultural and social
factors should be treated as exogenous, feminist economists such as
Bina Agarwal, Nancy Folbre, Lourdes Beneria and Diane Elson explain how
social norms and social perceptions are interlinked with the market,
the community and the state. They argue that those who hold greater
social, familial and economic power decisively influence the norms and
perceptions that prevail in a given economic setting. As a result,
economic processes and institutions that operate through these social
norms yield different outcomes and impacts.

A large part of the problem lies in the implicit male-bias embedded in
the underlying assumptions, theoretical framework and methodology of
the neo-liberal discipline. For example, it is typically assumed that
economics is gender-neutral. The critical gendered aspects of the
economy are not accorded any analytical relevance and the data are not
collected to support an alternative economic analysis. Data such as
those of employment, underemployment and wages have not been
systematically disaggregated until the 1980s for many developing
countries.

This has resulted in a body of knowledge that generates policies which
ignore important dimensions of economic life such as the household
production of non-marketed goods and services vital for social
reproduction and human development. Much of these activities are still
carried out outside the labor market, are essentially female-dominated
and usually unremunerated. They are “invisible” yet ensure the renewal,
care and quality of the work force and enable the functioning of an
economy. Activities such as attending to emotional needs, child care,
cooking, and so forth are regarded less valuable than activities that
produce money income.

Until recently, there has been little systematic effort to document and
measure this important segment of the economy. This invisibility has
contributed vastly to the undervaluation of women’s contribution to the
economy.

There is a growing consensus that the neglect of the reproductive or
care economy has led to a limited understanding of the differences in
opportunities and constraints as well as in the impact of economic
change, policies and technology advances on men and women. Recent
attempts by feminist economists have incorporated gender in
macroeconomic models and seek to demonstrate the important dynamics
between the visible, productive, market-based economy and the invisible
“reproductive economy.”

Developments in labor market theories and empirical research have also
shown the important link between reproductive economic activities
performed mainly at home and labor market participation. The unequal
division of unpaid work between women and men has been linked to the
sex-segregated character of labor markets and gender-based
discriminatory practices in training, hiring and promotion.

Reproductive or care activities and the largely invisible, unpaid labor
used in them have thus become important areas of feminist economic
inquiry. They ask such questions as “What are the consequences of human
activities that support human relationships, and how should these be
theorized in relation to other economic activities?” “How do the
present gendered division of housework and care provisioning influence
women’s options, choices and position in the marketplace?”
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Feminist economics has likewise challenged existing methodologies and
approaches which have evolved to deal primarily with markets and market
behavior. Just as neoclassical economic models and theories give rise
to certain data needs, so do feminist economics. Many existing
statistical conventions for the definition and measurement of economic
activity are either gender-blind or gender-biased. Technical problems
and methodological considerations confront feminist economics in their
research as they try to collect new kinds of data and measure
previously unmeasured economic phenomenon. Economists who want to
conduct research on feminist issues and concerns realize that their
graduate training has instilled in them specific skills for analyzing
secondary data but not for collecting it.

This implies that gender is not only a central analytical category that
needs to be integrated in economic theory, but also in methodology and
empirical investigation as well. The theoretical or analytical models
dictate what questions are being asked and what information are deemed
relevant. Methodology shapes the response or answer to these questions.
This presents another challenge: the development of a gender-sensitive
methodology.

In calling for a body of knowledge more accountable to the diversity of
human lives, feminist economics raises questions that are of immediate
importance to broader segments of the population in developing
countries. How to provide for basic human needs, for example, is a more
compelling question to the hungry than how to simply understand human
wants and choices. Similarly, efforts to assess human well-being may be
more useful to many than simple measures of output of the market
economy.

The policies and actions of governments, multilateral institutions and
the private sector can alter the options and opportunities faced by men
and women – whether as participants in the market economy or as
contributors to the non-market, care economy. Macroeconomic policies
have social as well as economic outcomes; they affect the distribution
of benefits and costs among the population. There are critical gender
dimensions of macroeconomic and sectoral policies that need to be
recognized and addressed.

Domestic Financial Policies. Government plays a crucial role not only
in facilitating efficiency and innovation in financial services, but
also in steering the development of its financial sector towards
serving economic and social development goals including gender
equality. While financial institutions are prone to excessive risk
taking, they tend to be conservative when it comes to serving the poor
and in particular, women.

Many formal financial institutions tend to ration their financial
services, e.g. savings and credit facilities, mainly to higher income
households or large businesses, particularly corporations. Indeed,
financial institutions bypass many financial needs of whole social
groups including the poor and women. This is due not only to
transaction costs and collateral considerations but also to prevailing
gender norms and persistent gender inequalities.

Women’s lack of access to credit is widely recognized as one of the key
constraints that limit women’s performance in productive activities.
Many poor women cannot provide adequate collateral and the requirements
for obtaining bank credit often discourage women from approaching banks
and traditional financial institutions for their financial needs.

While microcredit and microfinance projects have become one of the key
strategies for addressing women’s poverty, these schemes require a more
gender-sensitive programming and management approach in order to ensure
that they do not undermine women’s empowerment.

Furthermore, important as they are, microcredit programs do not address
women’s need for other financial services that go beyond credit – such
as insurance, savings mobilization, and technical assistance. The
development of financial services that serve women on a major scale
will require the provision of an integrated saving, insurance as well
as credit services in an easily accessible form and the inclusion of
women in the leadership, planning and decision making.

Fiscal Policies. The decrease in the level of government spending for
essential social services has been a key element in public sector or
government downsizing. Declines in government support for health care,
education, housing, utilities, and sanitation in many countries have
contributed to the unaffordability of basic goods and services that are
vital for human maintenance. Such cuts in key social programs are
likely to increase women’s unpaid work and at the same time, raise the
costs of schooling in schools and universities. In some cases, girls
are made to withdraw from schools and help in household chores or work
in the informal sector as education becomes less affordable.
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With the reduction of the government role, public-private sector
partnerships have been forged to address specific aspects of poverty
reduction. Unless they take gender into account, such programs are
likely to ignore gender differences in risks and vulnerability, thereby
leading to significant, often unintended, gender impacts.
Further, as pressure for governments to adopt fiscal austerity measures
increases, the allocation of public expenditures will continue to
neglect other special needs and priorities of many women. These
include, among others, violence against women and the disproportionate
burden of caring for children, the sick and dependents. There is urgent
need to meet the provisioning of such services as domestic violence
counseling and child care support but they are often given low priority
amidst fiscal tightening.

Investment and Financial Policies. The terms under which private
capital flows are encouraged to enter a country are critical in
determining whether foreign investment promotes or undermines women’s
empowerment and gender equality. For example, the reallocation of
budget priorities towards infrastructure that would primarily benefit
foreign investors may constrain resources available to other budget
expenditures such as education, health, sanitation and other social
services.

The potential, significant costs resulting from such shifts in budget
allocation and decline in public social services are in “less visible”
and often unmeasured forms. These include increased unpaid work burden
of women and other social costs. Also, the use of tax-based incentives,
cheap labor and feeble environmental and labor standards to attract
foreign capital leads to an inequitable distribution of benefits and
costs.
While financial market liberalization helps in the rapid expansion of
market economies, it can also make countries grow more unequal and
vulnerable to rapid swings in markets. The free mobility of capital
exacerbates economic instability and increases the risk of economic
downturns and crises. These associated risks are disproportionately
shouldered by the poor, particularly women and children.

In the absence of social services and comprehensive safety nets, women
become subject to increased economic and social pressures. If the
formal market sector of the economy collapses, household production is
likely to increase. At the same time, women must also manage the
increased stresses that inevitably emerge within households. The unpaid
labor of caring increases during times of economic crisis, but this
work primarily falls on women and intensifies serious health problems
and stress.

Trade Policies. Trade liberalization has a significant impact on the
structure and scale of employment. Such transformation has not yielded
gender-neutral results in terms of earnings, employment, and level of
unpaid work. The link between gender, trade and growth are bound to
differ in economies with diverse economic structures and social norms.

Export expansion can have potential benefits in terms of higher growth,
more foreign exchange earnings, increased employment and improved
women’s welfare. Among the industrializing, developing countries, the
share of women workers in the export-oriented, manufacturing sector
such as garments and electronics has substantially increased. However,
while access to an independent source of income tends to be highly
valued by women not only for what it buys but also for the greater
dignity it brings, it may also have serious costs to women’s (or their
families’) welfare.

For instance, increased women’s participation in the labor market may
be at the cost of longer workdays for women and more intensification of
work at home particularly if they continue to perform most of the
household work, child care and care of the sick. Furthermore, the
offering of low wages and the significant wage gap between men and
women in the East Asian countries have served as stimuli to investors
in the export-oriented, female labor-based sectors.

Lastly, the erosion of workers rights allowed by governments and
endorsed by multilateral institutions to serve as one of the main
building blocks for increased competitiveness in the world market has
resulted in working conditions that have either remained poor or
worsened.

The extent to which strategic trade polices as a development strategy
bases its success on the maintenance of gender inequalities will
frustrate a nation’s ability to achieve its human development
objectives. Global competition in the commodities market should not
occur as a “race-to-the-bottom” that is dependent on erosion of
workers’ rights and systematic discrimination against women and girls.

The challenge to understand the differential impacts of macroeconomic
policies in the context of globalization has led to a more careful
examination of the microfoundations of macroeconomic policies from a
gendered perspective. The underlying assumption that “economic agents
are perfect, rational utility maximizers” combined with the exclusion
of non-market care activities are criticized by feminist economists for
generating inaccurate and incomplete descriptions of whole economic
systems. As Nancy Folbre argued, economic agents are purposeful agents
who make decisions to buy, sell, and engage in various social
activities influenced by both efficiency consideration and “the social
construction of individual preferences and cultural norms.”

When this recognition of the complexity of human behavior is combined
with a definition of the economy broader than currently found in most
macroeconomic models and theories, then economists can better
understand how an economy works, grows and develops. An economy is more
than just the sum of private and public enterprises, the goods and
services valued in monetary terms. Such stylized fact systematically
distorts perceptions of current trends and effects of macroeconomic
policies. One such crucial aspect that is excluded is the time spent in
household production, investments in human capital through childcare
and education, depletion of national resources and degradation of the
environment.

A large part of the problem lies in the implicit male-bias embedded in
the underlying assumptions, theoretical framework and methodology of
the neo-liberal discipline. For example, it is typically assumed that
economics is gender-neutral. The critical gendered aspects of the
economy are not accorded any analytical relevance and because it is
conceptually not important, the data are not collected to support an
alternative economic analysis.
The challenge that is posed to economic orthodoxy is therefore this:
That the notion of an economy must be studied in terms of provisioning
to meet human needs rather than scarcity combined with unlimited wants.
Feminist economics also challenges the economic profession’s preference
for economic efficiency arguments and shifts macroeconomic policy
concerns towards equity and fairness considerations.

This leads to the development and exploration of new methods of data
gathering, learning and empirical assessments. New research agenda that
includes household decision-making, allocation of time, gender
differences in patterns of market behavior such as in savings and
expenditure allocation are beginning to be addressed. Changing existing
data collection and methods is also crucial not only for better
evaluation of current economic policies but also for more complete
accounting of a nation’s total economic activities. The use of
qualitative information and fieldwork as complement to quantitative
data helps uncover biases in survey data and offer further insights as
to the economic activities performed by people.

The opportunities for restructuring macroeconomic models are also being
explored. Rather than simply adding and stirring women into existing
models, current efforts by Diane Elson, Gerald Epstein, Nilufer Cagatay
and Stephanie Seguino are re-visioning the macroeconomy and developing
analytical frameworks that more accurately represent the complexity of
human behavior.

The challenge is to help translate these into practical strategy and
for the economics profession to regard people and their well-being not
simply as factors of production but as ends in themselves. It also
means making macroeconomic policies create conditions for both women
and men to be truly agents of their own development.

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