Gender and Macroeconomics: Current State of Research and Future Directions

A conference organized by the Levy Economics Institute of Bard College with the generous support of The William and Flora Hewlett Foundation

BGIA, New York City
108 W. 39 St., Suite 1000A
March 9–11, 2016

Call for Papers

The goal of this conference is to advance the current framework that integrates gender and unpaid work into macroeconomic analysis and enables the development of gender-aware and equitable economic policies. We are especially interested in topics relevant to Sub-Saharan African countries, including but not limited to:

1. Relationships between economic structure (e.g., the relative importance of the service sector, agriculture, the care economy, trade, etc.), growth regime (wage-led versus investment-led growth), and gender inequities.
2. Mechanisms and the extent to which unpaid work constrains women’s participation in paid work and access to economic opportunities.
3. Implications of women’s labor market participation for their well-being and for intrahousehold allocation of time.
4. Structural, macroeconomic, and microeconomic aspects of women’s employment in the informal sector.
5. Formulation and analysis of gender-aware policy interventions.
6. Frameworks for integrating the role of unpaid work in measures of well-being (e.g., time and income poverty).

We invite both theoretical and empirical studies and encourage submissions that employ innovative methodologies and new datasets. We are also interested in papers that provide a comprehensive picture of the state of the art, identify gaps, and indicate directions for future research.

Accommodation and travel-related expenses will be covered by the conference organizers. Please send your abstract via e-mail to Ajit Zacharias ([email protected]).

Important dates:

What has struck me about Modi’s maiden budget is not the fiscal arithmetic, but the framework. And while this note confines itself to analyzing the budgetary framework rather than the numbers, it should be noted that the effectiveness of the fiscal arithmetic has gone for a toss with the announcement of token provisions on too many programmes with too little money. The underlying framework of the speech revealed the thematic priorities of the Modi government, which were twofold: (i) growth revival and (ii) macroeconomic stability. This sets the track.

The general budget was simultaneously ensuring “continuity” and “change.” The continuity elements in the budget may be designed to ensure a bipartisan approach in tackling issues of national interest, especially in the case of fiscal consolidation and the “rights-based” public policy decisions (e.g., employer of last resort, food security) of earlier governments. However, the changes suggested in the budget, in terms of monetary framework, are disturbing. continue reading…

A new volume edited by the director of the Levy Institute’s Gender Equality and the Economy program, Rania Antonopoulos:

I’d like to take a moment to give a brief report on some research that my colleagues Ajit Zacharias, Rania Antonopoulous, and I have been working on as a result of collaboration between the Levy Economics Institute and United Nations Development Programme (UNDP) Regional Service Centre for Latin America and the Caribbean (RSCLAC), particularly the Gender Practice, Poverty, and Millennium Development Goals (MDG) Areas. It addresses an identified need to expand our understanding of the links between income poverty and the time allocation of households, and between paid and unpaid work. Policies to combat poverty and promote equality require a deeper and more detailed understanding of the linkages between conditions of employment, unpaid household production, and existing arrangements of social provisioning—including social care provisioning.

Income poverty is customarily judged by the ability of individuals and households to gain access to some level of minimum income based on the premise that such access ensures the fulfilment of basic material needs.  However, this approach neglects to take into account the necessary (unpaid) household production requirements, without which basic needs cannot be fulfilled. Households differ in terms of their household production requirements and also in terms of the time their members have available to meet the requirements, so it should not be assumed that all households can meet these requirements. In order to promote gender equality, it is imperative to understand how labor force participation and earnings interact with household production responsibilities, as it is already well established that women contribute their time disproportionately to unpaid work.

We provide an analytical and empirical framework that includes unpaid household production work in the concept and measurement of poverty. Our approach shows that awareness of gender differences (especially in unpaid work) can bring to the forefront a ‘missing’ but key analytical category that allows for an improved measurement of poverty, and a deeper and more precise poverty classification of households and individuals. Future posts will delve more into policy ramifications of this work. In this post, I want to report on two of the headline results of our research.

Our alternative measure is a two-dimensional measure of income and time poverty, which we refer to as the Levy Institute Measure of Time and Income Poverty (LIMTIP). Time poverty, especially when coupled with income poverty, imposes hardships on the adults who are time-poor as well as their dependents, particularly the children, elderly, and sick. Income poverty alone does not convey enough useful information about their deprivation. Our measure can shed light on this phenomenon. My colleague Ajit Zacharias has published a working paper that lays out the theoretical underpinnings of the measure, and I have a working paper that outlines the methods used to construct the data sets we used to create the measure for Argentina, Chile, and Mexico.

The first important result of our project is that the size of the hidden poor, namely those with incomes above the official threshold but below the LIMTIP poverty line, is considerable in all three countries (Table 1). The LIMTIP income poverty rate for Argentina is 11.1 percent, compared to 6.2 percent for the official poverty line. For Chile, adjusting for time deficits increases the poverty rate to 17.8 percent from 10.9 percent for the official line. And in Mexico, the poverty rate increases to 50 percent from an already-high 41 percent. This implies that the households in hidden poverty in Argentina, Chile, and Mexico comprise, respectively, 5, 7, and 9 percent of all households.

The second important result of taking time deficits into account is that it dramatically alters our understanding of the depth of income poverty. The average LIMTIP income deficit (the time-adjusted poverty line minus household income) for poor households was 1.5 times higher than the official income deficit in Argentina and Chile and 1.3 times higher in Mexico. Thus, official poverty measures grossly understate the unmet income needs of the poor population. From a practical standpoint, this suggests that taking time deficits into account while formulating poverty alleviation programs will significantly shift both the coverage (including the ‘hidden poor’ in the target population) and the benefit levels (including the time-adjusted income deficits where appropriate).

Table 1 Official, LIMTIP, and ‘Hidden’ Poverty Rates and Number of Poor (thousands)

Rania Antonopoulos, director of the Gender Equality and the Economy program at the Levy Institute, has a blog post up at Direct Care Alliance making the case for adding social care investments to the American Jobs Act, citing the large employment effects of direct job creation programs in early childhood education and long-term care for the elderly and chronically ill.

A version of this idea showed up on the DC legislative radar recently, in the form of a jobs bill that includes a “Health Corps” and “Child Care Corps” among its provisions for direct job creation (see items 5 and 7).

In a post on Ezra Klein’s blog entitled “The recession’s gender gap: from ‘man-cession’ to ‘he-covery’,” Suzie Khimm notes that the recovery is happening for men but not so much for women. She quotes an Institute for Women’s Policy Research paper that refers to our research, found in this policy brief. Early childhood education and home health care represent great opportunities for improving quality of life for the care recipients as well as for the people who would become employed under these proposals. I will be listening for some mention of them by President Obama tomorrow night.

Chart 1 (Click to enlarge.)

In a New York Times blog, Nancy Folbre recently discussed the alarming disconnect between economic growth and job creation in the United States. While the economy has been growing since the Great Recession’s end in 2009, the employment rate remains stuck at its December 2009 level of 58 percent. This percentage had reached 65 percent during the boom leading up to the 2001 recession—a level not seen since then. The slow recoveries of the job market after the last two recessions have fostered a concern among many that the link between economic growth and job creation has been severed, a phenomenon that might be called the American Output-Jobs Disconnect. Chart 1 at the top of this post illustrates this turning point in the employment rate (employed persons divided by population). The blue line shows the employment rate for males plunging from 71.9 percent in 2000 to 63.7 in 2010, while the red line depicts the rate for females falling from 57.5 percent to 53.6 percent during the same 11-year interval.

Reading an interesting proposal from the Center on American Progress (CAP) and the Hamilton Project to reform the Social Security disability program, also known as SSDI, I noticed this chart, which seemed relevant to the same topic.

Chart 2 (Click to enlarge.)

Chart 2 above shows that among men aged 40 to 59, employment rates for those who do not report having a disability were approximately the same in 2008 as they were in 1988, while the percentage of disabled men who are working fell from 27 percent in 1988 to 17 percent in 2008. It is remarkable that the decline in the employment rate for men aged 40-59 can be accounted for almost entirely by a fall in the employment rate for the disabled members of this group, at least for the period 1988–2008.

Another well-known fact seen earlier in Chart 1 is that employment rates for women rose dramatically until approximately the year 2000. In Chart 3 (just below this paragraph), also from the CAP-Hamilton proposal, one finds that what was true for women in general was not true for disabled women, at least in one age group. The employment rate for disabled women aged 40-59 was only 16 percent in 2008, compared to 18 percent in 1988.

CAP and the Hamilton Project argue in the paper that the long-run fall in the employment rate for disabled people can be blamed largely on the design of the Social Security disability program. This problem is one of the many issues that motivate the paper’s proposal for a “front-end” disability benefit. The proposed disability benefits are designed to be quickly obtainable after the onset of disability and to encourage a quick return to the workforce when one is possible.

More recently, this proposal, along with a number of other issues related to the Social Security disability program, were discussed in this article by Motoko Rich in the New York Times. The New York Times article quotes some experts who question the importance of problems with the Social Security disability program as factors in recent employment trends.

While reading Folbre’s blog post last week, I realized that a disabled–nondisabled breakdown of employment rates might also shed some light on the post-recession employment issue mentioned by Folbre.  To wit: did the recovery from the 2007–09 downturn improve employment rates for the disabled or nondisabled subgroups of either gender, in spite of the ongoing slump in the overall employment rates for both males and females of working age?  This question was addressed in a fascinating article in the BLS’s Monthly Labor Review (MLR) last fall, which focused on the thesis that the recession disproportionately affected the job-market prospects of disabled workers. The article found declining employment rates for both disabled and nondisabled Americans. We have created Chart 4 below using BLS data similar to those analyzed in the MLR article but for a broader age group, namely ages 16 to 64, and for an updated dataset.

Chart 4 (Click to enlarge.)

Given the findings reported in the MLR article, it is not surprising to find a sharp decline in employment rates for all four subpopulations depicted in Chart 4: male and female disabled people, as well as males and females without disabilities.

The data series shown in Chart 4 are among many pieces of evidence against any theory that the largest drops shown in our charts can be explained mostly by a structural or long-term change in disability policy. To wit: at least since 2008, the ongoing fall in the probability of being employed has strongly affected the job prospects of both disabled and nondisabled people of both genders. Also, the acceleration of the declines shown in Chart 1 starting in 2007, as well as the substantial decreases shown in Chart 4 for 2008 to the present, hints at an important and negative role for the recent recession and the weakness of the current recovery. Hence, a new government jobs program such as an employer-of-last-resort (ELR) program and/or other anti-recession measures—and not just long-term improvements in entitlement programs such as federal disability benefits—are still very much apropos.

(Thanks to Alex Bartik of the Brookings Institution for providing Charts 2 and 3 and to Brookings for permission to use these charts in this blog.)

The Free Exchange blog calls President Obama’s proposed $50 billion infrastructure stimulus “A New Hope.” Our research begs to differ. We find that spending $50 billion on infrastructure would create little more than half a million new jobs. That’s not an inconsiderable number, but it’s a drop in the bucket compared to the 14.9 million who were unemployed in August (according to the last employment situation report).

There are strong arguments to made in favor of infrastructure spending. But if the administration were to spend the same amount on social care (child care, home health care, etc.), the employment gain would be more than twice as great, reaching nearly 1.2 million.Those would be lower paying jobs, but they would go to individuals further down the economic ladder–the people, in other words, most in need of help and most likely to provide further stimulus by promptly spending their earnings.

Perhaps the president’s latest proposal is merely a political trap Obama is setting for the Republicans, giving them yet another opportunity to ostentatiously oppose something popular. If so, good luck. But after the weaker-than-needed stimulus package last year, which is now running out of gas in terms of boosting employment, this proposal won’t provide much additional job growth. Half measures, as the saying goes, avail us naught. And this proposal is much less than half of what is needed.

You may already know that women’s workforce participation has increased and gender wage gaps have been closing gradually, although we still have a long way to go. Work-life balance can be costly, and raising children is rewarding yet financially challenging.

A new report by the congressional Joint Economic Committee gives an excellent description on the status of women and challenges they have faced in the labor market over the last 25 years (ht to Catherine Rampell at Economix).

As a researcher of the care economy, I couldn’t help noticing the following two graphics. First, Figure 10 in the original report:

The opportunity cost of being a stay-at-home mom is high and grows as time goes by at the rate of 1.34 percent a year! Imagine how much worse off the family will be in 30 years with all the forgone income,  savings, and smaller social security checks to receive after retirement, and so on.

Some of you may claim that it was their deliberate choice to stay at home, so the society should not come to the rescue. Well, if Paris Hilton becomes mom and decide to stay at home to take care of her kids, she probable won’t need any social support other than occasional photo-shoot opportunities to upkeep her celebrity status. For most of us with less financial freedom than Ms. Hilton, however, the choice may have been in part forced by lack of affordable quality care.

Speaking of costs, Figure 15 shows how unequal child care expenses are distributed across families with different income levels:

Looking at the costs as a share of family income, I wonder: how in the world can a mom can keep her job and send her kids to day-care, unless society provides support? Having kids appears to be one of the traps of poverty!

To address the inequalities of care burden, one solution is to expand social care provision and make it universal, if possible (universal care does not mean one is forced to join the system by law). It will not only free many, many women from the costly choice and burden, but offer jobs to many of them in the care economy, as my colleagues and I have proposed.

P.S. One question for readers:  what is a better way to internalize the positive externalities of raising the productive citizens of tomorrow, let alone ensuring the survival of human species? (I think funding NASA projects sort of fits in the question – cutting edge technology development and its spillovers, for instance the Temperpedic mattress, and the search for another habitable planet.)

The Bureau of Labor Statistics released its May employment situation report today and the news was mostly grim. Sure, unemployment dropped to 9.7 percent from 9.9 percent. But don’t get too excited, because almost all the new jobs created in May were for census-takers, and these folks will be unemployed again soon.

In more bad news masquerading as good, the so-called mancession appears to be easing. Most developed countries are beset by one of these male recessions, with men suffering the brunt of job losses due to their much greater representation in construction and manufacturing—both of which are hard-hit almost everywhere. In this country, at least, the mancession looks like it’s easing—until you look a little closer and realize that this is only the case because men leaving the labor force increased by 4.7 percent over last year, an increase twice that of women. In other words, men aren’t gaining jobs. They’re giving up.

What shall we do with the horrendous number of idle men? Their skills may not be valued in industries that have done better than traditional men-industries. Training for new kinds of work is one possibility, but demand for new workers may not be there yet; relocation to other states may be out of the question if your mortgage is underwater; and the Euro crisis is a pinch of salt on the slow-healing wound of recession.

For a great many men, this Father’s Day is unlikely to be a happy one.