What do Feminist Economists Have to Share with Us?

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It’s about money, but it's also about time (Antonopoulos et al 2012)!

Economists more often try to look at the reality taking into consideration these two dimensions. Who are the world time poor and how it affects their income? And who are the poorest of the poor with both time and money deficits? Some of these questions are going to be answered in the following paragraphs.

On 23-29 July 2016 in Chakvi, Georgia, while many people’s only question was whether to stay on the beach or to have an ice cream, a group of young people gathered by Heinrich-Böll-Stiftung South Caucasus was listening to lectures about feminist economics. Here are some issues that have been raised. They are keys to greener economics, and also a greener world.

It is important to engender economics because roles of women and men are different and not taking that fact into consideration deforms the assessment of economic situation and processes. Gender-inclusive economics shows fuller exploration of economic life. It focuses on topics of particular importance to women such as family economics, care economy, unseen and unpaid work, segregated labour market, and also unequal salaries and pensions (Elson 2009, Blau&Ferber&Winkler 2002, Antonopoulos & Hirway 2012, Piccio 2005, Cagatay 2001).

Homo economicus, created by Adam Smith in 1776, promoted by many capitalists, in its pure form occurs extremely rarely[1]. People are not rational actors in the market, who consider only prices. They are much more complex, holistic, and motivated by many other factors coming from their material and emotional realms.

Economics concepts are sometimes too narrow and many of them should be extended. For example, production is commonly understood as recorded market activity. Yet the total production is so much more as it includes hidden market production and also non-market production. The latter consists of non-market production part 1 – included in the System of National Accounts (SNA) and non-market production part 2 – not included in SNA. That means that own-account production of goods for own use is included in SNA, but own account production of services is not. If I hire a neighbor to mow my lawn the service is included in SNA, but if I do it myself it is not, even though the service has been done exactly in the same way! To link both market and non-market production value feminist economists promote the idea of Household Satellite Account[2] (Eurostat 2003, Antonopoulos&Hirway 2012).

It is not sufficient any more to speak about growth expressed by GDP growth rate[3] or GDP per capita[4]. We need Smart, Sustainable and Inclusive Development. Smart means developing an economy based on knowledge and innovation. Sustainable: promoting a more resource-efficient, greener and more competitive economy. And finally Inclusive, which should be understood as fostering a high-employment economy delivering social and territorial cohesion (European Commission 2010, Johnson-Latham 2007).

Positive links between gender equality and development could be observed. The relation of the two categories is sometimes called “a two-way street,” which means that equality influences the development and vice-versa economic development influences gender equality.   It happens because many developed countries appreciate gender equality and mainstream gender into most of policies. The best example are Scandinavian countries. On the other hand gender equality in the market means higher employment rates and higher earnings for women, both of them boosting economic development. Only few of the studies focus on EU member countries; most of them analyze the situation of ‘third world’ countries.

Other studies show also that women live in a more sustainable way than men. The main reason of it is that women’s business represent more environmentally friendly sectors of economies e.g. Manufacturing, Information&Communication, and Education (Johnsson-Latham 2007, Löfström 2009, Klasen & Lamanna 2009).

It is possible to measure gender equality and its relation to growth. In this approach gender equality is expressed as an index. There are dozens of them, but the most recognized in Europe are GII_UNDP Gender Inequality Index by United Nations Development Programme http://hdr.undp.org/en/content/gender-inequality-index-gii, GGG_ WEF Global Gender Gap by World Economic Forum http://reports.weforum.org/global-gender-gap-report-2015/, and GEI_EIGE Gender Equality Index published by European Institute for Gender Equality in Vilnius http://eige.europa.eu/gender-statistics/gender-equality-index.

During the last two decades in the majority of the European countries Gender Equality Indices were slightly going up, which implies greater gender equality. Unfortunately, some of the countries saw a decrease, e.g. Latvia and Poland, reflecting the effect of the economic crisis of 2008-2009 and consequent worsening of women’s situation on the job market. The main reason of it was the decrease of employment rates for women, while the rates for men in the countries were quite stable in that period of time.

If we compare Gender Equality Index (this time GEI_EIGE) with GDP growth rate in chosen European and South Caucasus countries, a strong negative correlation between gender equality and the GDP growth rate could be observed. This means that the higher the growth rate is, the lower the values of equality index (Figure 1.). The reason is that wealthier and more developed countries e.g. Sweden and Denmark, had already experienced the periods of high growth rates, which nowadays remain relatively low.  The situation in Georgia, Armenia and Azerbaijan was completely different. For them Gender Equality Index had been low, whereas GDP growth rates high. This is because they are poorer than Northern and Western European countries and they start from lower level of the economic development.

On the other hand a positive relation between gender equality indices and the GDP per capita could be observed (Figure 2). Positive relation means that two variables change in the same direction. In our case the higher the GEI, the higher the GDP per capita. The conclusion is that while measuring relation between gender equality and economic development the GDP per capita should be used instead of GDP growth rate. It is because the first variable (GDP per capita) shows the level of economic development and the latter shows the change of the level (GDP growth rate).  

Source: own calculation on the basis of Eurostat and EIGE data, 2014. Creator: M.H.. Creative Commons License LogoThis image is licensed under Creative Commons License.Source: own calculation on the basis of Eurostat and EIGE data, 2014. Creator: M.H.. Creative Commons License LogoThis image is licensed under Creative Commons License.

 

Women contribute less than men on growth, and one of the reason of that is because they spend considerably less time at paid work and much more time doing unpaid work. Unpaid work is the production of goods and services by household members that are not sold on the market. This may also be consumed by people not living in the household. The whole list is really long and consists of nearly fifty unpaid household activities. The main groups are routine housework, shopping, care for household members, care for non-household members, volunteering, and travel related to household activities. On average, women in Europe spend 4.37 hours daily for domestic work, while men only 2.36. Women devote most of their time to physical childcare, while men to teaching, reading and playing with children (Miranda 2011, Antonopoulus, Hirway 2010, Piccio 2005).

Even though the work is unseen and unpaid it has economic value. The value of household work amounts to 30-50% of Gross Domestic Product  (Becker&Becker 2006, Hozer-Koćmiel 2007). It is evaluated on the basis of Time Use Data gathered by the statistical offices of most countries of the world www.timeuse.org. When we know the amount of time spent on different household chores we multiply it by the average hourly wage that would be paid for the work in the market. The value of total household production may raise up to 50 % of market production (GDP).

It is important to go beyond standard economic measures. One of the idea is the TMSD Taxonomic Measure of Sustainable Development. It is based on Eurostat Sustainable Development Headline indicators, and takes into account the following variables: Growth rate of real GDP per capita, Resource productivity, People at-risk-of-poverty or social exclusion, Employment rate of older workers, Healthy life years and life expectancy at birth, Greenhouse gas emissions, Share of renewable energy in gross final energy consumption, Primary energy consumption, Energy consumption of transport relative to GDP, and finally Official development assistance as share of gross national income. In most of the European countries the level of sustainability of development has been rising in the last two decades. The highest values of TMSD were observed for Scandinavian countries. The decline was observed only in three countries: Hungary, Slovakia, Latvia. The Pearson coefficient between GEI Gender equality index and TMSD is 0.73, which means that the more equal the country the higher the level of the sustainability of development.

Time poor and time wealthy. Another example of going beyond standard measures is LIMTIP Levy Institute Measure of Time and Income Poverty, which is a two-dimensional, extended measure of poverty. The LIMTIP identifies the ”hidden” poor households with income above the standard threshold but with poverty inducing time deficit.  The starting point of the concept is the assumption that each individual has 24 hours for income-generation activities, household production, personal care and free time/leisure. Then the committed time is defined, which is the total of  “(1) required weekly hours of personal care, (2) required weekly hours of household production, and (3) the actual weekly hours the individual spends on income generation. An individual suffers from a time deficit if her/his committed time is greater than the number of hours per day” (Antonopoulos, Masterson, Zacharias 2012). There are many reasons provoking the situation. Some people may devote too much time to employment, the others to unpaid household chores.

Until now the LIMTIP has been calculated for Argentina, Chile and Mexico. In Argentina there are 6.2 % of households who are officially income poor, yet LIMTIP poverty is 11.1 %.  In Mexico 41 % of households are officially poor, but 50 % of them are poor if we take into account both income and time poverty aspects (Zacharias 2011).The first attempts of LIMTIP calculations have been done for Poland. If we divide the population into following groups: a) income wealthy & time wealthy, b) income poor & time wealthy, c) income wealthy & time poor, d) income poor & time poor. In the first and most advantageous group the majority, 65 %, were men. While among the poorest of the poor, majority, 74 %, were women.

What do feminist ec­­­onomists propose in that situation? First of all the implementation of the 3R rule which leads to the balance between paid and unpaid work provided by women and men.

1. Rethink the concept of paid and unpaid work.

2. Register the quantity of paid and unpaid work time, and

3. Reallocate the unpaid work into paid one in the market[5], which means that:

Women should work less in households and be more active in the market (paid work). This means they are to invest their resources not mostly in household chores, what they have been doing for millennia, but also in the paid work. It will surely improve their economic situation.

Besides that, it is crucial to engender economic faculties worldwide. It is high time for researchers and practitioners cooperating with them to realize that economy is not only about market and monetary phenomena, but also about domestic life and temporal dimension of it. And finally feminist economists propose to make the world more equal, more sustainably developed and greener, by starting with ourselves and our sons and daughters.

 

Notes:

[1] Homo economicus means rational and self-interested economic men. It is a person active in the market maximizing utility when being a consumer and maximizing profits as a producer.

[2] The Household Satellite Account measures the value of unpaid work performed in households of the given country. This means the value of adult and child care, household housing services, nutrition, clothing and laundry, transport and volunteering.

[3] GDP growth rate and GDP per capita are two different variables. First informs how the production changed compared to the last year production. The second informs what is the AVERAGE production per one person. The latter shows you the level of economic development (GDP per capita). The first one shows you the change in terms of the economic situation (GDP growth rate).

[4] GDP takes into consideration only market, formal and monetary phenomena and processes. Economy (in its macro and micro dimension) would better describe the reality when including also non-market, informal and non-monetary phenomena.

[5] To realize the 3R rule actions enhancing gender equality and empowering women and needed.  The examples are: consciousness raising seminars of GEM-IWG Gender & Macroeconomics International Working Group www.gem-europe.eu, summer schools organized by Heinrich-Böll-Stiftung South Caucasus like the last one in Chakvi, Georgia; conferences of IAFFE International Association for Feminist Economics; Conferences, Feminist Economics Journal www.iaffe.org, and many interesting EU projects. In the framework of the latter a Winnet Centre of Excellence has been created at the University of Szczecin, which is an the international network of researchers and practitioners for the purpose of doing and promoting policy oriented research on Gender and Economics in the Baltic Sea Region www.balticsearegion.org.

 

References:

Elson D. (2009): Gender Dimensions of the Global Financial Crisishttp://www.havenscenter.org/vsp/diane_elson

Blau F., Ferber M., Winkler A.E. (2002): The Economics of Women, Men and Work. Prentice Hall, Fourth Edition, pp. 1-5

Antonopoulos R., Hirway I. (2010): Unpaid Work and the Economy. Gender, Time use and Poverty in Developing Countries. Palgrave Macmillan, New York

Antonopoulos R., Masterson T., Zacharias A. (2012): It’s about “time”: Why time deficits matter for poverty. Levy Economics Institute of Bard College, Public Policy Brief No. 126, 2012

Piccio A. (2005): Unpaid Work and the Economy : A Gender Analysis of the Standards of Living. ROUTLEDGE, UK

Cagatay N. (2001): Trade, Gender and Poverty. UNDP, Background Paper for UNDP 2003, Making Trade Work For People

Eurostat (2003): Household Production and Consumption: Proposal for a Methodology of Household Satellite Accounts. Available at: http://tilastokeskus.fi/tup/kantilinpito/hhsa_final_report_web2003-0409.vol.3.pdf

European Commission (2010): Europe 2020: A Strategy for Smart, Sustainable and Inclusive Growth. Brussels

Johnsson-Latham G. (2007): A study on gender equality as a prerequisite for sustainable development. Report to the Environment Advisory Council, Sweden

Lofstrom A. (2009): Gender equality, economic growth and employment, Swedish Ministry of Integration and Gender Equality. Available at: http://www.arifl.regione.lombardia.it/shared/ccurl/278/82/EUstudie_sidvis[1].pdf

Klasen S., Lamanna F. (2009): The Impact of Gender Inequality in Education and Employment on Economic Growth: New Evidence for a Panel of Countries. Feminist Economics, No. 15 (3). 2009

Miranda, V. (2011): Cooking, Caring and Volunteering: Unpaid Work Around the World. OECD Social, Employment and Migration Working Papers, No. 116, OECD Publishing. Available at: http://dx.doi.org/10.1787/5kghrjm8s142-en

Becker G.S., Nashat Becker G. (2006): The Economics of Life: From Baseball to Affirmative Action to Immigration. How Real-World Issues Affect Our Everyday Life. Helion, Gliwice, 2006

Hozer-Koćmiel M. (2008): Gender mainstreaming in Economy, part II. Women’s Time Distribution and Work Value. University of Szczecin, IADiPG, Szczecin

Zacharias A. (2011): The Measurement of Time and Income Poverty. Working Paper No. 690. Annandale-on-Hudson, N.Y.: Levy Economics Institute of Bard College, October

 

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