Gendering Macroeconomic Analysis and Development Policy: A Theoretical Model for Gender Equitable Development, CWE-GAM Working Paper Series 19-03

Onaran, Özlem; Oyvat, Cem and Fotopoulou, Eurydice. 2019. Gendering Macroeconomic Analysis and Development Policy: A Theoretical Model for Gender Equitable Development, CWE-GAM Working Paper Series 19-03. Working Paper. Care Work and the Economy Project, Washington DC. [Report]

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Abstract or Description

The aim of this paper is to develop a feminist post-Keynesian/post-Kaleckian demand-led growth model to theoretically analyse the role of labour market policies and fiscal policies on growth and employment.

We develop a three-sector gendered macroeconomic model with physical and social sectors (health, social care, education, child care) in the public and private market economy, and an unpaid reproductive sector providing domestic care. The production in the market economy is performed by male and female paid labour and capital.

On the demand side, we model behavioural equations for household consumption as a function of male and female wage income and profits. Consumption by the households can be on social services and the rest of the economy. We model private investment as a function of the profit share, GDP, and public debt to GDP ratio, which in turn affects the interest rate. Exports are a function of real unit labour costs (wage/productivity) and the GDP of the rest of the world. Imports are a function of real unit labour costs and the GDP. Real unit labour costs are the inverse of the profit share. Taxes are collected on wage and profit income. We model three types of government spending are modelled: In addition to physical infrastructure, which is traditionally recognized as public investment, we define current public spending in health, social care, education, and child care as public social infrastructure investment. The rest of the current government spending is defined as government consumption expenditure.

On the supply side, productivity in the physical sector is exogenous in the short run and endogenously changes in the long-run, and is a function of public physical and social infrastructure and current spending, household spending in the social sector, unpaid domestic care labour, wages of men and women, and growth.
Employment (in hours) is determined by output and labour productivity. Female and male labour supplies depend on wages, benefits and social infrastructure.

Demand has an effect on growth both in the short and the long run, as the model builds on realistic structural features of a capitalist market economy operating with excess capacity and involuntary unemployment. Gendered structural features regarding both the paid and reproductive unpaid labour such as gendered sectoral composition of employment, occupational segregation, institutions, and social norms regarding gendered consumption behaviour as well as the distribution of unpaid domestic care labour affect growth, productivity and employment.

The model aims to provide a theoretical basis to analyse the impact of gender equality and public spending. We provide a theoretical analysis of the effects on GDP, productivity (GDP per employee) and employment of men and women in both the short run and long run as a consequence of i) the impact of fiscal policies, in particular public spending in social infrastructure, and ii) decreasing gender wage gaps, in particular in the female dominated social sector. This theoretical analysis provides a basis to further analyse the impacts of i) particular paths to closing gender wage gaps, e.g. via an upward convergence in wages, i.e. an increase in both male and female wages with a faster increase in the latter; ii) other types of fiscal spending, and iii) taxes on labour and capital income.

Crucially, a change in gender pay gap or the functional distribution of income between wages and profits or public spending in social vs. physical infrastructure will have both demand side effects in short- and long-run and supply side effects in the long run and affect output, productivity and the employment and income of men and women.

Item Type:

Report (Working Paper)

Identification Number (DOI):

https://doi.org/10.17606/6atw-hq68

Keywords:

gender, macroeconomics, inequality, development, growth

Related URLs:

Departments, Centres and Research Units:

Institute of Management Studies

Date:

April 2019

Item ID:

27774

Date Deposited:

18 Dec 2019 09:29

Last Modified:

29 Apr 2020 17:23

URI:

http://research.gold.ac.uk/id/eprint/27774

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