Friday, May 24, 2019

Enhancing the EU’s economic objectives through gender mainstreaming and gender budgeting

International, EU and Member State commitments to gender equality cannot be achieved without fully integrating gender impact analysis and gender budgeting tools into the macroeconomic toolbox which guides the EU’s economic governance. The benefits have the potential to be transformative.
EIGE has made a solid economic case for how gender equality would increase the EU’s overall economic and social benefits, using a well-recognised macroeconomic model of the EU economy (E3ME). The figures are staggering. Reducing gender gaps would lead to substantial gains in employment and economic growth and would positively affect the current demographic downturn of the EU. Although a number of Member States are now taking a more accelerated route (which includes mandatory reporting of the gender pay gap, imposing sanctions on firms, legislative measures, etc.), more decisive steps and policies are needed for effective closure of the gender gaps. The integration of the unpaid care economy into macroeconomic modelling (for example using the inputs from micro simulation models or unpaid care work satellite accounts) is similarly desirable if all of the gendered aspects of European society are to be effectively captured. The economic benefits of gender equality in the EU are summarised in Table 1 below.
EIGE’s assessment of the economic case of gender equality clearly demonstrates that reducing gender inequality contributes to higher rates of economic growth, increased competitiveness and greater macroeconomic stability.25 Equality of opportunity in all markets - not only the labour market - is critical in enabling women to take full advantage of improved macroeconomic conditions. For this to happen, macroeconomic policies must consider the impact on women, particularly in light of prescribed gender roles, including women’s disproportionate burden of care work. Figure 2 below presents estimated values of contribution of unpaid household work for a selection of EU Member States, presented as share of GDP in 2015.
Despite efforts to integrate gender equality into the economic and social policies of the EU, gender analysis of macroeconomic policy remains weak. The design of policies and their budgetary implications should consider the potentially harsh short-term effects of economic austerity measures on women, in addition to other medium and longer-term effects, to avoid exacerbating gender inequalities. Gender differences should be taken into account in assessments of sources of economic growth and in examining the impact of labour and product market changes, including structural adjustments, as was the case in the most recent economic crisis.26 Systematic differences in gender roles that may lead to different macroeconomic outcomes should be acknowledged, particularly for important macroeconomic aggregates, such as private consumption, savings and investments, and risk-taking behaviour.

Macroeconomic and monetary policies need to consider the impact of EU budgetary controls in Eurozone countries most affected by the economic crisis. Cuts in public services have not only affected women’s employment but also women’s access to public services, thereby increasing women’s unpaid care work. The implementation of neoliberal policy solutions to the crisis (i.e. imposed public sector cuts) further reinforced traditional gender roles and gendered division of labour by shifting the responsibility of care for children, the elderly and persons with disabilities from the public sector to families – primarily to women.33
When economic targets and reforms are agreed without full gender impact assessments, there is a risk that these may further undermine the achievement of gender equality. In attaining some of these economic targets and reforms, policies and measures may result in restrictions enforced upon Member States, which are contrary to the goals of reducing poverty and gender inequality. For example, recommendations to reduce corporate taxation, increase taxation on housing, or flexibility in the labour market may lead to low paid and low-quality jobs, including for highly trained workers in some EU countries.34 The gendered consequences of this could take many forms, such as women being fired for getting pregnant35, or where fiscal reforms lifted restrictions/disincentives on secondary earners (often women), thus creating low paid jobs. Further research on labour market policies and gender equality policies is needed to ensure complementarity and increase the efficiency and efficacy of EU budget objectives.

25 EIGE (2017a). op cit.
26 Austerity measures must take into account the unpaid care economy and incorporate it into the measurements of the main economic indicators as well as in the formulation of the fiscal and budgetary policies that emanate from the analysis. Although not part of the main focus of EIGE’s research on gender budgeting presented here, this issue permeates almost every aspect of economic matters affecting gender equality.
33 Karamessini, M. & Rubery, J. (eds.) (2014). Women and Austerity. The Economic Crisis and the Future for Gender Equality. London and New York: Routledge; Pearson, R. & Elson, D. (2015). Transcending the Impact of the Financial Crisis in the United Kingdom: Towards Plan F-A Feminist Economic Strategy. Feminist Review, 109(1), pp. 8–30; Kantola, J. & Lombardo, E. (Eds.) (2017). Gender and the Economic Crisis in Europe. Politics, Institutions and Intersectionality. Palgrave Macmillan. 34 The European Parliament (2012) study, The multiannual financial framework 2014-2020 from a gender equality perspective, concedes that, “the context of the MFF 20142020 planning period is characterised by the interplay between long-term trends (such as ageing and technological change) and the exit trajectories of the current financial crisis. The correction of low employment participation on the part of women can be a factor in the simultaneous achievement of seemingly unrelated and possibly antithetical targets – competitiveness, equity, cohesion and economic growth” (p. 11). 35 For example, the 2013 European Commission report on the impact of the economic crisis on the situation of women and men and on gender equality policies states that the rights of pregnant women to maternity leave and benefits have been curtailed and that discrimination against pregnant women has been documented in at least four EU Member States, namely “[i]n Greece, Ireland and Portugal, Labour Inspections recorded a surge in the infringement of rights protecting pregnant women and mothers of young children during the crisis” (p. 17)

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