By Sunidhi Gupta

Abstract

It is common to think that macroeconomics policies are gender neutral but, due to differences in market and non-market roles of the economy, economic policy decisions have a varied impact on men and women. Budget cuts that diminish social spending, for instance, may lead to an increase in demands placed on women’s unpaid domestic labour but trade liberalization may have a detrimental effect on women’s employment in situations where they are overrepresented in industries that compete with imports such as agriculture and food crops. However macroeconomic policies don’t pay much attention to this which makes gender equality difficult. This article aims to go through the challenges and recommendations on how to deal with them.

Macroeconomic Policies include economic aggregates in the form of monetary and fiscal policies which are considered gender neutral but this is not the case because all such monetary, fiscal or trade policies impact genders in different ways. Studying them through a gendered lens is important to achieve gender equality because they influence the demand for women’s unpaid labour, opportunities for paid work, and the resources available for policies that try to lessen inequalities. The current macroeconomic policies do not prioritize equality and women’s rights due to several factors.

FACTORS LEADING TO GENDER INEQUALITY IN POLICIES

Macroeconomic policies often fail to consider socio-economic rights, distributive outcomes and gender equality. Indeed they frequently concentrate on smaller sets of objectives such as increased economic growth rates or reduction in inflation to extremely low levels. Since there is a focus on such narrow goals, human development, well-being and enjoyment of rights are not given much importance. The policies that particularly govern economic growth, assume that they will automatically reduce gender inequalities. However, some reports reinstate that economic growth in itself is not enough to achieve this. Most countries focus their monetary policies on keeping inflation rates low by increasing the interest rates which slows down the economy. Gender inequality persists in cases where women work in industries that are more susceptible to declines in household consumption. Women are more likely to lose their jobs if the economy slows as a result of such monetary policy decisions.

Another factor which leads to gender inequality is that the macro-economic policies do not count the time that is spent doing household work for the calculation of GDP. Data states that the percentage of unpaid work in GDP is between 10 to 40 per cent of the GDP for various African countries or South American countries. Even though this labour is unpaid, there are still costs associated with it, most of which are incurred by women and girls in the form of forgone opportunities and wages. Macroeconomic policies encourage the undervaluation and marginalization of women’s labour because they fail to take these costs into account. Other reasons for the underlying inequalities in macroeconomic policies are that there is a bias in the classification of public and private investments where there are similar investments but some are accounted for in macroeconomic statistics while others don’t. There is a  lack of sufficient resources which finance the policies relevant to gender equality. Governments have discretionary authority over the resources used to execute laws promoting gender equality and other social objectives. In recent years, efforts to reduce budget deficits have placed a focus on spending cuts, which frequently and disproportionately harm women.  Finally, the most important factor for the existence of gender inequality is the lack of participation, representation, transparency and accountability of women while policies are formulated. 

As all these factors indicate the weight of macroeconomic policies, they tend to exclude the importance of education and formal knowledge. Increased rates of education tend to affect education while decreased rates benefit them. Therefore, it is imperative that to reduce gender disparities in education and health, sound macroeconomic policies that include an adequately valued exchange rate are essential.

DEALING WITH SUCH INEQUALITIES IN POLICIES

Lewis and Lockheed have suggested two avenues by which the macroeconomic policies can cater to the excluded set of population, especially the girls. The first of these is to improve the quality and accessibility of education by making fair education policies, expanding schooling options as well and improving the physical environment and instructional material for education. The second avenue looks towards the provisions of incentives to the household for educating girls and reducing gender disparities. There should be provisions for conditional cash transfers as well as offers of scholarships and stipends for girls. There should be an introduction of feeding programs in schools. Some of them have been implemented like mid-day meals etc. but there are a lot of other policies to be worked on.

Another way to deal with this can be gender-responsive budgeting. Gender-responsive budgeting examines the distribution of public funds, the tax code, and the provision of public services to determine how budgetary decisions affect different genders. A thorough methodology involves sex-disaggregated analysis of the recipients of various government spending categories, the impact of tax policy, and the recipients of public service delivery. A gender analysis of national budgets should ideally also look at fiscal policy overall, including total spending, total revenues, and financing of deficits.  

Additionally, there should be a human-rights approach which should be used to make macroeconomic policies of an economy. The main aim of the human rights-centric approach should be to provide alternatives to GDP growth, low inflation, and static efficiency and promote gender equality rather than solely to increase productivity, efficiency, or return on investment. They should provide a set of moral standards for developing and assessing economic policies that emphasize the duties of governments. They should be derived from global accords and linking a set of domestic and international procedures to the commitments of governments to hold them accountable. It also requires an approach to economic governance that is democratic and inclusive.

RECOMMENDATIONS

There are some recommendations at the international level for reducing gender disparities by changing the macroeconomic policies. Some of these are to assess how the government regulates taxation, expenditure, and monetary policies to affect gender equality. Governments should address gender disparities when they are discovered and redirect public funds and spending priorities to initiatives that advance gender equality. There should be a restructuring of the tax code. Funds should be produced from undertaxed industries like the banking sector or natural resources might increase fiscal headroom and prioritize capital controls. Macroprudential policies advance economic stability and avert financial crises, which disproportionately affect women. The inclusion of women’s voices in economic decision-making, and institutions that formulate and implement macroeconomic policy’s transparency, degree of participation, and accountability should be increased. Also, an alternate framework for developing and assessing economic policy decisions that encourage gender equality should be provided by a rights-based approach.

Thus, promoting sustainable and gender-responsive development requires a new macroeconomic policy strategy that takes issues of gender equality seriously. By putting these concepts into practice, macroeconomic policy-making can be changed to become more accountable, equitable, and centred on positive consequences for people’s lives. 

Author’s Bio

Sunidhi Gupta is a student at Jindal Global Law School in her third year of BA. LLB (Hons.).

Image Source: https://www.parisschoolofeconomics.eu/fr/formation/summer-school/the-economics-of-gender/