GENDER BUDGETING IN PRACTICE Prague November 8, 2007 What can we expect from gender budgeting? Annamaria Simonazzi Fondazione G. Brodolini and University of Rome “La Sapienza”

2 Equality, efficiency, and transparency The integration of a gender perspective into macroeconomic policy may have both an equality and an efficiency dimension Macroeconomic policy can affect gender equality e.g. Choice between tax cuts or increase in services Gender inequality in turn can affect macroeconomic outcomes e.g. Lack of services affects women’s participation to the labour market, the size of the market economy, the tax-base, the sustainability of service provision, and long run sustainability

3 Transparency and correct calculation of social costs What does not enter (explicitly) in the budget The budget appears as a gender-neutral policy instrument It ignores the different socially determined roles, responsibilities and capabilities of women and men: for instance the fact that there is an unpaid economy in which women do most of the work of caring e.g. Monetary transfers versus service provision (hidden costs) A gender-aware budget statement National, regional and local levels of government have to strive for the effective achievement of equality between women and men in their budgetary policies.

4 The Italian experience In Italy sperimentation has been exclusively at the local level (Rosselli) Driving forces: awareness raising groups (women experts); Increasing demand from civil society groups ; Political will; Availability of funding for pilot projects (EU); Committed individuals inside public administration New political coalitions may provide the political will for Experimenting with the GB at the national level Move on from pilot projects at the local level to implementation in regular administrative procedures and coordination of the various local experiences

5 The national budget Two possible approaches: Address specific items (revenues and expenditure) to evaluate their gender impact Problems: complex interactions between different measures cutting across different ministries (e.g.: extension of women’s retirement age for pensions benefits) Address the overall design of budget policy Problems of resources and political will Problem: How to change the budget stance, while keeping within the budget constraint The change in the composition of the various items can be obtained either by switching items of receipts and expenditure (e.g. save in women’s pensions and use the proceeds to increase public services), or by posting both higher expenditures and receipts, while keeping the budget balanced.

6 Steps for a gender appraisal of the budget: needs assessment (including need for time) Democratization of budget policies: open up budget process to civil society to assess needs: transparency and participation analysis of the impact of expenditure and revenue (assessment of beneficiaries by gender) Involvement of outside government actors to analyse possible impact (researchers and experts) Auditing: evaluation of achievements impact of budgets on unpaid work and time use: assessment of “invisible costs” (some changes in the organisation of services are actually a “transfer of costs” rather than savings) Methodology

7 We shall consider two policy objectives: to increase the female activity rate (Lisbon strategy) to tackle the problem of the ageing of population The increase in the female activity rate To respond to emancipation demand: Social and cultural factors: change in family roles (equity) Support to growth (efficiency) How can the budget (fiscal policy) help in the achievement of this goal? Two types of interventions: measures that work more directly on the target variable, and measures that act indirectly on the context (see point 2 on care) Some instances from the Italian Financial Law

8 Direct measures: incentives Three measures have been suggested: 1. reduce taxation on new hiring of women (this measure has been already included in past year financial law for newly hired female workers in obj. 1 regions, and it has been maintained in this year financial law) 2. reduce taxation on dual earners families’ income 3. a tax credit for working mothers (introduced in this year financial law). The first measure works on the demand for labour: by reducing the taxation on female labour, it should make the hiring of female workers cheaper, thus increasing demand; Measures under 2 and 3 should encourage the supply of labour: by reducing the taxation of the second income, or by providing a tax credit to working mothers, they make paid work more profitable, thus providing an incentive to increase labour supply.

9 Coeteris paribus assumptions Is the analysis of the direct impact of these measures enough in order to say that they make women unequivocally better? No. In fact, even if these measures are successful in increasing the number of women working in the market, other things equal, their burden in terms of total amount of hours of work (paid and unpaid) will increase (what we called the “invisible costs”). Thus, in order to evaluate the global effect on women’s well-being we need to consider the interaction of these various aspects. That is, in order to evaluate the gender impact of any measure affecting female paid work, we need to take into account also what happens in the field of unpaid work (paid work and re-conciliation). This leads us to the other aspect of the budget, which is related to expenditures and provision of services, that is, more directly related to the unpaid work for care (still mostly female).

10 Taxes versus services Women may not be unequivocally in favour of tax cuts, if this requires expenditure cuts to keep a balanced budget Let me give one more example taken from the current debate on the Italian financial law Italy is ageing rapidly and this poses two urgent problems: the long term sustainability of the pension system the long term sustainability of the Italian model of long-term care for the elderly – or more generally for severely dependent people – which is still fundamentally based on the family Increasing awareness of the urgency of these problems has prompted a proposal to increase the retirement age of women (at present fixed at 57) and raised a debate on the need for a national fund for dependency.

11 The issues from a gender perspective What are the consequences on women’s well-being of a gradual extension of the retirement age for women from 57 to 62? Should the savings be used to finance a national fund for dependency (as against their use to ensure the financial sustainability of the pension system)? How should this fund be spent in order to reduce the burden of reconciling paid work and care? The extension of the retirement age will impact severely on the provision of (unpaid) care, which is now performed to a large extent by retired women. Thus keeping women longer in the labour market might interfere with the supply of care, or put an extra-burden on women.

12 Monetary transfers or provision of services? Should the fund be used to provide more public services for care, we could achieve a double goal: to partly relieve women from their care chores, thus providing a stimulus to enter paid work, and to increase the demand for care labour on the regular market, that is the demand for female work, thus supporting female employment (the “Nordic” welfare model). (Unconditional) monetary transfers, viceversa, could simply perpetuate the care regime based on the family (and hence on women), while providing them with care allowances (that family could choose to spend on the black market for care).

13 Monetary transfers or provision of services? The choice is a political one, but it must be supported by a gender-conscious analysis of its possible impacts on gender equity and, as argued at the beginning, on overall efficiency. Since care, as most public services, is organised and provided at the local level, the evaluation of these measure from a gender perspective implies extending and coordinating the analysis at the local (regional, municipal) levels.

14 Conclusions Need to make clear the gender implications of the budget Democratization of budget policies: open up budget process to civil society to define the objectives, in a gender equality perspective Involvement of government and experts to assess the likely impact Make sure that analysis translates into policy changes and results Auditing: to evaluate the results Ensure the interplay and coordination of different political levels: European, national, regional and municipal levels By making explicit the total costs to society of policy decisions the integration of gender in the budget appraisal can thus respond to equity and efficiency criteria.