Feminist economics as better economics! Women’s Budget Group 30 January, 2015 Susan Himmelweit

Plan for the morning Gender budgeting is the practice Feminist Economics as the theory Let’s do a bit of theory first!

The main assumption of feminist economics Gender relations are an important aspect of any economy And gender is structural – differences in men’s and women’s roles not chance – but an integral part of how the economy runs – Changes in economy as conventionally understood can affect gender relations and vice versa Gender therefore needs to be taken account in any understanding of the economy – Much mainstream economics, and also much not-so-mainstream economics, is “gender blind” – Should instead start by assuming that everything has a gender dimension Feminist economics is therefore not economics for women but better economics

The scope of feminist economics “ The economy” as traditionally understood is dependent on many activities that lie outside its scope Feminist economics is the study of all forms of “provisioning” (Julie Nelson) The survival and reproduction of people and society as a whole requires: – not only paid employment but unpaid domestic work too – not only production for the market but for direct use within families and communities too – not only the production of material goods, but everything that people need to grow and flourish, including the provision of care

The politics of feminist economics Economics that focuses on creating gender equality Traditional economics is ideological and perpetuates inequality because – it normalises men’s lives and ignores much of what women do Though in practice also provides an incomplete picture of what affects men’s lives – since men’s existence also depends on unpaid work, production for direct use and care – and many men are involved in these activities too Even if women and feminist economics are needed to point that out!

Key differences between feminist and mainstream economics Feminist economics Doesn’t just analyse market relations – other relations just as important – there’s unpaid work too – cannot assume people behave outside the markets just like they do within it Household is not treated the basic unit of the economy – Household members can have different interests – People live in a number of different households in the course of their lives Rejects notion that people have preferences that are independent and unchanging – Social norms matter and they change – Maximising choice doesn’t solve everything Rejects a model of work based on the production of physical things – Characteristics of care provision provide an alternative model that applies to much other work too – Need to redefine what is meant by infrastructure and investment

Analysing market relations isn’t enough Time spent on unpaid activities affects what else people can do with their lives – Cannot assume all workers are wage-workers, and certainly not all their lives – Women’s lives tend to be more varied in this respect than men’s And what else the economy can do – also the revenues that can be raised by governments Unpaid work within households is equivalent to about 1/3 to 1/2 of GDP - though not counted in it The total economy can be growing faster or slower than that measured by GDP – Faster in recessions when people are losing their jobs and then doing more unpaid work – Slower when people are moving into paid employment

Analysing market relations isn’t enough Need to take account of potential effects of policy on unpaid as well as paid work and how they affect each other Cannot assume people behave outside the market just like economists say they do within it Relationship between paid and unpaid activities is not just one way – Cannot assume that unpaid work adjusts around changes in the economy eg if women go into paid employment that how people are cared fro will seamlessly adjust – Cannot assume patterns/norms of unpaid work won’t change eg if women go into paid employment the division of labour in unpaid work will stay the same Unpaid activities are neither infinitely flexible and available, nor just an unchanging background to the paid economy

Households are not individuals Mainstream economics and much policy making takes the household as an indivisible unit – Eg household means testing – Couples asked to “choose” who receives payments Decisions made by different members of the household are not necessarily consistent Interests of members of same household may differ Resources are not necessarily shared equally within households Need to recognise: – People do make decisions in the context of their household/family – This is not same as saying that in doing so they are all pursuing the same goals

Households are not individuals People live in a number of different households in the course of their lives So what is “best for the household” at point in time may not be best for all individuals within it Eg pension planning based on the couple leaves many widows in poverty US research shows who makes financial decisions may matter a great deal to outcomes in the long-run – Need to consider impacts on both households and individuals Analysis at both levels can be useful – Need to take a life-course perspective for individuals – In particular, women are often the ones who sacrifice their own longer term interests to “those” of their household may not be served well by policies assuming unified interests, equal sharing or focused too much on household's current circs

People don’t have independent and unchanging preferences Norms matter People are not “separated selves” with fixed preferences – Identities and wishes are developed in society Theory of how norms are formed and influence behaviour key – Cannot be reduced to individual self-interest either simply constraints or preferences “Choice” is not a reliable guide for feminist policy advocacy – “what women want” depends on current options – eg part-time work in UK because childcare so expensive

An example: Gendered norms about how to care for pre-school children reinforce, and are reinforced by, gendered economic opportunities As those economic opportunities change, so do those norms Changing care norms: UK

People don’t have independent and unchanging preferences Economic change can be speeded up or slowed down by current norms (and vice versa) – policies that depend on behavioural change may take time to have effect Policies that promote “choice” – tend to reinforce existing norms Often a way just to shift responsibilities Positive feedback between norms, behaviour and policy explains divergence between countries – Neither economics nor norms alone explains differences between countries – Policies may not be immediately transferable Eg policies that rely on private philanthropy in societies used to having a welfare state

How physical things are produced is not a good model for economics Analysis of care is arguably the most distinctive contribution of Feminist Economics Care has some characteristics that are typically ignored by economists: – Both the supply and demand for care are influenced by social norms, concerning: people’s needs for care how and by whom that care should be delivered – care involves a personal relationship between provider and receiver, that makes raising productivity difficult affects the skills, training, pay and conditions of care workers – carers’ motivations are intrinsic to the quality of care making the quality of care hard to measure or evaluate from outside Many other goods share these characteristics to a greater or lesser extent – Feminist economic analysis of care useful more generally – Feminist economics as better economics

Care and care norms Care helps people do what others can do unaided But what is thought essential for people to be able to do is influenced by “ care norms” that: – differ across societies – Are gendered within societies And responsibilities for care provision also: – differ across societies – but tend to be highly gendered within all societies women are expected to take more responsibility and provide more unpaid care than men within families within paid work care tends to be seen as more suitable work for women than men That norms about care provision are gendered is seen by many feminists as the fundamental explanation of gender differences throughout society 15

Care as a personal relationship: implications for productivity and costs Trends in the production of other goods and services – rising productivity – outsourcing have applied less to care. Why? In many industries labour is just an input; then – labour-saving techniques can lead to productivity growth – and so costs generally rise less fast than wages But in other industries, “those in which the human touch is crucial”, labour is the effective output too; then – little scope for raising productivity through introducing labour-saving techniques (without reducing quality) – labour costs rise in proportion to wages Products of second type of industry become relatively more expensive (Baumol’s “cost disease”) 16

Baumol’s example: playing a string quartet In playing a string quarter, neither cutting the number of players nor playing faster can raise the productivity of labour 17

Productivity and costs in care Care is an example of the second type of industry: – Care is a hands-on personal service that involves building a relationship; – Cannot in general reduce time and increase productivity while retaining quality; Cannot spread a relationship over too many people Indeed staff/client ratios taken as index of quality – labour costs make up nearly all the cost of care So total costs of care rise as fast as wages The cost of care of a given quality, like listening to live string quartets, become more expensive relatively to other goods Leading to governments’ obsession with containing the costs of care even before the current crisis 18

Current (unsustainable) systems of care provision Most care is provided “free” by families – in practice paid for by the opportunity costs of unpaid carers, mostly women Care also available on the market – at rising costs despite care workers low pay Limited state budget for helping where the family and market can’t provide: – costs kept down by restrictions on who gets such help, how much help and its quality – Increasingly through the market – Such market solutions used to save costs and promote “choice” 19

Such systems depend on: Huge amounts of unpaid care being given mostly by women Low pay in paid care sector Gender norms and opportunities that make these possible: – women more inclined to take on unpaid caring roles than men (in most age groups) – women’s other opportunities more limited than men’s Inequality in labour market and in care intertwined: – makes equal sharing within families expensive – reinforces gender norms – slows down change but has not eliminated it None of this can be taken for granted – Current pressures are making such systems unsustainable 20

Unsustainability of current care system Rising need for care: – Demographic pressures Falling availability of unpaid care – Rising employment levels of women Employment opportunities for women outside care industry: – so wages in care cannot lag far behind other industries recruitment and retention problems in care industry Rising costs of care provision coupled with rising inequality means proportion who can pay full care costs themselves falls Governments' unwillingness to allow state spending on care to rise to meet rising care need Changing gender norms! 21

Nevertheless in the crisis Women have born the brunt of austerity Cuts have affected women’s: – jobs – employment opportunities – incomes – unpaid time more than men’s Feminist economics can help – expose this – provide alternative strategies

An example of WBG analysis:

And another

And some more

Key differences between feminist and mainstream economics Feminist economics Doesn’t just analyse market relations – other relations just as important – there’s unpaid work too – cannot assume people behave outside the markets just like they do within it Household is not treated the basic unit of the economy – Household members can have different interests – People live in a number of different households in the course of their lives Rejects notion that people have preferences that are independent and unchanging – Social norms matter and they change – Maximising choice doesn’t solve everything Rejects a model of work based on the production of physical things – Characteristics of care provision provide an alternative model that applies to much other work too – Need to redefine what is meant by infrastructure and investment