Budgeting with Women in Mind
| Author | Janet G. Stotsky |
| Position | Deputy Division Chief in the IMF's African Department. |
Why using the budget to empower women makes good economic sense
When leaders in developed and developing countries alike ponder ways to boost growth, reduce inequality, and improve living standards, the enduring battle of the sexes is most likely the last thing on their minds. But they might want to think again.
Gender differences have long been incorporated into economic analysis at the microeconomic level in such fields as public finance, labor, and development economics. For instance, different migration patterns for men and women in developing countries from rural to urban areas have long been a staple of models in development economics and contribute to our understanding of the overall development process. But more recently, the focus has turned to the potential macroeconomic implications of gender differences in behavior-both for understanding economic developments and for formulating sensible policies (Grown, Elson, and Cagatay, 2000). Gender differences in behavior that are the outcome of private decisions or reflect the influence of public policies may lead to different outcomes in the macroeconomy, with implications for aggregate consumption, investment, and government spending and, hence, national output. Yet fiscal policies are rarely formulated to take account of gender.
Although much of the work is innovative, the literature is incomplete in two areas. First, it does not always draw out the macroeconomic implications, even when drawing on microeconomic evidence on gender differences in behavior. Second, because it is somewhat disjointed from the broader macroeconomic literature, scholars working in either field often fail to fully recognize each other's contributions. Two recent IMF studies focus on the interaction between gender and macroeconomics and gender and budget processes. This article gives a snapshot of both these topics.
Women remain disadvantaged, especially in the poorest countries. Their opportunities for educational, social, and economic advancement are usually markedly inferior to those of men, and they often face barriers in gaining access to good education and health care for both economic and cultural reasons. The end result-in low and some medium human development countries-is a lower level of education attainment for girls than boyas and a lower life expectancy for women relative to men that would be expect (see Table 1). The so-called missing women phenomenon, where there are fewer women than would be expected on the basis of biological norms, is also indicative of the continuing bias against women. In the job market, women face lower wages and fewer job opportunities, and they continue to encounter discrimination in financial markets. Women also usually have fewer opportunities to participate in public decision making.
Table 1 Gender inequalities persist
[GRAPHICS ARE NOT INCLUDED]
The eight UN Millennium Development Goals (MDGs)-which were adopted in 2000 to sharply reduce poverty and improve living standards by 2015-explicitly link economic progress to creating equal opportunities for all men and women. One of them, MDG3, calls for redressing gender disparities and empowering women (see article, page 6).
It is not that obvious how to go about incorporating gender differences in economic behavior and policy outcomes into macroeconomic policymaking. After all, in macroeconomics, one typically looks at the aggregate, or overall, economy. But economists are now taking a much stronger interest in how gender affects aggregate income as well as key components of overall economic demand, focusing on household decision making.
Although the evidence about the relationship between women's inferior status and growth is not fully conclusive-measuring the degree of inequality or disadvantage in comparison with men is a complex topic in itself-research findings suggest that countries that take steps to increase women's access to education, health care, employment, and credit, thereby narrowing the differences between men and women in terms of access to economic opportunities, increase their pace of economic development and reduce poverty (Klasen, 2007; and World Bank, 2001).
Consumption . One of the best-documented findings, with evidence spanning many developing countries...
To continue reading
Request your trial