Gendered costs of austerity: The effects of welfare regime and government policies on employment across the OECD, 2000–13

• Author: Ian P. McMANUS,Sidita KUSHI
• Published date: 01 December 2018
• Date: 01 December 2018
• DOI: http://doi.org/10.1111/ilr.12121

International Labour Review, Vol. 157 (2018), No. 4

Copyright © The authors 2018

Journal compilation © International Labour Organization 2018

* Tufts University, email: Kushi.s@husky.neu.edu. ** London School of Economics and

Political Science, email: i.mcmanus@lse.ac.uk.

Responsibility for opinions expressed in signed articles rests solely with their authors, and

publication does not constitute an endorsement by the ILO.

Gendered costs of austerity:

The effects of welfare regime

and government policies on employment

across the OECD, 2000–13

Sidita KUSHI* and Ian P. McMANUS**

Abstract.

This article proposes a thorough analysis of the gendered impact of

government policies applied during the Great Recession on unemployment across

28 OECD countries following an empirical estimation using random effects model-

ling with data from 200 0 to 2013 to test the inuence of welfare systems. Results point

to a signicant effect of welfare regime even beyond the crisis, primarily through

social expenditure levels and public sector employment dynamics, which mainly af-

fect women. The detailed policy analysis highlights the need to look for alternatives

to austerity policies, and the authors conclude with some suggestions in that regard.

The global nancial crisis, which began in the autumn of 2007 and ush-

ered in the wider global economic crisis, has had a profound impact on

labour markets across advanced economies, resulting in dramatic increases in

unemployment and economic instability in nearly every country. While the

negative effects of the crisis on domestic economies have been widespread,

distributional outcomes have varied considerably among different labour mar-

ket groups, particularly between men and women. However, although consid-

erable attention has been paid to the former, less attention has been given to

the effects of this downturn on male and female employment. Expanding on

our previous work on this subject (Kushi and McManus, 2018), the aim of this

article is to further analyse the gendered impact of government policies on

labour market outcomes across the member countries of the Organisation for

Economic Co-operation and Development (OECD). We take into account

women’s position within welfare systems and labour market structures, offer-

ing evidence of the inuence of welfare systems on those gendered outcomes

even beyond times of crisis. We suggest that austerity policies threatened to

International Labour Review558

reverse progress made on gender equality in the years running up to the cri-

sis, providing a strong argument for identifying alternative policies in order to

improve crisis responses to ensure that all groups in society benet equally.

The remainder of the article consists of four sections. In the rst, we ex-

amine several important strands of the literature, including welfare capitalism

and feminist political economy, in order to develop a theoretical framework

that acknowledges the effects of institutionalized gender differences on em-

ployment outcomes. In the second section, we present estimations of a ran-

dom effects panel model of 28 OECD countries over the course of 14 years,

from 2000 to 2 013, in order to test the signicance of welfare systems on male

and female employment rates. These ndings help to provide empirical evi-

dence of the signicance of these systems on gendered employment outcomes

even beyond times of crisis. The third section examines gender outcomes at

different phases of the crisis and critically explores how policies adopted by

national governments, such as social spending cuts and public sector reforms,

affected female and male employment. Most notably, scal austerity had dis-

proportionally negative effects on women. In the fourth section, we present

our conclusions and identify recommendations for more comprehensive gen-

der assessments of domestic recovery policies.

Literature review: Welfare regimes,

social outcomes and gender

The global nancial crisis has raised a number of pressing questions regarding

the impact of economic downturn on gender equality and female workforce

participation across countries. To what extent is female workforce participation

vulnerable to recessionary factors? Have the distributional effects of the eco-

nomic crisis fallen evenly across genders? How have specic government pol-

icies affected women’s employment and gender equality outcomes? To address

these questions, and expanding on our previous work (Kushi and McManus,

2018), we bridge literature on capitalist welfare regimes, feminist political econ-

omy and the nancial and economic crisis in order to build a theoretical ap-

proach that acknowledges the effects of institutionalized gender differences

and allows us to understand the full impact of the crisis.

Within comparative politics, there is a well-established literature on the

effects of welfare systems on social outcomes (Pierson, 1996 and 2001; Esping-

Andersen, 1990 and 1999; Häusermann and Palier, 20 08; Thelen, 2012). It is

argued that the distinctive historical and institutional characteristics of these

systems dene the types of policies and levels of social spending adopted by

States to inuence who has access to social benets, and to shape govern-

ment strategies in response to economic challenges (Bonoli and Palier, 20 00;

Scharpf and Schmidt, 2000; Palier and Thelen, 2010). In addition to providing

general social support, many hypothesize that welfare systems inuence the

role of women in the workforce and society both directly and indirectly (Orloff,