Gender economics in macroeconomic research
By failing to properly take gender interactions into account in research we are limiting today's science. EU-funded research is revealing how economic trends affect genders differently, as for example in the COVID-19 crisis. It is also looking at how the interaction between genders impacts macroeconomic trends.
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There is a growing awareness that the failure to take sex, gender and family interactions into account in research has the potential to limit the benefits for today’s science. Most scientific research does not consider sex or gender as variables and treats the male standard as the norm, resulting in potentially inaccurate or incomplete outcomes.
The EU’s six-year GENDERMACRO project, funded by the European Research Council, addressed a number of current topics of interest in macroeconomics. It explicitly integrated gender and family dynamics into the process of evaluating the impact on macroeconomic outcomes, as well as on the results of selected public policy interventions.
‘Most macro models are traditionally based on one gender model, often modelled according to men, so the starting point for our research was that there are gender differences and that these play a role for the aggregate economy,’ explains Michele Tertilt, the project’s principal investigator and professor at the University of Mannheim in Germany.
‘The family is a foundational unit of society and if we do not take account of interactions within families we risk coming to the wrong conclusions.’
‘Men and women generally take different roles in both society and the family with regard to issues such as child rearing, education, human capital, long-term investments, etc. We wanted to look at the interactions within families husband/wife but also parent/child interactions and consider to what extent these are important to the economy as a whole,’ says Tertilt.
To analyse this hypothesis, the project built dynamic macro-style models with explicit gender differences. The emphasis was on non-cooperative models of spousal interactions. Using game theory to model family behaviour enables analysis of topics for which cooperation in the family seems questionable (e.g. domestic violence).
By introducing these new models of spousal interaction into macroeconomic models GENDERMACRO was able to provide new insight on a range of applied research questions.
One of the areas examined was the role of female empowerment in economic development and whether transferring money, through development aid, specifically to women is of overall benefit to the economy. The results of the research showed that this is not necessarily the case but depends on the stage of development of the economy in question.
Another area investigated was the impact of the economic cycle on domestic violence. Thanks to detailed data from the Swedish medical system, the GENDERMACRO project confirmed that domestic violence increases during economic recession and decreases during booms. Tracking additional indicators (such as alcohol abuse and depression) enabled a better understanding of the possible mechanisms behind this.
GENDERMACRO also analysed the HIV epidemic in sub-Saharan Africa and the role of gender and family in influencing the impact of public policies introduced to fight the disease. ‘By taking account of behavioural adjustments and indirect impact, we found some quite surprising results, including the existence of thresholds that must be reached for certain interventions to have a positive effect,’ says Tertilt.
Indirectly following on from the GENDERMACRO project, Tertilt and her colleagues applied their approach to the ongoing COVID-19 pandemic. Their research provides some initial results on how this economic downturn is going to affect women and men differently. It also indicates what the main long-term repercussions for gender equality may be in the areas of employment, telework, childcare, home-schooling, employment flexibility, etc. both during the downturn and in the subsequent recovery.
The employment drop related to social-distancing measures has a large impact on sectors, such as care in the community and the hospitality industry, with high female employment. In addition, closures of schools and daycare centres have massively increased childcare needs. This is having a significant impact on women and the effects of the pandemic on working mothers are likely to last for some time.
However, beyond the immediate crisis, there are factors which may ultimately promote gender equality in the labour market. For example, many fathers are now having to take primary responsibility for childcare, which may erode the social norms that currently lead to an unbalanced distribution of the division of labour in housework and childcare.
All of these results reveal that taking gender and family into account in research is important for the quality of research and, further down the line, the quality of public policy interventions. ‘We need to take gender and family out of the black box and integrate it into research so that we can have better-informed science and better-informed policy,’ stresses Tertilt.