The Economics of Gender

1. The Economics of Gender Program Magister Kependudukan & Ketenagakerjaan Universitas Indonesia EkonomiKependudukan, 13 Desember 2011

2. Outline • The origin of gender difference • The economics of gender • Blinkers in economic theory • Gender difference in labor market • Example of gender bias policies ELP & DHA

3. The origin of gender difference ELP & DHA

4. Gender vs Sex • Sex: perbedaan secara biologis • Laki-laki (male) vs perempuan (female) • Gender: Characteristics attributed that are socially (and psychologically) associated with being female and male • Feminine • Masculine ELP & DHA

5. Gender: Nature or Nurture? ELP & DHA

6. Theories of Psychosexual Differentiation:Nature or Nurture? Sumber: http://www.flyfishingdevon.co.uk/salmon/year3/psy364gender-nature-nurture/psy364gender-nature-nurture.htm#nature_nurture

7. Sumber: http://www.flyfishingdevon.co.uk/salmon/year3/psy364gender-nature-nurture/psy364gender-nature-nurture.htm#nature_nurture

8. The economics of gender ELP & DHA

9. What is economics of gender ? • Integrating gender concept into economic theory (e.g. time allocation) • Interaksi agen ekonomi dalam keluarga, perusahaan, pasar, berbeda antara laki-laki dan perempuan • What perspective: economic approach to gender differences ELP & DHA

10. Economics Perspective & gender differences • Prinsip ekonomi (does it apply to everyone?): • Decision making under constraints (scarcity) • Humans are asumed to be rational, imply: • Consistent: act the same way in identical situation • Foresight: consider long run implications and indirect effects on their behavior • Debate over sexual division of labor: biologically or culturally determined (social construction) • Economic principle: max own utility-altruism? (family utility?); father’s choice vs mother’s choice (mis: susu anak vs rokok) ELP & DHA

11. Gender Blind Macroeconomic policy is gender blind: • Pursue aggregate goals, blind to differential impacts on all individuals (by gender, sector, location, race, religion, culture, etc) • The omission of gender concerns: • Generates policy with inefficient macro-level outcomes • Give unpredicted micro-level consequences for women, children and families ELP & DHA

12. Macro policy - Gender Blind • Globalization: macro policy assign primary importance to: international trade (export-led development strategy), economics liberalisation, operation of free markets • All economic agents are affected by these macroeconomic policies; but: Women & children are vulnerable to these policies. • Old days: Women didn’t enter the market, rely on cash povided by men (?) • Resources within subsistence economy, then become more subject to macro policy ELP & DHA

13. Macro policy - Gender Blind • Basic needs (health and education) formerly met within the household, move into public sector met by the government • Basic needs became more monetize, sophisticated – expensive • Facts: • In many developing countries, under externally imposed structural adjustment and stabilisation regime, the instruments of macroeconomic policy reduces access of women and children to basic goods and services; • Contoh: traktor, sophisticated machinery, etc. ELP & DHA

14. Blinkers and Problems in Microeconomic Theory • Boundary Blinkers: Invalid assumption about the nature & importance of boundary between the household and market • Microeconomic theory concerns with behaviour in consumption & production activities that are constrained by scarcity resources: Only activities that have market or exchange value(!) • Boundary blinkers, failure to correctly specified the “base population” for the measurement of economic activity. ELP & DHA

15. Blinkers and Problems in Microeconomic Theory • Consequences: • Movements of productive activities from household to market are intepreted as an increase in production because the basis for comparison is not the total universe of economic activity (only the monetised ones) • Clearly seen in: • National accounting system • Measurement of economic growth • Taking account this problem: • New household economics (NHE): time allocation ELP & DHA

16. Gender ‘tax’ ‘…women initially took on time‑consuming, labor‑intensive tasks in the home to contribute their fair share to the domestic economy in lieu of monetary contributions. But subsequently, when they began to contribute financially, they were still held responsible for these tasks, either by providing the services themselves or by contributing additional money to buy substitutes. This additional assessment is the gender tax. (H. E. Baber, 1999) ELP & DHA

17. Blinkers and Problems in Microeconomic Theory 2. Measurement Blinkers: Not recognizing contribution of household production and women in the household to social and economic welfare • Contribution of women: under-enumerated, especially their participation in the labor force and their role in biological reproduction & care (and household production) • Simple microeconomic theory asume work or not decision is only about allocation of time between work or leisure (valid mostly for men?) ELP & DHA

18. Di dalam PDB produktivitas IBU RUMAH TANGGA... tidak dihitung….

19. Blinkers and Problems in Microeconomic Theory 3. The Specification Problem: Problem arise from the failure of conventional economics to identify & take into account the opportunity cost of women’s time. • Nonmarket activities: treated as costless & ignored, considered as unpriced resources. • Conventional economics are restricted on monetary transactions & its principal actors • The key:to use opportunity cost of nonmonetised activities as women’s domestic activities, create human capital (health and education and quality of future generation) therefore contribute to economic production ELP & DHA

20. Blinkers and Problems in Microeconomic Theory 4. The Efficiency Problem: Due to gender bias, the resource allocation is not effective Effect of gender bias: • Acts as subsidy: unpaid household inputs are unpaid the true value (remember gender tax!) • Women’s unpaid family labor subsidized economic production generally • Unequal access on control of resources. ELP & DHA

21. Blinkers and Problems in Microeconomic Theory Effect of gender bias (ctd.): • Inability to move between jobs, and to search higher returns, lack the incentives for HH to provide complementary physical capital or technology to raise women’s labor productivity • Value of women’s reproductive role undervalued • Lower lifetime earnings, lead to no incentive to undertake human capital investment among women ELP & DHA

22. Blinkers and Problems in Microeconomic Theory 5. Contextual Blinkers: Is blinked to the economic significance of social and institutional context in which economic activity takes place & neglecting the role of : families, households, social and cultural norms, conventions and institutions. • Family and household considered as moral economy: individual decision to max utility; • Values, attitudes, social conventions, behavioral norms and cultural mores are overlooked ELP & DHA

23. Blinkers and Problems in Microeconomic Theory • This blinker made women to be ignored by social and institutions. • Contextual blinkers: blind to the fact that social conventions are other sources of allocative inefficiency, restricting free movement of female resources to their most productive use. • By increasing social and psychological cost and reducing the benefit of market work for women. ELP & DHA

24. gender difference in labor market ELP & DHA

25. Rata-rata Upah Menurut Pendidikan & Jenis Kelamin, 2007 Sumber: BPS, Sakernas 2007, dikutipdariFa’atin (2010)

26. Rata-rata Upah Menurut Jenis Pekerjaan & Jenis Kelamin, 2006 Sumber: BPS, Sakernas 2006, dikutipdariFa’atin (2010)

27. Angka Pengangguran Terbuka Menurut Jenis Kelamin, 2004-2008 Sumber: BPS, dikutipdariFa’atin (2010)

28. If macro policy is gender blind, what happens? Source: US Census Bureau, Census 2000 Special Equal Employment Opportunity (EEO) Tabulation for Rhode island, cited from http://www.dlt.ri.gov/lmi/pdf/gender.pdf

29. EXAMPLE OF GENDER BIAS POLICIES ELP & DHA

30. CONTOH KEBIJAKAN DAN DAMPAKNYA PADA PERAN EKONOMI PEREMPUAN Sumber: DikutipdariZulminarni (2001)

31. Gender, poverty alleviation and labor creation • Poverty allevation: • Unconditional Cash Transfer (Bantuan Langsung Tunai/BLT) vs • Conditional Cash Transfer (Program Keluarga Harapan/PKH) • Fiscal stimulus programs: • Labor creation through infrastructure investment Sumber: DySAM output cf. Chatani and Ernst (2011), (*mistakes found corrected; ** due to number rounding up)

32. Gender & Taxation Gender biased taxation: • Direct tax • Lower rates for (married) men (with families or dependants) • Joint income: higher rates for lower income earner • Tax exemption benefits men as they are usually who run business, house owners, share holders • Indirect tax (VAT tax) • Women tend to buy commodities related to health, education, nutrition compared to men • Contoh Indonesia: Konsumsi rokok vs susu anak ELP & DHA

33. Gender & Taxation Gender Based Taxation (GBT): • Direct tax • Lower tax rate for women (due to the more elastic supply of labor and more substitutable market work for household work) • Higher tax for men (less substitutable of work for for household work) • With assumption of marriage is universal, higher marginal tax for men is optimal (Alesina, Ichino, Karabarbounis, 2010) • Indirect tax • Adjusted for the gender bias purchase behavior? ELP & DHA

34. Kesimpulan & diskusi • Bias jender tampak dalam perilaku ekonomi dalam rumah tangga maupun pasar tenaker • Kebijakan makro bisa ‘buta jender’ • Perspektif jender memperkaya sudut pandang dalam memahami dan menganalisis masalah dan juga membantu dalam menelurkan kebijakan yang tepat Lalu…Apakah Anda setuju bahwa bias jender (termasuk juga bias sektoral, bias wilayah, bias urban, bias SARA) harus dikoreksi oleh pemerintah? ELP & DHA