Macroeconomics, gender, and labour markets - SOAS, University of ...

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Oct 28, 2013 (3 years and 7 months ago)

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James
Heintz
, PERI, University of Massachusetts

Expert Consultation on Women’s Economic
Empowerment

SOAS, University of London, Jan. 26
-
27, 2012

Rethinking the Role of
Labour

Markets


Broadening the conceptual framework: how is
labour

exchanged?


Demand
-
side constraints and informality


The inherent imperfection of
labour

markets


Macroeconomics, growth, and
labour

Common Approaches


Labour

economics
: often based on wage employment.
Focus: determinants of earnings.
Mincer
-
type wage
equations. Gender frequently enters as a dummy variable.


Enterprise
-
based approaches
: focuses on self
-
employment.
Estimate production functions: labor, capital (human &
fixed) as productive factors. Abstracts from other
constraints, including gender
-
based constraints.


Limited productive capital in many such enterprises
(working capital may be more important). Particularly true
for women's enterprises/activities.


Individuals exchange
labour

through a variety of markets.
A range of institutions/constraints affect this exchange.


How is
labour

exchanged? Broadening
the concept of
labour

markets.


Consider women’s self
-
employment. With few capital
inputs, women are effectively selling their
labour
, but
the exchange is frequently mediated by other markets
(suppliers, consumer markets).


Better understood by including these markets and
related institution into a consideration of ‘
labour

markets’.


These details are lost in a narrow
labour
-
based or
enterprise
-
based approach.


Unpaid care work


also critical.

Demand
-
side of the ‘
labour

market’


Labour

demand constraints affect
labour

market outcomes:
informality, either overly short or overly long hours of
work, open unemployment, etc.


But the standard downward sloping
labour

demand curve
is overly narrow (wage employment,
labour

cost focus)


Examples of sources of demand constraints:


Lack of access to markets (including domestic markets)


Insufficient investment/capital accumulation in formal sector


Macroeconomic environment


Self
-
employment and the importance of derived demand



Gender and
labour

demand


Due to segregation of activities, unequal demand for
women's market
labour

relative to men's
labour

(e.g.
women crowded into activities in which demand may
be 'saturated').


Affects returns to women’s market (remunerative)
labour
.


Inherent imperfections


Getting
labour

markets to approximate a perfectly
competitive ideal is not as good of a strategy as getting
labour

markets to work better.


Many sources: information asymmetries, social norms,
barriers to perfect mobility, transactions costs, market
power, contested exchanges, and gender dynamics.


Goal: labor market institutions which enhance
individual choices, provide adequate income/living
standards, address unequal market power (social
protections), and develop human resources.


Gender perspective critical.



Allocation of
labour

as a macro issue


Labour

is a critical factor of production & the
functioning of
labour

markets matters for
macroeconomic outcomes (Solow,
Akerlof
,
Yellen
,
Keynes)


The allocation of labor in the economy affects overall
performance. Concentration in high risk, low
-
productivity activities harms aggregate outcomes &
development dynamics.



Gender segmentation has been shown to be highly
costly, not only to women, but to the economy as a
whole.


Labour

as a produced factor of
production


Growth models/policies often do not pay adequate
attention to how
labour

is produced. Fertility, unpaid care
work, non
-
market aspects of human capital.


Some exceptions (e.g. Becker and
Barro
, 1989). However,
non
-
market factors essential to make growth work.
Altruism in the B&B model. Others have stressed non
-
market processes, gender roles, bargaining, a role for the
state, etc.



Need to consider a broader allocation of
labour
. Market
and non
-
market activities essential for growth.


Rethinking
labour

markets involves a rethinking of the
allocation of ALL labor and how the development of
human resources is coordinated.