Policy Analysis in a Macroeconomic Model of Social Reproduction

/ / Gender-Aware Macromodels, Rethinking Macroeconomics, Understanding and Measuring Care
A mother feeding a baby

Since the 1990s, unpaid work and care have garnered increasing academic attention, creating the emerging fields of the economics of unpaid work and the study of “the care economy.” Most of the earlier work was oriented toward microeconomics, focusing on issues such as the household division of labor, subsistence production in developing countries, the substitution between non-market and market goods and services in households, and the role of caring motivations in sectors of the labor market in developed and developing countries. Empirical work paralleled these theoretical efforts. Examples include measuring unpaid work via time-use surveys across the world, estimating the monetary value or opportunity cost of unpaid work, and linking care with the gender–wage gap and gendered job segregation. Macroeconomic models exploring gender and economic development were rare, and even fewer macro studies examined care and unpaid work.

Braunstein et al. (2011) contributed to this literature by embedding unpaid work and care in a structuralist macro model, illustrating how the social structures of production matter for economic outcomes. Braunstein and Tavani (2019) recast a simplified version this model in order to generate policy implications through numerical simulation. The authors go beyond the standard utilization-labor share framing in structuralist models in order to focus on more direct measures of gender inequality and the gender composition of the labor force and of employment. The resulting producer’s equilibrium – which describes the supply side of the model – always features a positive relationship between economic activity and gender wage equality. The goods market equilibrium, or the investment-savings curve, can either be care-led or inequality-led. The model results accommodate a variety of scenarios. A reduction in non-market care time can foster both aggregate demand and gender equality, but under some conditions it is also possible that there are trade-offs between economic activity and gender equality.

This paper will be available in December 2019.

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