Group of researchers and panel

2019 Care Work and the Economy Annual Meeting in Glasgow, Scotland

Group of researchers and panelThe Care Work and the Economy (CWE-GAM) held its 2nd Annual Meeting in Glasgow, Scotland on June 30-July 2, 2019. The network of 50 researchers and stakeholders convened to discuss the project’s progress since its 2018 Annual Meeting in Berlin. The Co-Principal Investigators Maria Floro and Elizabeth King commenced the meeting by introducing the different working groups of the project and highlighting some of the project’s outputs so far. Program Officers from the sponsors The William and Flora Hewlett Foundation and Open Society Foundations related their support for research on care work and its link to engendering policy and advocacy work.   Find the full meeting agenda here and a summary of the meeting below.

Rethinking Macroeconomics (Working Group 1)

The first day of the conference was devoted to discussing theoretical papers incorporating care into macroeconomic frameworks. Elissa Braunstein, Professor of Economics at Colorado State University, recapped the papers produced in the first year:

  1. “Microfinance and the Care Economy” by Ramaa Vasudevan and Srinivas Raghavendran
  2. “Access to Infrastructure, Women’s Time Allocation, and Economic Growth” by Pierre-Richard Agénor and Madina Agénor
  3. “Gendering Macroeconomic Analysis and Development Policy: A Theoretical Model for Gender Equitable Development” by ­Özlem Onaran, Cem Oyvat, and Eurydice Fotopoulou
  4. “Endogenous Growth, Population Dynamics, and Returns to Scale: Long-Run Macroeconomics when Demography Matters” by James Heintz and Nancy Folbre
  5. “Estimating the Role of Social Reproduction in Economic Growth” by Elissa Braunstein, Stephanie Seguino, and Levi Altringer

These 5 papers can be accessed in full here.

Five additional papers were presented at the meeting followed by active discussion and feedback:

  1. “The Unequal Distribution of Care Work and the Macroeconomy” by Ignacio Garcia González, Lídia Brun, Maria Floro, and Bong Sun Seo
  2. “Long-Term Care and Family Power Dynamics” by Ray Miller and Neha Bairoliya
  3. “Policy Analysis in a Macroeconomic Model of Social Reproduction” by Elissa Braunstein and Daniele Tavani
  4. “Impact of Policy Interventions at Reduction and Redistribution of Unpaid Care Work on Employment Generation, Time- And Income-Poverty and Gender Gaps: A Macro-Micro Policy Simulation For Turkey” by Ipek Ilkkaracan, Kijong Kim, Tom Masterson, Emel Memis, and Ajit Zacharias
  5. “The Effect of Gender Equality and Fiscal Policy on Growth and Employment: The Case of South Korea” by Cem Oyvat and Özlem Onaran

After each paper discussion, Braunstein led a general discussion on the persistent gaps in gender-aware macro models and the critical aspects of care incorporated in them. The attendees raised several dimensions of care including quality, its effect on labor productivity, the role of technology, its intersection with migration, and the distinction between publicly and privately provided care services. The importance of making underlying assumptions and modeling decisions transparent and the relevance of such models in other settings and institutional environments were discussed as well.

Understanding and Valuing Care (Working Group 2)

Group 2 started the second day of the meeting with the presentation of their work on accounting for and understanding care work in South Korea. Jooyeoun Suh presented the methodologies for measuring the paid and unpaid care sectors using various national datasets. Gretchen Donehower presented the methodology for projecting care demand and supply to 2030.

To understand the nature of care work in South Korea, Ito Peng gave an overview of care policies and the status of care workers. Eunhye Kang presented findings on the various care arrangements and the nature of caregiving activities for young children and frail elderly using the newly collected Care Work Family Survey data. The next presentation focused on measuring and understanding the strain of caregiving. Ito Peng introduced a multidimensional measure of caregiving strain. Hyuna Moon shared findings from her qualitative fieldwork on unpaid caregivers’ eldercare responsibilities and work burdens. Seung-Eun Cha showed how the unpaid caregivers’ desired and actual time spent on eldercare differed using the Care Work Family Survey.

Following the presentations, the meeting attendees engaged in discussion on how to define paid care work, the importance of distinguishing between public and private care services, and how much of the experience in and lessons from South Korea are generalizable to other countries.

Gender Aware Applied Modelling (Working Group 3)

Group 3 provided an update of the Computable General Equilibrium (CGE) models incorporating care. Marzia Fontana and Carmen Estrades provided a literature review of applied models of gender-equitable macroeconomic policies and noted the potential contribution of CGE models. Hans Lofgren presented a gendered Social Accounting Matrix (SAM) for a CGE model in South Korea and suggested relevant policy simulations. A lively discussion ensued regarding how best to incorporate in the model social norms, migration, the relationship between care and human capital formation, and the public and private forms of care provision. Participants also shared ideas on how to present the CGE model in a convincing way to Korean policymakers such as engaging with Korean CGE modelers, validating the SAM with Statistics Korea and Korean researchers, and conducting robustness checks.

Roundtable Discussions

Elizabeth King moderated a roundtable discussion on the current and future demand for care and its implications for the economy. The issue of care is front and center due to rapidly changing demographics around the world; at the same time the types of care demand need to be carefully considered as they can differ across countries. Distinguished panelists discussed the different demands for care, which can vary by development stage, the importance of good data on care, and the search for an optimal mix or combination of family, market and public care provision.

Shahra Razavi moderated a second roundtable discussion that brought together a diverse group of academic researchers, policymakers and activists in Scotland and South Korea. The panel discussed the current situations of public care provisioning, the working conditions of paid and unpaid caregivers, and the challenges that stakeholders face in both countries. While Scotland and South Korea have taken formal measures to increase the role of government in care provision and to recognize the value of unpaid care at home, the implementation of these measures can be challenging due to social norms, rural-urban divide and problems in recruiting and retaining paid care work force. Research plays an important role in promoting effective, gender-aware care policies and in pushing the agenda for equitable, quality care provisioning.

Application to Other Countries

Participants engaged in group discussions on the possibility of adapting the Care Work and the Economy project in different parts of the world. In Latin America, Colombia and Uruguay were identified as possible countries for adaptation; both countries are at early stages of care policy implementation and have strong research capacity, with interest from advocacy groups. In Africa, the group highlighted the importance of framing the relevance of care within the context of achieving a demographic dividend. There is also need to make a strong case as to why governments should invest in care provisioning; further empirical work is required in order to fully understand the current care delivery system and varied forms of care arrangements. Two countries that can be considered for developing a care and the economy project are Senegal and Uganda. In Asia, Thailand and Mongolia are identified as potential countries for adaptation with both countries heavily relying on families for caregiving and lacking government support for care services.

Going Forward

Representatives of the Project’s three working groups expressed their commitment to collaborate and work together in moving forward with producing the final outputs of the project. Group 1 announced their plans to publish special issues of an academic journal to showcase their papers. In South Korea, Group 2 will host a conference inviting policymakers, advocacy groups and academia in October 2019 and to host a policy dialogue conference with Korean government officials and a training workshop for advocacy groups in 2020. Group 3 will move forward in revising the gendered Social Accounting Matrix based on comments raised at the meeting and in conducting simulations on policies of interest in collaboration with Group 2. Other key recommendations from the meeting participants included improving communication and exchange between working groups so as to produce a coherent set of outputs (papers), clarifying the generalizability of the Korean case study to other countries, and using different communication strategies in order to disseminate the findings.

Gendering Fiscal Policy

The importance of public physical infrastructure in stimulating productivity and economic performance is embraced by most economists. However, there is less awareness that public spending in health, social care, education, and childcare should be considered as investment in social infrastructure. We therefore develop a feminist post-Keynesian/post-Kaleckian demand-led growth model to elucidate the impact of gender equality and public spending in these social sectors within a theoretical framework. In particular, we use the model to analyse the effects of fiscal policies and decreasing the gender wage-gaps on GDP, productivity (GDP per employee), and employment of men and women in both the short run and long run.

Our analysis challenges conventional thinking about the impact of public spending in health, social care, education, and childcare. Day-to-day spending in these sectors (e.g. wages of teachers, nurses, or social care workers) is considered as “current spending” rather than as investment in our national accounts. However, public spending in these social sectors have long-term benefits to society, yielding substantial productivity impacts in all other sectors of the economy by increasing people’s skills, health, and innovative capacities.

Crucially, these social sectors improve gender equality and reverse one of the most persistent dimensions of inequality in our societies; they provide crucial services which are otherwise provided by the unpaid invisible domestic labour of women. Public supply of these services helps women to participate in social and economic life more equally. This in turn further increases productivity by unleashing the hidden potential of women. Moreover, in the current gendered, occupationally segregated labour markets, these sectors employ predominantly women. More public social spending consequently leads to closing the gender-gap in employment. As a result, these expenditures are labelled as “purple public investment” by feminist economists (İlkkaracan, 2013).

Recognizing the vast amount and importance of time women spend on unpaid care at the household, which is not accounted for in the standard national accounts and measures such as GDP, is crucial for designing policies to increase gender equality. A fiscal policy stance, which aims to publicly provide the necessary social services, would socialize part of these activities and radically decrease the amount of unpaid private care. For instance. universal free childcare and nurseries open for sufficiently long hours benefit both mothers and fathers by giving them an equal chance to balance work with other social, cultural, and political aspects of their lives. Meanwhile, provision of these resources also benefits society at large by decreasing inequality between children from different backgrounds and improving the creative capacity of children.  Of course, there always will be the need and desire for care provided by family members for children or the elderly in the domestic private sphere. Nevertheless, regulations such as parental leave for both mothers and fathers in addition to working time arrangements that facilitate combining care and work for both men and women should help to ensure that time for caring can be equally shared between men and women.

What, then, does this imply for fiscal policy and the setting of the budget deficit or public debt targets? Fiscal policy should be focused on the needs and well-being of society rather than aiming at a singular target for the sake of the deficit. The mainstream approach of limiting the governments’ fiscal space is based on a mistaken household analogy that the public sector should balance its budget just like any household has narrowed down the political space. Within this narrow space, the idea of a fiscal credibility rule suggests that spending on public investment can be funded by borrowing, while day-to-day spending is financed by tax revenues. Even under this limited fiscal space, the idea of defining public spending in universal health, social care, education, and childcare as investment in valuable social infrastructure would extend the scope so that fiscal policy could be financed by borrowing as well as by raising tax revenues. Furthermore, mainstream policies consider even public spending financed by increased taxation of income, wealth, and corporate profits as undesirable based on the myth that it would lead to low private investment and productivity in the long term. But this assessment is rather static as it totally ignores the positive impact of these policies on macroeconomic demand, and in turn on productivity and private investment.

Our macroeconomic model can form the basis for the empirical analysis of gender equality and fiscal policy on growth, productivity, and budget balance while also serving as a tool for policy analysis and gender-responsive budgeting. In particular, the model allows policy makers to analyse the impact of fiscal policy-based employment increases in health, social care, education, and childcare along with an upward convergence in wages in these public sector jobs with closing gender pay gaps. The model also anticipates public investment in social infrastructure to reduce women’s unpaid domestic care work, while increasing their labour supply and enabling them to spend more time in paid work. Aggregate demand is expected to be stimulated both in the short- and long-run via strong multiplier and productivity effects of public investment in social infrastructure. Higher employment and closing of the gender pay gaps via higher wages for women in the public social infrastructure sector is also expected to stimulate household consumption with positive demand effects for the economy. In the long run, government spending as well as higher wages of women are expected to increase productivity. Both the demand effects in the short-run and the long-term productivity effects, which further increase profitability, are expected to stimulate private investment as well.

Given the labour-intensive and domestic demand-oriented nature of social infrastructure and occupational segregation, such investment is expected to lead to very strong increases in the employment rates of women as well as to the creation of a substantial amount of jobs for men in all sectors of the economy due to spill-over effects of demand from the social sector to the rest of the economy. This policy thereby also contributes to closing the gender gaps in employment. Due to sectoral and occupational segregation, public spending in social infrastructure is expected to create more employment for women compared to physical infrastructure. According to empirical research based on input-output tables (Antonopoulos et al., 2010; İlkkaracan et al., 2015; De Henau et al., 2016; İlkkaracan and Kim, 2018), public investment in physical infrastructure creates fewer jobs in total, and most new jobs are predominantly male jobs. However, this research does not consider the long term effects on productivity. An empirical analysis of our model for a specific economy can further shed light on the gendered policy implications.

The expansionary effects of fiscal policy lead to higher tax revenues in the economy; hence, fiscal policy partially finances itself. The model can be used to simulate further policy-mix scenarios including increases in tax rates on capital or labour to ensure that public social infrastructure investment and closing gender gaps in these sectors can fully be financed.   Progressive taxation, which improves after-tax equality in terms of income and gender, is also important in the context of public spending on non means-tested services such as universal health and social care, education and childcare. A higher tax rate on higher incomes is a way of those who can afford contributing more towards universally provided public services.

 

References

Antonopoulos, R., K. Kim, T. Masterson and A. Zacharias (2010) ‘Investing in Care: A Strategy for Effective and Equitable Job Creation.’ Working Paper No.610. Levy Economics Institute

De Henau, J., Himmelweit, S. Łapniewska, Z. and Perrons, D., (2016) Investing in the Care Economy: A gender analysis of employment stimulus in seven OECD countries. Report by the UK Women’s Budget Group for the International Trade Union Confederation, Brussels. https://wbg.org.uk/wp-content/uploads/2016/11/De_Henau_Perrons_WBG_CareEconomy_ITUC_briefing_final.pdf

İlkkaracan, İ., 2013 ‘The Purple Economy: A Call for a New Economic Order Beyond the Green’, in U. Röhr and C. van Heemstra (eds), Sustainable Economy and Green Growth: Who Cares? LIFE e.V./German Federal Ministry for the Environment,  32–7.

İlkkaracan, İ., and Kim, K. 2019. The employment generation impact of meeting SDG targets in early childhood care, education, health and long-term care in 45 countries, Geneva, ILO, forthcoming

İlkkaracan, İ., Kim, K. and Kaya, T. (2015). The Impact of Public Investment in Social Care Services on Employment, Gender Equality, and Poverty: The Turkish Case. Research Project Report, Istanbul Technical University Women’s Studies Center in Science, Engineering and Technology and the Levy Economics Institute, in partnership with ILO and UNDP Turkey, and the UNDP and UN Women Regional Offices for Europe and Central Asia