Intensive Course in Gender-Sensitive Macroeconomic Modeling for Policy Analysis

Day 15: GEM-Care Applications: Scenario Definition and Analysis of Results

Sessions 15.1 – 15.2 GEM-Care Applications: Scenario Definition and Analysis of Results

Instructor: Martín Cicowiez


Future research will likely generate methodological advances that help analysis based on gendered CGE models contribute to emerging policy debates. One broad area is related to policymaking in the context of a global rise in female labor force participation what impact may different policies have on wages, household production, welfare, and inequality, including both gender-specific and more aggregate indicators? The analysis in the rest of this paper is an example of this: East Asia faces important gender-related policy challenges in the context of little (or no) growth for the working-age population, low rates of female labor force participation, rapid growth in an elderly population that needs care, and gender inequalities both in the household and market spheres. As female participation in GDP work increases, it is important to try to better understand the mechanisms that generate lower wages for women, the impacts of wage gaps, and how they may be overcome. This is important in the context of South Korea: In 2010, its gender pay gap was almost 40 percent, the largest among OECD countries with data (Cahuc et al. 2014, pp. 481-482). Lower wages are related to the concentration of female employment in occupations and sectors in which wages are relatively low. However, also within sectors, women tend to earn lower wages; this may be due to differences in productivity (which in their turn may be due to differences in experience and education, both related to differences in work tasks) or wage discrimination (wage differences that are not associated with productivity differences). While wage discrimination seems to be common, it is difficult to come up with exact measures since it is hard to measure productivity. Another broad and challenging area revolves around the impact of different types of consumption and investment on the accumulation of human capital and growth. The education analysis in the Ethiopia MAMS application touches on this aspect. However, this analysis could be extended to consider the links between, on one hand, growth and human capital accumulation and, on the other hand, the consumption of prepared food, care, and education services, supplied by the market and households. 

Main Reading

Cicowiez, M. and Lofgren, H. (2021). Child and Elderly Care in South Korea: Policy Analysis with a Gendered, Care-Focused Computable General Equilibrium Model. Paper prepared for the project “The Care Economy and Gender-Sensitive Macroeconomic Modelling for Policy Analysis,” American University, Washington, D.C. 

Supplementary Reading

Arora, Diksha and Rada, Codrina (2020). Gender Norms and Intrahousehold Allocation of Labor in Mozambique: A CGE Application to Household and Agricultural Economics. Agricultural Economics 51 (2): 259-272.