GENDER ISSUESACADEMIC YEAR2014-15

Maria A. ConfalonieriLecture 10

The impact of the financial crisis and of the policy responses on gender inequalities in the EU

Common trends in macroeconomic policy

• the standard during the first phase of the recession were fiscal stimulus packages

• the current general approach after 2010,the sencond phase is fiscal consolidation and austerity, in various degrees. Their gender implications depend on the national gender regimes.

The post 2008 recession

• The impact of this recession is likely to be more evenly shared by women and men than in the early 1990s and early 1980s because in all countries women participation to the labour market is higher and most households rely on two incomes to make ends meet.

• As a result the impact of female job loss has a significant knock-on effect on household incomes whether they are single female headed or dual earner households.

• Moreover male job loss in dual earning households creates female breadwinners and thus the impact of labor market inequalities along gender lines arefelt not only by individual women but by the whole household

Policies risk to interrupt the progress towards greater gender equality

Until the mid 2000s, thanks also to the EU, gender equality became a priority in the policy agenda of most EU countries (albeit to a different extent). In some countries remarkable policy changes : UK, Spain, Germany.

• “Policy responses to the crisis risk jeopardizing advances made in women’s employment or the

enhanced status of equality in recent years. Gender equality is at risk if the downturn is used as a reason to slowdown progress on equality policies or even to rethink ‘expensive’ policies that help women on the labor market.”(Smith 2009) .

Gender mainstreaming

• Since 1996 the policy approach of the EU to gender equality .

• Def :• Gender mainstreaming is the (re)organisation,

improvement, development and evaluation of policy processes, so that a gender equality perspective is incorporated in all policies, at all levels and at all stages, by the actors normally involved in policy-making.”(Council of Europe 1998) .

• Instruments : Gender Impact Assessment (GAI) : ex-ante and ex-post policy evaluation

What about gender mainstreaming during and after the crisis?

• EGGE Analisis of national policies and Analysis of National Reform Plans (2013)– Conclusion:

• the gender dimension has a low profile in employment and welfare policies adopted since 2008 and in all the documents developing the Europe 2020 strategy. Among the latter none of these instruments sets specific targets in gender equality

• At the level of specific policies examined from the angle of gender (NRPs and other national policy initiatives) the picture is familiar: gender issues have low visibility overall and (mostly) low priority. The experts share a fear that longer term negative consequences in gender equality may prove, in the end, more harmful than anticipated.

Risks for gender equalitysocial norms

• -Policy makers may respond to widespread social norms about gender roles :

• World Value Survey: 42% believe than when labor is in short supply men must be given priority .

Risks for gender equality Women experience a gender pay gap

and are more likely to be low paid• EU countries exhibit different levels of gender

pay gaps and of gender employment segregation in low paid jobs .

• Risks of in-work poverty, mostly for lone parents• The existence of a minimum wage and its level

are crucial . In-work benefits also can alleviate the risks of poverty .

• Active labor market policies (training, evaluation of competences) are needed.

Risks for gender equality-part-time and temporary jobs

• Women are the largest share of part-time workers .• In most countries women account for the majority of

temporary jobs .• Expansion of part time jobs and temporary jobs has

been a priority in many countries, where the model of flexecurity was implemented only with reference to the flexibility pillar (Italy, Spain)

• In some countries women (and migrants) are the majority of workers in the shadow economy, unregulated jobs .

• This means a greater risk of dismissals (particularly when pregnant) and reduced entitlements (for instance in terms of unemployment benefits, maternity leave etc.)

Ex: Mini-jobs in Germany, Unemployment protection in UK

• In Germany in 2009 64% of mini-jobs (less than 400 euros a month) were exercised by women and for the very large (2/3) majority this was their only job. Mini-jobs don’t entitle to unemployment insurance benefits .

• In the UK the access of women to unemployment benefits was 15 p.p. lower than their share of unemployed due to insufficient contributions to receive contribution-based benefits

Risks for gender equality : care responsibilities

• Women employment depends on the availability of care for children and frail elderly.

• Long maternal and parental leaves may undermine the women’s seniority at work and career prospects. Care responsibilities should be shared between the adult member of a household (depends on wage replacement for parental leave).

•

Stage of the crisis policy responses and gender impact: Phase 1

• Phase 1 2007-2010• Impacts were different due to factors such as

importance of the banking sector, construction and impact of the crisis in the country’s export markets.

• When construction and manufacture were most hit, the impact was mostly on men.

• More mixed when the crisis touched the banking and finance sectors, employing more women.

Stimulus packages • In view of this goal, governments should ensure that spending is

gender equitable in job creation.

• Concretely, that means governments should not only spend on physical infrastructure projects to create jobs and stimulate demand in that sector that largely employ male workers and women will have little benefit from such job creation.

• Governments should therefore also allocate funding for social infrastructure investment, in areas such as public health, education, child care, and other social services. This generates jobs for women, who are over- represented in those occupations; second, help in women with their care burden and can attenuate some of the negative effects of the crisis on them and the children they care for.

• Few EU countries invested in social infrastructure in phase 1 (Germany)

Stimulus package

• While in Germany it benefitted most men in UK , where the stimulus package of 2009 consisted mostly in tax cuts (V.A.T. -2,5 pp) increases in child benefits and tax-credits, it benefitted all income groups including low income groups, where women are over-represented.

Reforms in unemployment benefits

• Many countries adopted measures to adapt temporarily or permanently the unemployment benefit system to the needs generated by the crisis rising the duration of benefits or their coverage.

• In many countries part time unemployment scheme were improved .

Stage of the crisis policy responses and gender impact: Phase 2

• Austerity measures • By mid-2010 the majority of EU countries

put in place austerity measures.• This was particularly the case of countries

with sovereign debt crises :• -measures on the tax side• -measures on the expenditure side• -measures of de-regulation of the labour

market

Austerity measures: on the tax side

• Changes in tax and tax-benefits .• Some measures were regressive in their effects so

hitting particularly women who are over-represented among lower income.

• Ireland –Universal Social Charge on all gross income : only under 10,000 euros exempted while the top bracket , paying 7% of gross income, is set at 16,000 euros, barely above minimum wage. Severely regressive.

• Ireland- 100 euros flat-rate tax on households (independently on property value)

• Rise in VAT : Spain from 16 to 18% in 2010 and 23% in 2011, affects the most vulnerable groups among which women are over-represented .

Austerity measures – on the public expenditure side

• Reducing the size of public employment.• Germany: cut back between 10.000 and 15.000

jobs in PA between 2011 and 2014.• UK: -330.000 jobs in the public sector by 2015 .• halt to new recruitments in Portugal.• Ireland 9% of public employment lost between

2009 and 2012• Greece: committed to -15,000 by 2015 (1 hired

every 10 exiting in 2011 and 1 every 5 in 2012)

Reducing the size of public employment: gender impact

• Generally women are over-represented in the public sector. Impact depends on which compartments are downsized

• Overall the public sector provides more secure jobs, smaller gender pay gap, better protection from discrimination, better working conditions under the point of view of work-life balance.

• Downsizing of staff implies worsening working conditions for employees and a deterioration of the quality of public services

Austerity measures – on the public expenditure side

• Cutting wages in the public sector and reducing public employee’s entitlements.

• Greece -15% 2010-11 and further 20% in 2011.

• Spain: -5% in 2010 (but more on higher wages)

• UK: public sector pay freeze.• Increase in working time in the public

sector

Austerity measures – on the public expenditure side

Increase in age for retirement• Equalization of men’s and women’s retirement age:up

to 65-67.• Pensions entitlements tightened in terms of years of

contributions and pensions calculated on average earnings or on longer periods rather than on the last years at work.

• The former can be beneficial for women since early retirement is a cause of female poverty in old age: but care services needed (for frail elderly and grandchildren should be increased).

• The second increases the risk of poverty for older women due to their shorter and interrupted careers

Cuts in expenditure for family policy

• -CHILDCARE SERVICES

• -MONEY TRANSFERS TO FAMILY WITH CHILDREN

• -PARENTAL LEAVES

Childcare Services • Essential to promote participation of the mothers to the

labor market • Barcelona target places in childcare services for 33%

children between 0-3 by 2010.• Germany launched in first phase a plan of investments in

childcare services and maintained it.• Italy : the large plan (730 million euro) for developing

childcare services launched in 2007 -2010 was not re-financed in 2011 .

• In Greece reduction in transfers to municipal governments reduced the availability of childcare

• In Hungary mandatory age for school reduced at 5, but modest effort to increase services for younger children

Child benefits

• Spain – the flat-rate payment of 2500 euros for new born children was cancelled .

• UK- freeze of Child benefits , removed for higher incomes (formerly universal benefit, paid to mothers). Some of the measure supporting the cost of children introduced by the governments of the New Labor were cancelled :abolished the Health and Pregnancy grant (2011) ,Surestart pregnancy grant limited to the first child, Child Tax Credit reduced for middle-income families and the share of childcare costs that can be covered by tax credits reduced from 80 to 70%.

• Ireland-reduction of child benefits (paid to women)

Parental leaves • Positive gender impact when shared .Sharing depends on the

compensation for wage loss : if it is low fathers don’t take it.

• EU directive of 1997 providing for parental leaves for both parents but leaving to m.s. decisions about wage replacement.

• Germany marginal decrease in wage replacement (6765%) and removal for very high incomes. Increase in the premium in time for sharing (from 2 to 4 months).

• Initiative to increase the days of paternity leave in Spain postponed by the conservative government.

• Parental leave wage replacement remains low in Italy

“Activation” of parents

• Main measures taken for parents (particularly lone mothers ) in the 90s and early 2000s were in a logic of “activation” increase participation to the labor market and reduce dependency on welfare: work to welfare.

• In-work benefits to make work pay.• Austerity measures tightening the conditions

of availability for work. Reducing or removing in-work benefits.

•

UK activation

• Welfare Reform Programme introduces the Universal Credit which replaces a wide range of existing benefits with a single working-age benefit paid to claimants out of work, and then tapered off as they move into jobs. The job seeking rules are changed: both members of couples in workless households in receipt of benefits will need to be available for work unless they have a dependent child <5 years or other mitigating factors such as ill health.

Ireland

• The One Parent Family Payment, introduced in the Nineties, transferred into the Jobseekers allowance when children reach the age of 7 (before was 14) thus moving to a system of compulsory participation to the labor market. Before lone parents could take up low paid jobs (for instance in subsidized employment schemes, or in part-time jobs) , while now they are trapped in welfare dependency. negative impact in terms of lone parents and their children poverty (28% of Irish children in lone parent families)

De-regulation of the labor market - competitiveness

• Minimum wages – Regulation of work conditions• Ireland- minimum wage has been maintained ,

despite pressures to abolish it, but frozen at 8,65 euros, pre-crisis level ;Greece –reduction of minimum wages .

• Increased the possibility of employers to demand flexibility (for instance in working hours) : can have very negative impact on work-life balance for women.

Equality bodies

• In some countries equality bodies were restructured reducing their autonomy and administrative capabilities .

• DK the Department of Equal Opportunities was downgraded to an office of the Ministry of Employment.

• Italy- Resources for Equality bodies at provincial and regional levels were drastically cut. The Minister of Equal Opportunities created in 1996 was abolished in 2011.

• Ireland- restructuring of equality bodies has undermined their autonomy and resources

Conclusions

• Austerity policies may have a long term very negative impact in terms of gender equality.

• Gender equality seems a lower priority in governments’ agendas.

• Austerity policy not assessed in terms of their gender impact (no gender mainstreaming) .

• Risk of weak enforcement of anti-discrimination legislation due to downgrading of public agencies for equality.