A Macroeconomic Analysis of the Effects of Gender Inequality, Wages, and Public Social Infrastructure: The Case of the UK

Ozlem Onaran, Cem Oyvat and Eurydice Fotopoulou

Feminist Economics, 2022, vol. 28, issue 2, 152-188

Abstract: The aim of this study is to develop a model to analyze the macroeconomic effects of two dimensions of inequality – gender inequality and functional income distribution – and public spending, in particular on social infrastructure, on output, productivity, and hours of employment of men and women. This study estimates the model econometrically using an IV-GMM estimator and time series data for the period of 1970–2016 for the UK. For the estimation of productivity, the article uses IV-GMM estimations based on panel data for eighteen industries for the period of 1970–2015. The study finds that output in the UK is both gender equality-led and wage-led, and hence generally equality-led. Public social infrastructure investment has a high positive effect on both output and employment. Despite a strong positive effect on productivity, the employment of both men and women increases in the medium run.HIGHLIGHTS Output in the UK is gender equality-led and wage-led; hence the UK is equality-led.An upward convergence in wages by closing gender pay gaps leads to higher output.Public social infrastructure spending has a positive effect on output and productivity.Public social infrastructure leads to higher employment for both men and women.A mix of labor market and fiscal policies can achieve both equality and employment.

Date: 2022
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Working Paper: A macroeconomic analysis of the effects of gender inequality, wages, and public social infrastructure: the case of the UK (2022)
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DOI: 10.1080/13545701.2022.2044498

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