As a new U.S. president takes office promising to restore the country to greatness, it’s a good time to examine the research on how nations can best pull themselves out of economic crises. Few have examined whether various recovery plans would help women and men equally.
That’s not an abstract concern. You can’t have a healthy economy if half the population is suffering. And yet many economic recovery plans and policies ignore gender. For example, in many countries, debt-reducing austerity measures made deep cuts to social welfare and public sector jobs – which disproportionately hurt women (and therefore children) economically, our recent research shows.
That’s why we studied the 2008 global financial crisis: to learn which approaches were most successful for women and men.
Different kinds of welfare systems affect women and men differently
During financial crises, the welfare state helps to protect citizens. These systems, however, are designed with different visions of the role of men and women in society and in the workforce, and so have different effects when times are tough. From political science research, we can draw a useful typology of these:
1. Liberal welfare systems, like those found in the U.S. and U.K., have lower taxes and less social spending than other advanced economies. For the most part, individual workers are responsible for building their own safety nets with private pensions and health insurance and other benefits earned in full-time jobs. While this doesn’t discriminate formally, in practice, it rewards average male workers who stay employed full-time and hurts women whose jobs are interrupted by pregnancy, child care, elder care and so on.
At the same time, women in these systems have an easier time getting jobs because of highly flexible labor markets. These make it easier for employers to hire and fire workers and for both men and women to readily move in and out of jobs. But women in these systems have less social supports, such as child care.
2. Nordic welfare systems, such as those in Sweden and Norway, are known for generous universal benefits funded through high taxes. Unemployment benefits, family support and so on lead to high levels of employment for men and women. All citizens get benefits regardless of family and work status. Universal family policies — job protection, generous parental leave and child-care services — keep women employed. This model assumes that women and men share equally in domestic and paid work.
3. Continental European welfare systems, as seen in Germany and France, typically offer high levels of employment and wage protection for full-time regular workers, while penalizing part-time or temporary employment. These systems are based historically on a male breadwinner model, in which women and families get their benefits from a male earner. For women who are not employed full time, social benefits are limited.
4. Southern and Eastern Europe have similar systems but with far less generous social support. These plans assume that family members care for one another, which in practice means women are expected to care for children, elders and so on.
How do these compare in keeping women employed during economic crises?
Overall, during the financial crisis between 2007 and 2013, Liberal and Nordic welfare states did a far better job at protecting women from unemployment than did the European model.
Continental welfare systems, which include Austria, Belgium, France, Germany and the Netherlands, were associated with a 7 percent increase in female unemployment, with no statistically significant effect on male unemployment. While male unemployment may have increased in most countries during the crisis, the welfare system did not appear to contribute to this pattern. Similarly, Eastern European welfare states were associated with a 6.9 percent increase in female unemployment, without appearing to affect male unemployment. Southern European systems saw a staggering 16 percent increase in female unemployment and an 11 percent increase in male unemployment.
Compared to Nordic and Liberal regimes, these other systems offered less protection for female workers. Most benefits go to full-time “core” workers. Non-traditional workers get fewer benefits and, due to employment protection policies, have more difficulty gaining full-time, regular work. Employed women in these countries generally fall into the “non-traditional” category.
By contrast, Liberal and Nordic systems were not associated with increased unemployment for men or women. In other words, while unemployment may have increased in general, these systems did not contribute to differences in unemployment rates between men and women.
But the Liberal and Nordic systems did have some differences, with women in Liberal systems facing some inequality. For instance, research on workforce participation of single mothers in Sweden and the U.S. found that although both countries had high rates of female employment, the logic differed drastically. Whereas generous child care and paid parental leave policies in Sweden meant that single mothers wanted to go back to work, the lack of social support in the U.S. meant many single mothers felt they had to go back to work.
How did this affect the general economic recovery?
During the economic crisis, unemployment across OECD countries rose from an average of 5.6 percent in 2007 to a peak of 8.3 percent in 2010. While overall unemployment rates showed little difference between women and men, standing at 7.9 percent and 7.7 percent respectively, this ignores differences within countries and across systems. For example, women’s unemployment rate was more than 2 percent higher than men’s in Italy and the Czech Republic, and nearly 7 percent higher for women than men in Greece.
None of the major E.U. nations did serious gender impact assessments before putting stimulus packages in place. And except for the U.K., neither did they evaluate whether austerity packages would affect women and men differently.
When almost half of your national workforce isn’t helped by your recovery policies, how can the whole nation emerge from economic crisis? In many cases, gender-blind policies not only failed to protect women from the initial shock of the economic crisis, but made it worse as the recession wore on. Austerity measures, in particular, disproportionately hurt women. That has meant a far weaker economic recovery than many had hoped.
Sidita Kushi is a PhD candidate and lecturer in political science at Northeastern University, researching contemporary security and economic challenges, particularly within Eastern Europe. Follow her on Twitter @SiditaKushi.
Ian McManus is a postdoctoral research fellow with the Institute of Social Sciences at the University of Lisbon, researching political polarization and contemporary social and economic policy reforms across OECD countries.