Why Do We Need Feminist Economics? (March 2023)
What is feminist economics? Is it a complement or subsitute for standard economic analysis? Regardless, why do we need it today? These are the questions that animate this Liberty Matters symposium. Led by Professor Giandomenica Becchio, four scholars will each take their turn at providing answers to these questions.
Becchio reminds us in her opening essay, "Any social phenomenon has many possible causes and correlations, so both the explanations mentioned above are partial. They might coexist: Sometimes discrimination is evident; sometimes gender inequality is not a matter of discrimination. Anyway, the phenomenon of gender inequality exists."
Giandomenica Becchio, Why Do We Need Feminist Economics?
There are many reasons we need feminist economics. First, we need to understand why economics per se, i.e., standard economics, was unable to provide a complete and realistic explanation of the phenomenon of gender inequality. Second, we need feminist economics in order to better know the origin and the nature of gender inequality within the economy and how to possibly overcome it. Furthermore, we need feminist economics in order to better comprehend feminism as well as economics and the way they have been interconnected at a certain point, roughly forty years ago. We need feminist economics to solve the present gender economic inequality.
The nature of gender inequality
Datasets (available here, here, and here) reveal that gender inequality in the economy persists in any sector: economic gaps include access to labor—especially in more remunerative sectors—different wages; numbers and types of entrepreneurs. Moreover, women require more time and much effort to get promoted (this phenomenon is known as the "glass ceiling"). There are several causes for these gender economic gaps. Each of them might be explained by adopting different methodological assumptions to be applied to different economic models. Standard economics provided its own explanation through the work of Gary Becker, who founded the new home economics in the 1970s. Feminist economics was developed as a reaction, and sometimes a rejection, of standard economics’ explanation of gender inequality.
Before getting into details of the differences between new home economics (the research field which adopts standard economics to deal with gender inequality) and feminist economics, let me provide an example of what gender inequality actually is by considering the gap between men and women among full professors: this gap is 80% in favor of men on average (look here). We might say that both standard economics and feminist economics assume that this gender gap is due to the fact that women college professors are less involved with their academic careers because they are used to spending more time and energy in taking care of their families than their male colleagues. Nonetheless, standard economics and feminist economics differ in considering the causes of this gap. According to standard economics the gap is the effect of women’s free choice. Conversely, feminist economics claims that the gap is the effect of gender discrimination.
Gender discrimination is regarded as a consequence of the traditional patriarchal system (in this specific case within academia). This system tends to reinforce the traditional role of women primarily as care-givers and the role of men primarily as breadwinners. Hence, the number of women full professors is lower than the number of male full professors because women are deliberately excluded from the top of their profession. On the opposite side, standard economics sees the low rate of women full professors as a typical case of trade-offs: Women freely choose to devote less time and energy to their careers in order to take care of their families because this is what they actually prefer. Women college professors are not an exception: once they get a tenured position (associate professors) they make fewer efforts to get a promotion because they freely choose to split their time and energy between their academic commitment and their traditional role within the household.
The first explanation is a feminist critique of the traditional division of roles between men and women which is in favor of men; the second explanation is a description of the rationale behind the current state of affairs provided by standard economics. They are two opposite ways of considering this specific kind of gender inequality. Any social phenomenon has many possible causes and correlations, so both the explanations mentioned above are partial. They might coexist: Sometimes discrimination is evident; sometimes gender inequality is not a matter of discrimination. Anyway, the phenomenon of gender inequality exists. Hence, it is important to consider how economics deals with it, by taking account of both standard economics and feminist economics.
In fact, at the end of the day, what really counts is to understand gender inequality and eventually to reduce it.
Inequality and freedom in gender issues within economics
Classical liberal types, like us and our readers of "Liberty Matters,” usually agree on the fact that human beings are all equal regardless of their gender. Nonetheless, classical liberals tend to consider freedom as more important than equality. This argument is especially poignant when the search for equality implies some progressive agenda that could impose rules and restrictions to individuals’ free choice in the name of a superior aim. However, classical liberals must admit that when a choice is the inevitable result of constraints that are imposed and not chosen, freedom inevitably declines and sometimes, depending on the nature of the imposition, collapses.
We know that standard economics is all about rational choices between scarce means, given some revealed preferences and a budget constraint. The rationality of any choice consists in maximizing the agent’s expected utility function. The key point in this definition is the notion of revealed preferences that lead to the mechanism of maximization: preferences are assumed exogenous. This methodological assumption de facto does not explain the economic choice; rather it justifies the status quo. It’s an ex post explanation unable to understand the complexity of motivations behind a choice.
Standard economics does not really clarify the motivation of the persistence of the gender gap between the number of male and female full professors, rather it justifies the gap by assuming that fewer women than men prefer to maximize their utility function in reaching the top of their academic career. Feminist economics goes beyond the status quo and tries to explain the motivation behind agents’ “revealed preferences” by introducing notions such as social pressure, gender stereotypes, discrimination, and self-constraint. The act of maximization may be rational, but not free per se. It implies freedom if and only if preferences are the result of a condition of liberty, i.e., if they are endogenous.
This was one of the first critiques provided by feminist economists to Becker’s approach to gender issues in the economy. Founded in the 1990s via the institutionalization of IAFFE (International Association for Feminist Economics) and the publication of the academic journal Feminist Economics, the origin of feminist economics might be regarded as a reaction to, and sometimes a rejection of, the way adopted by standard economics, in particular by Gary Becker’s "new home economics," to cope with gender inequality (Becchio 2020).
In the 1970s, Becker published some pivotal papers (1973; 1974) that were further developed in his book A Treatise on the Family (1981), about how families produce, allocate, and distribute their members’ resources within households. Besides the division of labor between partners, the economics of the family à la Becker included the education of children, fertility issues, and the analysis of split ups/divorces. The aim of Becker was to scrutinize all these issues under the paradigm of standard economics, i.e., to describe the most efficient way to educate children, the most efficient way to choose to have an additional child, the most efficient way to get married versus staying single, and to get divorced versus staying married.
Becker and his followers started their research by analyzing the traditional division of labor between partners. They considered it as a result of several factors: the biological and psychological differences between men and women as well as different investments in human capital between boys and girls. They especially insisted on the natural propensity of men to fulfill their expected utility function in the market, vis-à-vis the natural propensity of women to fulfill their expected utility function in the household.
Given this rationale, new home economists (standard economists) made certain assumptions in order to model the allocation of time and resources within the family members in the most efficient possible way. They concluded that the optimal allocation of time occurs when the marginal product of working time equals the marginal product of household time.
According to Becker, household members agree to maximize a single utility function. He posed a benevolent head of the family (the husband/father) who fairly considers the preferences of all household members and adjusts allocations in response to family members’ behavior. An efficient household would allocate the time of women mainly to the household sector and the time of men mainly to the market sector because women have a comparative advantage over men in the household sector and men have a comparative advantage over women in the market.
Becker and his followers assumed that, while the sharp sexual division of labor in all societies between the market and household sectors is partially due to the gains from specialized investments, it is mainly due to intrinsic differences between the sexes from a biological and psychological point of view. This assumption led new home economists to consider specialized market-oriented investments on boys and household-oriented investments on girls as optimal strategies which provide highest returns for the society. Given these assumptions, Becker defined marriage as a long-term contract demanded by women from men in order to protect them against abandonment and other adversities (Becker 1981, 30).
Feminist economists of the time, mainly women, rejected the new bargaining marriage theory à la Becker by considering it not just mainstream but malestream. i.e., grounded on methodological assumptions that are in favor of men. Feminist economists pointed out some relevant issues ignored by new home economists.
As Jacobsen (2018) summarizes, there are six specific challenges provided by feminist economics to standard economics: the development of models able to explain endogenous preferences; the rejection of rational choice theory; the insistence on the role of gender stereotypes in favor of men as a determinant of the traditional division of labor; the analysis of the origin of institutions that privilege men and disadvantage women; and the development of a better economic model of caring.
For example, Ester Boserup (1970) noticed that application of rational choice theory to the supposed-lower marginal productivity of women’s labor justifies rather than explains the idea of the inferiority of women. She also specified that the typical household model was a myth that did not adhere to reality. In fact, the division of labor varies greatly across the world’s regions. Hence, she replaced the traditional model of household used by the new home economics with an alternative model, which presented two advantages. It was able to acknowledge differences in preferences and priorities among household members; and it was able to pay a greater attention to the incentives aimed to promote cooperation and to avoid conflicts among family’s members.
Barbara Bergmann (1981) underlined that “Becker’s encomium to the advantages of the division of labor among spouses” was biased by “its perspective of a male member of a traditional family” (81). She specifically targeted Becker’s emphasis on the rationality of employment discrimination against women as detrimental to a correct view of the traditional division of labor between sexes which largely depends on complex social structures that influenced the choices of individuals, especially the choice of men to neglect housework and child care.
Nancy Folbre (1986) remarked that the head of the family might be not benevolent at all and that the aggregation of individual preferences in the household function made by assuming that altruism prevails in families is problematic and inconsistent with the idea of a maximizer economic agent. Furthermore, gender specialization in education de facto makes women the weaker partner and much more vulnerable in case of divorces or breakups.
Julie Nelson (1994) stated that Becker’s approach to the economics of marriage within the discipline “has more to do with the comforts of orthodoxy than with the requirements of productive investigation” (126).
According to feminist economists, standard economists applied the implications of long-run competitive equilibrium to the status of women and the current state of gender inequality, by considering the status quo natural and efficient. Besides having constructed models that rationalized an extreme gender-based division of labor in households and occupational segregation, Becker’s model of taste-based discrimination led him to claim that gender pay differences unwarranted by productivity differences would disappear in competitive markets. Doing so, he and new home economists ignored models of discrimination that might have better explained gender gaps.
Conversely to Becker’s theory, feminist economics adopts more realistic hypotheses in order to better analyze gender inequality within the household and in the market; the motivations to get married; the evolution of the contribution of partners at home and in the market; the distribution of family resources among spouses and children.
Let’s get back to our initial example, i.e., the gender gap between men and women full professors within academia. Do we agree with standard economics and consider this gap as a free choice of women associate professors who prefer to devote less time and energy to getting promoted because they maximize their utility function by combining family duties and academic work? Or do we give some credit to feminist economics which considers that gap as the result of an unequal opportunity in the academic job market for promotion due to the unequal share of responsibilities between spouses in coping with a household that still forces the majority of women college professors to carry the "double burden"? This double burden inevitably leads them to face more difficulties in breaking the glass ceiling. They have less time to travel to conferences and then fewer chances for networking; less time to do research and then to publish, especially if they face more difficulties in networking for the reason mentioned above.
By the way, the provided example is not randomly chosen: as a matter of fact, the major gender gap in academia on average is within economics departments. In 2017, The Economist pointed out that the profession’s problem with women in economics departments could be a problem with economics itself. The rise of feminist economics is part of this story which combined underrepresentation of women economists within the discipline and a specific critique to the nature of the discipline. Given that gender relations have affected the economy as a whole, feminist economics should not be intended simply as “economics for women;” rather it should be intended as a better economic theory tout court.
This is the main reason why we need feminist economics in addition to standard economics: the latter is simply concerned with how gender differences lead to different economic outcomes, the former is a broader approach and it is focused on the nature of gender differences that shape gender inequality. And when inequality is a result of discrimination, stereotypes and social pressure, it affects individuals’ freedom too.
Becchio, G. 2020. A History of Feminist and Gender Economics. London, New York: Routledge.
Becker G. 1973. “A Theory of Marriage: Part I.” Journal of Political Economy. Vol. 81 (4): 813–846.
Becker G. 1974. “A Theory of Marriage.” T. Schultz (Ed.) Economics of the Family: Marriage, Children, and Human Capital. Chicago: The University of Chicago Press, pp. 299-351.
Becker G. 1981. A Treatise on the Family. Enlarged Edition. Cambridge, MA: Harvard University Press.
Bergmann, B. 1981. "The Economic Risks of being a Housewife." The American Economic Review. 71 (2): 81–86.
Boserup E. 1970. Woman’s Role in Economic Development. London: George Allen & Unwin.
Folbre N. 1986. “Cleaning House: New Perspectives on Households and Economic Development.” Journal of Development Economics. Vol. 22 (1): 5-40.
Jacobsen, J. 2018. “Women and the Labor Market.” In Averett S., Argys L., Hoffman S. (Eds.) 2018. The Oxford Handbook of Women and the Economy. New York: Oxford University Press, pp: 623-641.
Nelson, J. 1994. “I, Thou, and Them: Capabilities, Altruism, and Norms in the Economics of Marriage.” American Economics Review. 84 (2): 126–31.
 Social scientists and historians used to define this particular division of labor between men and women "the doctrine of the separate spheres," i.e., men perform better than women in the public sphere (such as in politics and in the economy) as men are more competitive than women. Women perform better than men in the private sphere (such as in the household and in the family) as women are more cooperative than men.
Giandomenica Becchio (Ph.D. University of Florence) is Professor of history of economic thought, methodology of economics, and theory of entrepreneurship at the University of Torino (ESOMAS Department), Italy. Her research field includes history of political economy, Austrian economics, feminist economics, women economists’ contributions to economic thought. Supported by research fellowships, she has been visiting scholar/professor at Duke University; Yeshiva University (NYC); Hitotsubashi University (Tokyo); VSE University (Prague); Universidade Federal do Rio de Janeiro; Gender Institute at LSE; the New School for Social Research; UTS (Sydney); Wirtschaftsuniversität Wien (Vienna). She is currently the National Secretary of AISPE (Italian Association for the History of Economic Thought) and member of the Institute for Political Studies’ International Advisory Board and the Estoril Political Forum’s Board of Convenors. Her major publications include several articles published in major academic journals and two books respectively on the philosophical origin of neoliberalism as developed within the history of economic thought, and on the history of feminist and gender economics (Routledge, 2017; Routledge 2020). As visiting scholar at the New School and Liberty Fund (joint position) during the Fall 2022, she is currently working on her book about marriage theory within classical liberalism and the history of economic thought (expected in 2024, Palgrave).
Mikayla Novak is Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics, at the Mercatus Center at George Mason University. Mikayla has written two books, and over twenty peer-review academic journal articles including in Constitutional Political Economy, Review of Austrian Economics, Journal of Institutional Economics, and Cosmos + Taxis. She received a Ph.D. in Economics at RMIT University, Melbourne, Australia. Her research interests include Austrian and evolutionary economics, public choice, entangled political economy, economic sociology, public finance, and regulatory economics.
Arnold Kling earned a Ph.D in economics from the Massachusetts Institute of Technology. His published books include Crisis of Abundance: Rethinking How We Pay for Health Care, Specialization and Trade, and The Three Languages of Politics. He contributes essays frequently to the Library of Economics and Liberty and writes daily at arnoldkling.substack.com.
Jayme Lemke is a senior fellow in the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics and a senior research fellow and associate director of academic and student programs at the Mercatus Center at George Mason University. Her specialization is in public choice economics, constitutional political economy, and the political economy of women’s rights. Her research on these and other topics has appeared in outlets such as the Journal of Institutional Economics, Public Choice, the Review of Austrian Economics, and Studies in Emergent Order. In 2015 she wrote an article on “An Austrian Approach to Class Structure” in New Thinking in Austrian Political Economy. Advances in Austrian Economics.
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