Thursday, October 25, 2012

Kind of a funny argument for gender equality

A FB friend share this post at The Economist, which notes:

"If female employment rates matched those of men, GDP would increase by 5% in America and 9% in Japan by 2020, according to a report by Booz & Company, a consultancy."

True. But presumably you could also say that increasing male employment - thus widening the the gender gap - would increase GDP as well. I don't think people would take that as a very good argument for deliberately widening the gender gap.

I'm not saying this to be dismissive of the goal. I do think the disparities are real (see my post earlier on Horwitz's video), and that there are things to be done about it. I just thought this was a funny way of putting the argument.


  1. If men make more for equal work than women do, would an increase in male employment actually be a less efficient way of raising GDP than The Economist's proposal, since presumably their wages would represent more of a drain on resources? :)

  2. GDP would rise and welfare would fall. If women determine that working isn't worth it, and they begin working (and employers hadn't been willing to universally fail to max profit), then they are worse off.

    Whether or women "should" go to work depends on what is causing the disparity. The reason for the disparity, whatever it is, will get you your answer as to whether or not it is something that should (or even can) be "fixed" or not. GDP is irrelevant.

    To me, this sounds like someone hired Booz & Company and they decided to produce numbers that feel somehow related to economics to make the client happy. Even if the numbers are crap.

    1. And I don't know what the report said, I should add.

      If it went into detail on the source of these disparities and why and how they could be eliminated, and then listed the GDP gains associated with it, that would be an interesting and relevant point to add.

      But it's kind of a weird argument for eliminating disparities.

  3. Not to mention the inherent problems with GDP. GDP doesn't mention home production, for instance. Since it's been largely the female side that has provided care in the household, switching them to the workplace would only superficially appear to be improving welfare. This isn't an argument that women should stay at home and work, since the same could easily go for men. (Which is largely happening. The spouse who makes the least amount of money has a tendency to watch after kids, take care of the house, etc., if one of them needs to, and men have had to take on this role more and more as the gender gap disappears.)

    So, what would happen if we just shifted it around and put more women in the workplace? Less home production and any sort of production outside of GDP that women would be contributing to. Like Ryan says above, it could decrease welfare. That's assuming, of course, we have an optimal position and people are deciding that it would be utility maximizing for some to stay home and others to work. There very well could be inefficiencies there. This argument could go towards men as well. Since men have been absolving themselves from the workplace more and more since the 50's, I'm sure it would be easy to argue: "Why not convince men to stop leaving the workforce, so we can have male participation rates like the first half of the 20th century?" Men are leaving for a reason. For instance, men may not need to work and provide as much, since the workload can now be split between both spouses more easily. So perhaps they're trying to maximize utility between the two?

    Long story short, I'm tired of people trying to use GDP as the end all be all measurement of happiness. We could probably do a lot of ridiculous things to raise GDP and a lot of them wouldn't make us any happier. Obviously, the article didn't mention any of this, so it's nothing against the article, but I imagine this is what many people would have inferred from it.


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