The impact of Austerity on Gender in Tertiary Education: A Theoretical Analysis

Authors: Zeynep M. Nettekoven¹ and Izaskun Zuazu²

Review: Prof. Dr. Camille Logeay

This is an essay of the writing workshop Gender and the Economy - Perspectives of Feminist Economics, published on 11 July 2017.

Introduction

The global economic crisis of 2008 and the political response in the form of austerity policies in several European countries have led to a growing debate on the future of gender equality. The impact of the crisis largely differed across European countries and consequently, political responses to the financial crisis have also differed among them. The effects were particularly severe in Southern Europe. However, since European Union policies increasingly limit policy space at a national level (Klatzer and Schlager, 2014), an austerity rationale has been in place to some extent in fiscal and monetary policies implemented in all EU member states in the post-2008 era.

The initial effects of the financial crisis’ outbreak can be seen in the increased unemployment in male-dominated sectors, such as manufacturing and construction, leading to the economic slowdown being dubbed the ‘he-cession’. At some point, the resulting austerity policies imposed planned contractions in the public sector, mainly in the form of wage reductions and hiring freezes; a fiscal consolidation that was translated into cutbacks in education, health care, public services; and a package of neoliberal reforms that favour deregulated and flexible labour markets. The multidimensional effects of austerity policies on women and gender equality have become more pronounced, as female unemployment has increased, particularly due to the female-dominated nature of the public sector.³ Moreover, the decrease in the real value of minimum wages in many European countries mostly affected women as they were more likely to work low-wage jobs. Additionally, cutbacks to welfare benefits resulted in increased unpaid household reproductive work, increasing the double burden for women. These effects pinpointed the ‘sh(e)-austerity’ phenomenon in several European countries, where outwardly women bear the brunt of the austerity choices (Périvier, 2016).

It is worth noting that austerity effects can be seen in an interaction between gender and educational levels. As Rubery (2015) points out, recession and austerity have promoted a wage and income convergence among lower skilled individuals of both genders, whereas in the case of a higher educated workforce she finds otherwise. However, rather than solely being caused by the catch up of female wages, this convergence is attributed to three factors. Firstly, there were cuts in extra components of pay checks (such as bonuses) that mainly affected male workers. Second, the already apparent gender segregation in the labour market furthered this, as male-dominated sectors were at first more affected by the crisis than female sectors. Thirdly, government programs took action targeting the gender pay gap (Bettio and Verashchagina, 2014).

Three main features of current European labour markets demonstrate profound changes in traditional gender roles in recent decades (Rubery, 2015). These are, namely, the dominant presence of women in higher education in European countries (with the exception of Greece), the reduction in the gender employment gap, and finally, a shift from the male breadwinner family structure towards highly diverse patterns of union and family formation.

Female higher education can be perceived as a milestone in the evolution of gender relations. It consequently motivates our research on the gender impact of austerity policies on education. Our interest in women’s participation in higher education is compelled by the potential levelling up effect of education in the labour market. Also, education has been proclaimed as a major source of social mobility (Evans, 2015).

Notwithstanding the reduction of the gender employment gap (due to the downward levelling effect of the crisis and austerity policies), the mere existence of gender gaps, and more evidently the gender pay gap demonstrate that labour market prospects for women not only differ from those of men but are in fact worse. Consequently, it can be considered that returns on educational investments hinge upon a gender bias. In this essay, we assume that the economic pay-off of educational investment is different for women than for men.

This essay draws on several analyses on the gender impact of the recession and of austerity policies, in which authors acknowledge a threat to women’s labour market integration and a potential backlash to traditional gender labour structures. We contribute to that literature by asking whether recession and austerity convey a gender effect on educational attainment. We also draw a prospective sketch on how to test the hypotheses from this query.
Our aim in this essay is to portray the likely effects of austerity measures on gender equality with a focus on women’s participation in tertiary education and to hypothesize the implications of these scenarios for labour market effects, to be tested in future empirical research.

Does austerity have a gender impact on tertiary education? Have the determinants of women’s educational investment changed as a consequence of austerity policies? Does austerity’s long-term effects on education interact with gender equality in the labour market? What does a resulting change in gender equality in the labour market imply for the institutional design of labour markets? We elaborate on these questions on a theoretical level in this essay. In what follows we offer some avenues that may guide future research on discerning whether we should expect gender disparities in the effect of austerity on educational investments. We combine some features of the human capital theory with analytical strides from the institutional and feminist economics literature. We believe that these theoretical perspectives outperform single-minded mainstream approaches and enrich our understanding of austerity policies’ effects on women’s participation in higher education and consequently, on gender equality and on the institutional outcomes of the labour market.

Scenarios of women’s participation in tertiary education

Recession and austerity may have a significant effect on women’s decisions regarding tertiary education or their chances therein in Europe, where the female participation rate in higher education is often higher than the male rate. In most European countries, public education spending has dropped since the crisis began, but in some of them, the reduction was drastic. According to 2014 data, the reduction in the United Kingdom (England only) and Ireland was by 35 per cent each, in Spain by 15 per cent, in Hungary by 46 per cent and in Greece by 54 per cent. Even so, the numbers of students in these countries, except in Hungary, went up (Grove, 2014). Nonetheless, the effects of recession and austerity on female participation in tertiary education in the long-term may be hard to predict. Multiple scenarios are likely. These scenarios are described below:

Positive effect scenario:

We assume that a positive effect of recession and austerity on women’s entry into tertiary education may occur in two ways. First, if male employment in the labour market decreases as a result of recession at a significantly higher rate than women’s, uncertainty for women in the household may increase, which may, in turn, motivate more women to enter tertiary education to improve their job prospects (Rubery, 2014). Yet, this effect is only likely if the recession is persistent and women have a long-term perspective of their job market prospects, such as suggested by human capital theory (see Acemoglu, 1999).

A second way this may occur is due to contractions in the public sector, where educated women constitute the majority of employees. Lower employment opportunities in the “feminised” public sector would increase competition in the job market for women, which may then motivate women to enter tertiary education in order to increase their employment chances in the public sector, private sector or in male-dominated occupations. In other words, more competition in the labour market may motivate women to attain a better education.

Negative effect scenario:

A negative scenario can be presumed through two channels as well. The first one is that public education spending cuts or privatisation in tertiary education would make education more costly for both men and women. At the same time, women’s employment prospects in higher-paid occupations relative to men may not improve (see human capital theory in Acemoglu, 1999). With regards to the segmentation hypothesis - which assumes that female labour in the secondary and more flexible segment of the job market (Bettio and Verashchagina, 2014) - women’s employment prospects in high-paid positions relative to men’s may indeed diminish as a result of the recession. This hardship for educated women might be a cause for reverting the dominant female participation trend in tertiary education. The empirical findings of Casario et al. (2011) support this human capital interpretation, suggesting that the presence of a high percentage of women in managerial positions and of self-employed women has a significantly positive effect on young women’s tertiary education decisions.

A second possible way is through the added worker effect (Bettio & Verashchagina, 2014; Périvier, 2016), where the exit of the male breadwinner from the labour market would force women in the household to enter the job market earlier than wished. This may then cause some women to drop out of tertiary education and enter the labour market to provide for the family.

Neutral effect scenario:

Female participation in higher education may not be altered significantly by the recession and austerity if women’s participation in tertiary education and the double breadwinner family model prevail as social norms. An example of this is the unchanged higher number of female students in higher education in the UK in the post-2008 era (see Rubery, 2014).

Positive, negative and neutral effects may occur for different income groups in the society, whereby at the aggregate level the real impact on women may not be clearly visible. For instance, a positive effect or neutral effect is expected to occur for higher income groups, while a negative effect is more likely for lower income groups since the outcome of a cost-benefit analysis of investing in tertiary education matters for this group the most. In other words, for lower income groups an economic cost higher than the expected benefit of investing in women’s tertiary education is likely to outweigh the established social norms.

What do these scenarios imply for gender equality and labour market institutions? A change in women’s participation in tertiary education would affect the way they are integrated into the labour market and correspondingly, their economic independence and (coupled with austerity in welfare benefits) their unpaid reproductive work burden in the household.

In the case of the positive effect scenario, educated women would expect their position to improve in comparison to educated men in the labour market, particularly in high-paid occupations. On the other hand, the negative effect scenario would pose a threat to gender equality in the labour market and in the family.

We subscribe to the idea that changes in women’s integration into the labour market and consequently their position in the household would have second-round and profound effects on labour market design. Our hypotheses about these effects for future research are described below.

First and second-round effects: an analytical framework for future research

The analytical framework for first and second-round effects on the labour market which we elaborate here rely on some key concepts proposed in feminist and institutional change literature. With regard to institutional change, some strands of political economy literature perceive institutions as highly static, only to be altered by occasional exogenous shocks, while some others argue about a continuous institutional change, for instance, gradual convergence of political economy models towards liberal market economy models (see for this literature Thelen, 2009; Streeck & Thelen, 2005, ch. 1). Contrary to these views we endorse the idea that institutional change is discontinuous, incremental and usually endogenous, rather than exogenously determined (Streeck & Thelen, 2005, ch. 1), and that certain institutional changes may unleash further effects (see figure 1). In this sense, we assume a two-way interaction between institutional change and gender relations (see Rubery, 2014). The main implications of this approach for our essay are the following: As a first-round effect, austerity measures –as institutional changes-, affect gender relations via contractions in the “feminised" economic sectors (such as the public sector), increasing female labour in precarious jobs and via women’s educational investment which may also be affected by recession as discussed above. As second-round effects, these changes in gender relations may impact the overall labour market institutional design (see for examples of related labour market flexibilisation, Rubery, 2014).

Figure 1: First-and second round effects (Source: authors)

Among the scenarios of women’s decisions regarding tertiary education described above, the negative case scenario is likely to result in significant damage to progress in gender equality in Europe. Therefore, we are especially interested in its interpretation, as a lower benchmark for the effects of austerity on gender equality. Alongside the contraction of educated female employment due to austerity in the public sector, the supply of female labour in the precarious sector may increase because educated women lose their full-time jobs and enter the precarious sector in addition to the and/or because of the added worker effect. The latter factor was estimated to be especially strong for some Southern European countries (Spain, Greece, Italy) (Périvier, 2016).

The austerity measures in tertiary education may reduce women’s participation in higher education, possibly leading to the inclusion of more women in the precarious sector of the economy. Indeed, female part-time employment as a share of total female employment increased in many European countries, yet in Southern European countries which were heavily affected by the crisis and austerity measures, involuntary female part-time employment as a share of total female part-time employment increased much more dramatically than in countries that were affected by the crisis to a lesser extent (Eurostat, 2017).⁴ This can be partly attributed to the decline in employment in feminised sectors in the aftermath of the crisis and to austerity measures leading to a shift of educated women to precarious jobs. Assuming this shift implies hampered career opportunities for educated women, this may lead to a permanent deterioration of gender equality in the labour market. We subscribe to the idea that this change in the female employment structure may then affect certain institutional structures in the labour market as a second-round effect.

The analytical tools for institutional change articulated by Streeck and Thelen (2005, ch. 1) together with the two-way approach and gender relation considerations in Rubery (2014) are, in our view, fruitful approaches to the study of the gender impact of recession and austerity on education.

Looking to the future, female tertiary education participation could be hampered by the recession and by austerity and correspondingly, female labour supply in the precarious sector could continue to increase relative to female employment in non-precarious sectors and relative to their male counterparts in Europe. We believe this may encourage a labour market institutional redesign at the expense of both female and male labour. In the long-term, these redesigned institutions of the labour market may impose new gender relations in productive as well as reproductive social spheres. In our future research, we aim to empirically investigate this two-way interaction between gender and institutional change in certain European countries by benefiting from these analytical tools.

Conclusion

Several scholars have recently argued that austerity might result in a backlash in gender equality and gender egalitarian ideologies (Bettio and Verashchagina, 2014; Rubery, 2014; Lombardo, 2017; Périvier, 2016 among others). In the same vein, in this essay, we have asked whether austerity would result in a roll back in women’s educational attainment. We have speculated about negative, positive and neutral scenarios that would surely have further repercussions on gender equality. We assume a gender disparity of the educational investment’s economic pay-off due to the gender employment gap, the gender pay gap and unequal gender distribution of unpaid household, care and reproductive work. Current austerity policies might enlarge these disparities, and thus threaten the progress towards gender equality.

Austerity policies have both direct and indirect effects on education. Straightforward effects should be expected in both female and male enrollment rates due to the rising fees of tertiary education as a result of austerity measures undertaken in some EU countries. Further neoliberal measures chosen by European countries have been at the expense of public services, which could also result in a reduction in tertiary education enrollment, regardless of gender. Rising tertiary education fees, along with cutbacks in public sector employment –dominated by educated females-, however, could imply a stronger deterrent to engaging in such an investment for females. Indeed, the aforementioned body of findings gives evidence of a gender impact on austerity policies and goes on to demonstrate that women are bearing the brunt of austerity policies.

We offered three plausible scenarios for the future of women’s tertiary education. We further introduced suitable theoretical insights about both short and long-term effects. In the aftermath of austerity policies, it became somewhat clear that some former labour economics theories such as the theory of a reserve army or the buffer hypotheses are not fruitful. Other theories were supported, including segmentation and occupational/sectoral segregation hypotheses (Rubery, 2015; Bettio and Verashchagina, 2014). New gender discrepancies might arise as a consequence of austerity policy choices and their interactions with labour market institutions and gender relations: It was our goal to identify those, starting with education, a goal that was previously a milestone for changes in the traditional gender roles.

References

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