In his book ‘Global Inequality: A new approach for the age of globalization’, Branko Milanovic (2016) analyses trends in inequality within and between countries and how these trends relate to inequality at the global level. Building on an impressive database (and, might I add: a publicly available one), he discusses the theoretical implications of his findings that cover multiple centuries, reformulating Kuznet’s Curve to Kuznet’s Waves. It’s an important book, and rightfully received very positive reviews.
The book, however, leaves the topic of gendered inequality largely unaddressed. Indeed, Milanovic discusses why an exclusive focus on horizontal inequality (inequality between groups, including gendered inequality) is undesirable, because it may lead to unproductive identity politics in relation to specific horizontal inequalities, and because it does not address the root cause of inequality. Yet, while relevant, these arguments do not convince that a greater emphasis on gendered inequalities would not have been informative regarding the measurement and explanations of global inequality. Below, I list three reasons why including a focus on gender can improve our understanding of trends in global inequality.
First, the analyses presented in ‘Global Inequality’ seem to implicitly assume that all income is shared equally within the household. Indeed, incomes are equivalised to account for differences in household size and composition, but then it is assumed that there is no inequality within households in the degree to which women and men have equal access to, and control over, how to spend the household income. Admittedly, there is not so much empirical research that does account for such differences (Cantillon, 2013), but a literature on this topics seems to be emerging and indicating that women typically have less access to, and control over, household income (Bennett, 2013). Not accounting for this likely leads to understating levels of global inequality among individuals.
Secondly, the level of economic inequality between women and men is intrinsically linked to levels of inequality among households (Lam, 1997). Milanovic discussed how homogamy drives up inequality among households. This is true indeed, but the resulting correlation between partners’ earnings is typically quite low. In a recently published study, Nieuwenhuis Need, and Van der Kolk (2017), focusing on OECD countries from 1973 to 2013, showed how women’s rising earnings were indeed associated with a somewhat higher correlation between spouses’ incomes. But the same trend was also associated with a substantial decrease in inequality among women (living in coupled houseohlds). So, while inequality in household income increased due to the rising correlation between spouses’ income, it was reduced more by the decline of inequality in women’s incomes. Thus, the net effect has been that women’s rising incomes were a driving force reducing inequality among households – at least in rich democracies in recent decades.
Thirdly, levels of gender (in)equality vary substantially across countries and over time – even when just limiting our focus to economic inequality. Trends towards gender equality have been observed to stagnate in various countries (including the Nordic countries, where women’s employment rates have been comparatively high for a long period already) or even reverse like in the United States (Boushey, 2008). If inequality is rising in these countries, as shown by Milanovic, this could be related to stagnating gender inequality. At the same time, in other countries there is much more potential for further reducing household inequality by means of promoting gender equality. Furthermore, women’s (rising) incomes have contributed substantially to countries’ average income levels. On the one hand this means that countries in which trends towards gender equality are stagnating may see less growth in average income levels. On the other hand, it means that countries with high levels of gender inequality (in terms of economic participation) have the opportunity to foster growth in average incomes by stimulating women’s (equal) participation on the labour market. To the extent that these countries are poorer, such as China and India, promoting economic gender equality will thus also help these countries to catch up with the average income levels in richer countries – thus reducing global inequality.
Whether and to what extent trends in gender equality will affect future trends in global inequality remains an empirical question. But, together these arguments demonstrate that gender (in)equality is a driving force of inequality both within nations and between nations. Now, these points of critique are easily reaised, but very difficult to empirically substantiate (or refute). I don’t think Milanovic has the data to do so, and neither do I have them. In fact, I don’t think such data exists for a substantially long period of time. Yet, I think these comments are important to keep in mind when interpreting the evidence on long-term trends in global inequality, and when thinking about questions that beg answering in future research.
References
Bennett, F. (2013). Researching Within-Household Distribution: Overview, Developments, Debates, and Methodological Challenges. Journal of Marriage and Family, 75(3), 582–597. http://doi.org/10.1111/jomf.12020
Boushey, H. (2008). “Opting out?” The effect of children on women's employment in the United States. Feminist Economics, 14(1), 1–36. http://doi.org/10.1080/13545700701716672
Cantillon, S. (2013). Measuring differences in living standards within households. Journal of Marriage and Family, 75, 598 – 610. (online)
Lam D (1997) Demographic variables and income inequality. In: Rosenzweig M and Stark O (eds) Handbook of Population and Family Economics. Amsterdam; New York: Elsevier, pp.1015–1059.
Milanovic, B. (2016). Global inequality: A new approach for the age of globalization. Harvard University Press. (Publisher’s website)
Nieuwenhuis, R., van der Kolk, H., & Need, A. (2017). Women's earnings and household inequality in OECD countries, 1973–2013. Acta Sociologica, 60(1), 3–20. http://doi.org/10.1177/0001699316654528
