Building an inclusive economy

Updated: Aug 19, 2019



Iceland’s prime minister Katrín Jakobsdóttir discusses what gender means for rethinking the economy

AS GOVERNMENTS ARE slowly turning their focus from raw GDP-driven measurements toward well-being criteria when judging economic success, the demand for progressive social justice policies is increasing.

This is why many policymakers are examining how Iceland, which enjoys a relatively strong economy, has made gender equality a core part of its domestic and foreign policies.

The campaign for women’s equality in Iceland has demanded government action to liberate women from social structures that have kept them down for centuries. This includes legislative changes for women’s sexual and reproductive freedoms as well as robust equality laws and gender quotas for corporate boards.

But it has also required policies that are, in conventional economic terms, considered extremely expensive. And the price tag still prevents many governments from adopting them. The key topics here are universal childcare and shared parental leave. If applied properly, these policies have the potential to change the makeup — and the rules of the game — of both the public and the private spheres. Why?

Because they enable women to participate in the labor market and public decision-making, while making space for men to share domestic responsibilities. Yet these family-friendly policies have not won the global support they deserve and are seen by many as a vast opening to profligate public spending.

Fifty years have elapsed since Robert Kennedy rightly said that GDP measures everything except that which makes life worthwhile. Economics is nonetheless still centered on the measurable, dividing government outlays into two categories: expenses and investment.

This dualism classifies money spent on physical infrastructure as an investment and, therefore, worthy of public monies. On he other hand, social infrastructure is branded as expenses or operating costs, preferably the first in line to be cut.

Yet these are the structures that sustain us from (before) birth to death and create the conditions that make life worthwhile. Interestingly, physical infrastructure—roads, tunnels, buildings—is often the platform for men’s employment, while women are much more likely to be employed in services associated with social infrastructure—education, childcare, health care.

By focusing on physical infrastructure to the exclusion of social infrastructure, economists and policymakers ignore an obvious truth: we need both in order for our societies to thrive and develop.

What is a school building worth without quality education for all? What is a hospital building without the people providing the health care? And what is the value of a road or a tunnel in a society where illiteracy prevents social mobility?


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