STOREP is pleased to announce that the 2025 STOREP grant for innovative small-scale research projects is awarded to
Anna Vergnano (Università di Bari)
“Mind the Gap: Public Spending, Autonomous Demand, and Gender Inequality in Employment and Wages”
Keywords: Demand-led growth models, gender gaps, female labor force participation, post-keynesian economics, public spending.
Project outline
The persistence of gender inequalities in labor markets—particularly in terms of labor force participation and wage outcomes—has been exacerbated by the Covid-19 pandemic and remains a pressing concern for policymakers and scholars alike. While many studies have focused on individual characteristics (such as education or fertility) to explain gender gaps, fewer have explored the macroeconomic and structural factors that shape these inequalities. This project aims to address these gaps by analyzing the role of public spending and autonomous demand in influencing gendered labor market outcomes. Specifically, we examine how public spending and autonomous demand affect: (1) women’s labor force participation, (2) the gender wage gap, and (3) the female share of total labor income.
We conceptualize autonomous demand—including public expenditure, consumption, and investment—as a structural driver of employment and income dynamics, and we posit, following post-Keynesian theory, that it can shape labor market gender gaps through several channels. When autonomous demand expansions are accompanied by an expansion of the public care sector, they generate employment in female-intensive sectors (e.g., health, education, care services), creating better job opportunities for women, and facilitate access to essential services like childcare and eldercare, thereby reducing unpaid care burdens and enabling greater female labor market participation. Lastly, autonomous demand stimulates overall demand and economic activity, leading to positive spillovers for employment and wage growth that benefit women and men, albeit with potentially different intensity.
This project has two main objectives. First, we assess the effect of autonomous demand and public spending on female labor force participation. We hypothesize that an expansion in autonomous demand increases female participation by generating new employment opportunities and reducing constraints related to unpaid care work. Second, we evaluate the impact of these variables on gendered wage outcomes. Here we distinguish between two measures: the traditional gender wage gap (i.e., the difference in average real hourly wages between men and women) and the female share of labor income (i.e., women’s share of the total labor compensation paid in the economy). The latter captures both wage levels and working time, thus offering a broader perspective on gender inequality.
Methodologically, the project relies on a Structural Vector Autoregressive (SVAR) approach to identify shocks to public spending, combined with Local Projections to estimate their dynamic effects on gendered outcomes. By using this combination of techniques, we aim to identify causal relationships and to distinguish between short- and medium-term effects.
Our contribution is twofold: empirically, we provide robust evidence on the macroeconomic determinants of gender inequality; conceptually, we reconnect feminist economics with structural macroeconomic approaches, emphasizing how gender outcomes are shaped not only by micro-level constraints but also by broader demand-side dynamics.
Mario Cedrini