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THE EFFECTS OF GENDER BIAS ON NEOCLASSICAL

ECONOMIC THEORY AND ANALYSIS


ABSTRACT
This paper examines the patriarchal roots of Neoclassical thought and the role of unpaid labor in
the economy. Evaluating the effects of androcentric bias in economic theory and evaluation, this
paper critiques the economic notion that each individual holds masculine traits. The findings
suggest that economists generate fallible analyses by overlooking productive unpaid labor, which
is typically done by women, and non-market variables, such as Micro-Enterprises and household
production. By considering non-market variables and expanding the traits of an actor to include
that of Homo Reciprocans, economists can produce analyses that are more accurate.

KEYWORDS
Neoclassical economics, social reproduction, unpaid labor, gender economics
JEL Codes: B130, B220, J30

INTRODUCTION
Neoclassical economics is defined by its reliance on rational choice theory (Barker et al.
2004), and was largely established by white, male economists who were greatly influenced by
Victorian ideology. The biased and discriminatory roots of neoclassical economics have led to
inefficient and fallible analyses that overlook both the intersectionality of economic actors and

the non-market variables that influence the economy. Furthermore, these biased roots create a
disproportionate burden of labor for women and adds to the barriers women must overcome to
escape this burden. Contemporary application of Neoclassical theory and analysis, then, leads to
inequitable, incomplete and counterproductive policy making. Victorian ideology defined
women by their domestic capacities and ability to bear children. This domestic role, which
included social reproduction, was considered unproductive, and categorized as leisure time.
Leisure time includes time and production not exchanged for wages through the market,
including recreational activities, activities that produce goods and services not traded, and
activities that are a combination of the previous two types, such as childcare.
Because womens unpaid work is labeled as leisure time, it rendered invisible, as it exists
outside the sphere of the market (Waring 1988). This causes its productive value to be
overlooked. This view, based on the heteronormative family wage system, or ideology of
domesticity, in which the male was the patriarchal authority and breadwinner, led the economists
to view household labor as womens work. Today, due to the influence of androcentric roots,
contemporary economic analysis still excludes womens work (Nelson 1996: 32-33, 60-62).
John Stuart Mill, a British philosopher, political theorist, and economist, observed these
androcentric roots and Victorian ideology. In his essay, The Subjection of Women, written in
1869, Mill noted the oppression of women and the devaluation of their productive contributions.
All women, he observed, are brought up from the very earliest years in the belief that their
ideal of character is very opposite to that of men; not self-will, and government by self-control,
but submission, and yielding to the control of others. [I]t is their nature to live for others.
(Schneir 1972:168). This biased view of women and the belief that it was their nature to live for
others caused the influential neoclassical economists to label certain laborious activities as

womens work. These activities were viewed as natural duties rather than productive work.
Soon after Mills Subjection of Women was published, Alfred Marshall published
Principles of Economics in 1890. In Book IV of Principles, Marshall supported the Victorian
notion that women had an innate place in the home rather than the work place. Citing the human
capital theory, he claimed that by taking on the role of caregivers, women would forgo market
labor, yielding marginal benefits that would outweigh marginal costs. Marshall argued that this
would enhance the environment in which male workers and their children live, adding to their
character and ability. It would be womens duty to support their husbands and children, and to
devote their time to investing in the human capital of their husbands, the male labor force, and
their children, the future labor force and caregivers (Pujol 1992). Marshall theorized that
womens participation in the labor force, conversely, would be detrimental as it tempts them to
neglect their duty of building a true home and investing their efforts in the personal capital of
their childrens character and abilities (Pujol 1992:126). Though his view embraces the biased,
Victorian opinion of the time, it also acknowledges the productive and essential economic role of
so-called womens work. He unknowingly demonstrated the productive and fruitful
consequences of non-market activity or unpaid labor; thus, countering the unproductive view of
womens work and upholding the indirect ability of non-market activity or leisure time to
contribute to economic growth.
Women must consider the opportunity cost (Investopedia.com 2013) of foregoing unpaid
housework in order to procure paid market work. Vandana Shiva posits that poverty is subjective
in definition and is culturally conceived. According to Shiva,
Culturally perceived poverty is not necessarily real material poverty: subsistence
economies that satisfy basic needs through self-provisioning are not poor in the sense of

deprivation. Yet the ideology of development declares them to be so because they neither
participate overwhelmingly in the market economy nor consume commodities produced
for and distributed through the market, even though they might be satisfying those basic
needs through self-provisioning mechanisms. Subsistence, as culturally perceived
poverty, does not necessarily imply a low material quality of life. On the contrary,
millets, for example, are nutritionally superior to processed foods, houses built with local
materials rather than concrete are better adapted to the local climate and ecology, natural
fibres are generally preferable to synthetic ones and often more affordable.
Development, as a culturally biased process destroys wholesome and sustainable
lifestyles and instead creates real material poverty, or misery, by denying the means of
survival through the diversion of resources to resource-intensive commodity production.
(Mies et al 1993:72).
For some, the opportunity cost of turning toward market work can mean deprivation poverty
due to the costs of goods and services, such as foodstuffs and paid household help. Doing a costbenefit analysis, these women may find that subsistence agriculture and household work, such as
childcare, are the better alternative to market work in order to provide for their family. Choosing
subsistence poverty over deprivation poverty would be viewed as irrational by neoclassical
economists, but is a real dilemma in many developing countries.
Furthermore, many urban employment opportunities, seen as productive work, are
environmentally degrading. Switching from subsistence farming to market labor will require the
purchase of foodstuffs from industrialized farms, which can be contaminated with carcinogens;
thus, environmental and health costs can be incurred by turning to the market (Living, 2010).
Conversely, industrialized farms create social costs, or negative externalities, through the use of

chemical fertilizers and pesticides. Only about 5% to 10% of all cancers are inherited through
genes. Sporadic mutations cause most cases of cancer; environmental factors generally are
associated with these mutations (American Cancer Society, 2013). This affects both those that
purchase these contaminated crops and those that live near these industrialized farms that incur
diseases and other health issues from the pollution.

THE HOUSEHOLD AS AN ECONOMIC UNIT


The term economy comes from the Greek word oikonomos. Oikos means house
andnemein means to manage; thus, oikonomos means to manage the house or household
(thefreedictionary.com). Consider the circular-flow model. The household, which includes
consumers and laborers, contributes and receives from the resource and product markets. It is
imperative, then, to incorporate the household in economic analysis. Turning toward household
production rather than market production can lead to various positive externalities, and such as
risk and cost reductions. For instance, subsistence agriculture can lead to reduction of
transaction costs and resource pooling. Positive production and consumption externalities can
also increase a persons utility. Utility is an economic term that refers to an individuals overall
satisfaction. Utility is expressed as U=(C, L), where L represents leisure and C represents
consumption (Jacobsen 1998:70-73). For example, Sustainable agricultural practices yield net
investments in the environment and can lead to improved immune systems. Sustainable
agricultural practices avoid use of harmful chemical fertilizers and pesticides. These practices
also avoid techniques that lead to waterlogging, salinization, and desertification.
A weakened immune system, in contrast, makes one more susceptible to disease, which can then
be passed on to others in the community. An unhealthy farmer is less productive.

Another benefit of non-market household production is the reduction of transaction costs


as a result of reducing of contracting costs. It is generally easier and less expensive to find people
within the household to engage in an activity than outside of the household. One reason for this
is reciprocity. In many developing countries, individuals have numerous children to help with
farming and household tasks. By turning to market work, however, the children are no longer
unpaid labor but become a financial burden. The cost savings of their free labor will likely
exceed their earned income (Jacobsen 1998).
In a nuclear family, there is a husband and a wife. A cost-benefit analysis will be done
when deciding household and market divisions of labor. This is determined rationally by
considering the budget constraint, and utility. The opportunity cost of one hour of leisure time
equates the wage rate (Jacobsen 1998).
The emotional cost of time spent away from family is also weighted and considered in
the opportunity cost. The emotional factors are not considered by neoclassical economics, as it is
not a trait or desire of Homo Economicus. For instance, some migrant workers must choose
between deprivation poverty and raising their families; many men and women, for instance, seek
employment away from their children in order to earn money that will be sent back in the form
of remittances. One may also be influenced or pressured by cultural factors or social norms, not
considered by neoclassical economics, creating a choice between self- definition and social
definition. These equations and emotional sentiment illustrate the necessity of household
production in economic analyses as it is both productive and affects market activities.
Men earn more per hour than women, and married men typically earn more than single
men as they have wives at home to act as support staff, allowing the husband to specialize in
market work and increasing his efficiency (Jacobsen 1998:77). By having the husband specialize

in market labor and the wife specialize in household labor, more market and nonmarket output
will be produced, a comparative advantage of the nuclear family; thus, non- market labor can
increase productivity, and therefore should be considered productive. There is, additionally,
societal discrimination of occupational choice, which decreases the benefit of women entering
the market place. Because of lack of equity, women and men can be equally productive yet men
receive higher wages than women; thus, women may be receiving a lower rate of return on
human capital investments, such as education, than men. Because of this, women may be more
likely to invest in human capital that has high non-market return, an irrational choice according
to neoclassical analysis, as individuals opt to undertake unproductive and unpaid labor.
Occupational segregation is economically wasteful as it excludes women from a majority of
occupations, wasting human resources and reducing the ability of economies to adjust to changes
(Jacobsen 1998).

THE INSUFFICIENCY OF QUANTITATIVE ANALYSIS


Quantitative analysis can be deceiving. Many economic indicators, such as Gross
Domestic Product, are used to calculate welfare; however, these calculations can be skewed and
include certain costs as benefits. For one, non-market production should be included in this
calculation. If women specialize in non-market production while their husbands specialize in
market production, their welfare can be greater than if both work in the market place.
Additionally, certain externalities of market production can reduce welfare, such as pollution.
Third, GDP accounts neither for distribution nor for sustainability of production (Nelson 1996).
Because it does not illustrate the disproportionality of distribution, the periphery can be
inaccurately portrayed, thus yielding inefficient or counterproductive policies.

The informal sector can account for up to 42% of GDP in Africa (Barker et al 2004:118119), and is therefore essential for economic growth and development in many regions. This
sector includes the production and consumption of goods and services not facilitated through the
market place. Micro-Enterprises are small, informal firms that employ less than 10 employees.
These firms do not have to adhere to government-mandated regulations or pay taxes, and are
established with minimal funds, typically contributed as gifts by family members, rather than
through loans.

HOMO ECONOMICUS AND HOMO RECIPROCANS


Homo Economicus is masculine by nature, productive, self-interested, rational, and an
agent of the market. This concept originated from works by John Stuart Mill. The alternative
model is Homo Reciprocans. This is humanistic, and feminine economic actor. The idea of
Homo Reciprocans offers another end to the spectrum of characteristics of economic actors. She
has a low rationality stimulus (Gutierrez 1998:847) and reacts in response to actions. Simply
put, a desire to be kind and voluntarily donate her time and efforts is reciprocated from kind acts,
and hostile responses are in reciprocation of hostility. Productivity in the market place can be
influenced by reciprocity. For example, reciprocity-based extra-effort is reduced in a hostile
work environment (Gutierrez 1998:850), and verbal positive reinforcement by management can
promote increased productivity and output, all without financial incentive. Assuming all agents
of the economy are strictly masculine is a normative view, instigating a fallacy of composition,
or fallible assumption that what is true for the part is true for the whole (Macpherson 2010). One
reason for this assumption is due to the androcentric roots of economics. Because men were seen
as the breadwinners and women were seen as the caregivers, neoclassical economics assumes

that economic agents hold masculine or male traits while those that bare traits of Homo
Reciprocans are at home performing their natural duties. Homo Reciprocans offers a contrasting
set of characteristic to Homo Economicus, allowing a wider range of potential traits. People are
not strictly masculine or feminine, and thus economic actors must be viewed as heterogeneous in
order to improve economic analyses.

CONCLUSION
The economic consequences of patriarchy have led to the application of bourgeois
Victorian values, labeling certain work as womens work; thus, skewing economic analysis,
and leading to the marginalization of women. These neoliberal policies (Barker et al 2004:116)
have lead to the disproportionate burden of unpaid labor, the feminization of poverty,
occupational segregation, and unequal pay and rate of return on human capital investment.
Neoclassical economics overlooks non-market variables as well as the multiple identities or
intersectionality of sex, race, ethnicity, class, sexuality, and nationality of economic actors.
Neoclassical economists also assumed that ones biological sex was equivalent to ones socially
constructed gender; assuming all men resided purely on the masculine end of the gender
spectrum, and women inhabited the feminine end.
By expanding the character traits of these economic actors to include masculine and
feminine traits, and understanding that the complexities of these persons will influence their
decision-making, a more thorough understanding can be achieved. Examining productivity,
moreover, beyond the scope of market-orientation will yield more just and wholesome decisionmaking and policies. The execution of economic growth and development could also be more
accurately studied and promoted with a more holistic view of the economy. It is imperative, then,

that economic analyses incorporate non-market factors, and expand the understanding of
rationality to include various actions of economic agents that are intersectional and which are
influenced by both market and non-market variables. It is also necessary that a gender analysis
be conducted of economic theories, mitigating inequity and inaccurate analyses; breaking this
vicious cycle sustained by androcentric roots and their contemporary application.

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